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Annual Pay Adjustment

Annual pay raises are linked to the increase in private sector wages. Beginning with the January 1, 2000, pay raise, annual pay raises through 2006 were to be one-half percent above private-sector average increases. This is an important change. Since passage of a 1990 law, the military annual pay raise has been capped at one-half percent below private-sector growth unless specifically granted a larger increase by Congress. The FY2000 National Defense Authorization Act directed that pay raises for 2000 through 2006 will automatically be one-half percent above the private-sector wage increases. Pay raises may exceed these automatic levels if authorized and funded by Congress.

In January 2003, officers and enlisted members received a minimum of 4.1% pay raise. Some grades with certain years of service received a higher increase--up to 6.5%. The average increase was 4.7%.

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