Petty Officer 2nd Class Floyd Bussey has seen his paycheck shrink in the seven months he’s been at Misawa Air Base, Japan.

“The reason why I came overseas, I thought I was going to get paid more,” he said. “I was making more in San Diego.”

Bussey can blame some of his financial pain on COLA.

The cost-of-living allowance rates for servicemembers in Japan are some of the lowest in recent years.

Precipitating the most recent COLA drop is the dollar’s climb against the Japanese yen.

Over the past two years the dollar-to-yen exchange rate has fluctuated between a low of 109 and last week’s high of 124, according to Army Lt. Col. Loren Darmofal, U.S. Forces Japan country allowance coordinator.

“That’s close to a peak in the last two years,” Darmofal said.

COLA rates in South Korea also have been fluctuating.

The money is paid to compensate for higher costs of living overseas. The allowance, paid every two weeks, gives servicemembers equal spending power with their stateside counterparts.

“The whole point of COLA is to put everyone on a level playing field,” Darmofal said. As the dollar gains against the yen, COLA diminishes. “The more yen you can buy, the more buying power you’ve got off post when buying things on the economy,” Darmofal said.

Some locations in Japan lost 4 points in June — and a total of 6 to 8 points since January.

So far for July, COLA rates are holding steady. In new COLA indices released Friday for the next pay period, rates across Japan didn’t budge.

As a rule of thumb, for an E-6 with 10 years’ experience and three family members, one point equals about $25 a month.

Servicemembers around Japan say they’re feeling the pinch.

“I used to enjoy going out with my wife for a nice dinner every now and then, but since the rates have dropped, we don’t get to do that as much any more,” said Senior Airman Dexter Roberts of the 374th Communications Squadron at Yokota Air Base.

For Senior Airman Tyler Max, sagging COLA rates are a double-edged sword. He’s been at Misawa since December 2004.

With one family member and 2.5 years of service, he earns an even $11 a day in COLA — about $300 a month. On the high end, he made $18.90 a day or nearly $600 a month.

“This is the lowest it’s ever been,” he said.

As a military pay technician with the 35th Comptroller Squadron, Max also fields questions and concerns about COLA — more so when the rates are low.

He hears more from higher-ranking enlisted personnel and company-grade officers, who tend to see greater COLA fluctuations in their paychecks.

“They ask, ‘Why is my pay going down? Something’s wrong,’” Max said.

Staff Sgt. Michael Harbin said he’s seen his COLA dwindle significantly in almost three years at Misawa.

“That really hurts a lot,” said his wife, Senior Airman Nicole Harbin. “And prices don’t seem to change. Gas goes up, milk goes up.”

COLA especially comes in handy in the winter, when the couple’s utilities allowance doesn’t always cover the high cost to heat their home.

“I fall back on COLA to cover some of those things, which takes away from my purchasing power when it comes to food, things like that,” Michael Harbin said.

Darmofal said he understands that no one likes to see less money in their paycheck, but the system is designed to be fair.

“Changes are based upon data,” he said.

The Per Diem, Travel and Transportation Allowance Committee, which sets allowances for the Department of Defense, reviews the exchange rate daily, adjusting the COLA index based on currency fluctuations up to twice a month, Darmosal said.

“If they didn’t make periodic changes, (servicemembers would) either get underpaid or overpaid, depending on which way the yen went,” he said. “The system is fair.”

Though it’s true members who shop on-post benefit less from a weaker yen, Darmosal said COLA “is not going to fully compensate every servicemember. It’s impossible to do. Some people buy a lot more things off post.”

In South Korea, COLA over the last year has “been up and down because of the won and dollar valuations,” said Maj. Jerome Pionk, an 8th Army spokesman.

Present rates are close to what they were a year ago, he said.

However, surveys on goods and services done this spring indicate prices for products are rising, he said. Whether that affects COLA remains to be seen, he added.

In a December 2006 command message, U.S. Forces Korea commander Gen. B.B. Bell said any adjustment to COLA rates from the spring retail price schedule survey should be announced in June, with an effective date of August 2007.

He noted that USFK will not conduct a shopping pattern survey this year because of the high participation rates and quality of results from the 2004 through 2006 surveys.

Max, the military pay technician at Misawa, said one of the biggest COLA misperceptions is that it’s “compensation for being stuck overseas. They think it’s kind of an award money but really it’s not.”

Transportation to the States isn’t factored into COLA, even though personnel at more remote bases have to pay more to get home.

“People in the States don’t get any extra money for going on vacation,” Darmosal said.

Allison Batdorff and Bryce Dubee contributed to this story.

Surveys help in calculating the cost-of-living allowance

The Per Diem, Travel and Transportation Allowance Committee uses a computer-driven algorithm to ensure servicemembers aren’t getting underpaid or overpaid as the exchange rate fluctuates.

The system compares the rate offered at military banks to a rate set for the allowance, accumulating the differences between the two. When the difference reaches 5 percent, the per diem committee makes a change to the COLA rate, according to Army Lt. Col. Loren Darmofal, U.S. Forces Japan country allowance coordinator.

Over- or underpayments should be corrected within an eight-week period, officials have said.

Other variables that go into calculating COLA are surveys establishing local consumer prices and buying patterns of servicemembers at each base.

The Pentagon tracks prices for goods overseas annually through a retail price schedule survey. In the spring, U.S. military installations in Japan measure prices for 120 goods and services on-base and off-base.

Volunteers from base go out into the community and check prices on items as well as services such as laundry, haircuts and car care. The price of gasoline also is included. The numbers are submitted to U.S. Forces Japan and then turned into the per diem committee, which compares them with U.S. prices and sets the COLA index.

An online Living Pattern Survey conducted every three years analyzes what percentage of personnel shop off base, where they shop, and the products they buy, according to Darmofal.

“It asks servicemembers questions such as ‘Where do you buy meat? If you buy off post, where do you buy?’” he said.

Results from the shopping survey determine which stores base officials use to track prices for the retail price survey. Officials say it’s hard to skew the results. Even if someone fibs and says they do all their shopping off base in hopes of getting more COLA, it’s the spending behavior of the majority that’s most important, said one base finance official.

The next Living Pattern Survey for Japan is set for 2008.

Participation in the survey is generally high, Darmofal said, especially during periods when COLA is low.

For the 2005 survey, for example, Yokota Air Base had 1,500 responses and more than 3,000 responses came from Okinawa. Officials at Misawa say about 70 percent of personnel filled out the survey two years ago.

Spending habits typically don’t change as frequently as retail prices, Darmofal said, explaining why the survey is every three years. A base, however, can ask USFJ to conduct an out-of-cycle Living Pattern Survey if, for instance, there’s a large influx of servicemembers to the base or the town outside the gate grows significantly.

For Sasebo, an E-6 with 10 years service and three dependents earns $28.71 a day in COLA or $861.30 for a 30-day month at the current COLA index. That same E-6 at Yokota Air Base — about 28 miles from Tokyo but supported with a large commissary, base exchange and ample on-base housing — would take home $16.15 a day in COLA or $484.50 during that same period.

Being rural, however, doesn’t guarantee a higher allowance. Maj. Ronald E. Gaines, Marine Corps Air Station Iwakuni station inspector, said because Iwakuni is a relatively small city with limited shopping options, many families incur extra expenses traveling to Hiroshima or other surrounding cities to meet their shopping needs.

But most families there live on base and tend to purchase American products, he said. Those shopping habits could be one reason why Iwakuni currently has one of the lowest COLA indexes in Japan, just two points higher than Misawa and Yokota.

COLA rates vary even among bases on the Kanto Plain, a fact that some servicemembers don’t quite get. “I think the difference in COLA rates between the bases here is a little unfair,” said Staff Sgt. Celeste Spears of the 374th Medical Group at Yokota Air Base. “Why should ours be any different from the other nearby bases?”

Darmofal said the per diem committee looks at overall data for each installation and plugs it into unbiased formula. “The one statement the per diem committee always makes is they let the data do the talking,” he said.

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