Does military service still pay?

By Marilyn Lewis

Would you risk your life for a steady paycheck and a better future? That's a question facing many 2007 high-school graduates who are considering military service.

Their grandparents endured the draft and the likelihood of a tour in World War II, Korea or Vietnam. Their parents weighed careers in an all-volunteer military; the Cold War still loomed large, but prolonged combat was rare. The payoff was training and benefits that lifted generations of families into the middle class.

Today, the toll in Iraq makes daily headlines, yet the want ads aren't exactly friendly, either: Even when the jobs are secure, the safety net of health insurance and retirement plans is not. Certainly, for some portion of the 1.4 million Americans currently on active duty, service is an economic decision as much as a patriotic one.

So the question persists: Does military service still pay?

On purely economic terms, the experts say yes. A high-school grad with few prospects and no way to pay for college can find unmatched benefits, marketable skills and bonuses for enlisting and then re-enlisting, even as much as $38,000 for later schooling.

"Military personnel in general make more than their civilian counterparts, except for the most senior of the senior," says Beth Asch, a military manpower expert at Rand.

"Now you could say, on the one hand, (civilians are) not getting sent off to Iraq to get shot at. But on the other hand they're not getting high-tech training which, once they leave, they can use in a civilian job."

Obviously, military life isn't for everyone. Your chances of success using today's military as an economic springboard depend on three things:

• What you want: Are you looking for a career? A way to pay for school? Skills can use as a civilian?
• What you bring to the table: How willing are you to risk your life? Do you have any particular skill the military needs?
• The deal you cut when signing up.

Back in the day

A tour of duty sure paid off in Grandpa's time. In World War II, 16 million Americans -- about 12% of the population -- put on a uniform. Around half those recruits used the GI Bill to get a college education, and when they got out of school, they swelled the American middle class.

"It's an incredible story," says Joe Davis, spokesman for the Veterans of Foreign Wars. "They became the scholars and the scientists and the captains of industry."

For Vince Patton, who joined the Coast Guard in 1972, the service was the only clear path from inner-city Detroit to a middle-class life. He was one of 11 children in an African-American family of modest means and, like two brothers before him, he joined up mainly for the GI Bill. "I couldn't afford college," he recalls. "My grades weren't that great to get a scholarship. But I thought there would be a guaranteed job when I got out."

As it happened, he stayed in. When he retired at the young age of 47 in 2002, he held the Coast Guard's highest enlisted rank, earning $94,000 a year in pay and benefits. While in uniform, he earned a bachelor's degree (in social work), a master's (in counseling) and a doctorate (in education) -- all paid for by Uncle Sam. Now, he's got a $62,000 yearly pension and about $250,000 in retirement savings plus his job as director of community outreach for Military.com, an online news and community site for service people.

So, what's in it for you?

Since the military went volunteer in 1973, things have changed. The armed services are no longer a refuge of last resort for poor kids; most recruits are from middle-class families, and about 45% of military personnel have spent some time in college, says John T. Warner, an economist at Clemson University and expert on the economics of defense. Recruiters try to demand at least a high-school diploma and an entrance-exam score in the top 50%, though wartime waivers mean some recruits now are getting in with less. African Americans no longer bear a disproportionate burden in defending the country. In fact, the Department of Defense surveys find that more African American parents than others, skeptical of the war on terror, are steering their children away from the service.

• Video: Military retirement plans

It's possible that you and Uncle Sam could strike a deal that works for you -- if you haven't got the money for college, if you've got no major crimes under your belt and if you don't expect to make CEO pay for a military career. Here are the five ways you can make money in the service.

Enlistment bonuses

Where military service can actually get lucrative is at enrollment time. The more trouble recruiters have making their quotas, the better your chances of squeezing big bucks out of Uncle Sam. These days, Army enlistment bonuses are running as high as $40,000. Re-up and you could be looking at an additional $60,000 bonus. You might even be able to get the service to pay off your student loans.

But you can't take the money and run. You've got to stick it out or pay it back, and at least 15% of new recruits bail, says Warner.

Notice, too, that not everybody is getting these big, fat bonuses. You have to sign up for what some -- not all -- consider the worst jobs. The tougher the job is to fill, the bigger the carrot your recruiter can dangle. Often, these jobs involve dangerous work in a war zone. You might be asked if you'd like to be an ordnance explosive technician, for instance.

Think long and hard about this one. "Our men and women in Iraq are primarily dying because of IEDs -- improvised explosive devices -- you know, roadside bombs," says Derek Stewart, director for military issues at the U.S. Government Accountability Office. It's the ordnance explosive technicians who find IEDs and defuse them. The Army's short on people willing to do this job, and only two-thirds of the spots are filled, he says.

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