Civilian workers in Europe see drop of 17 percent or more in post allowance
November 11, 2008
STUTTGART, Germany — Post allowances given to U.S. civilian workers in Europe dipped across the continent once again on Sunday, with the declines hovering in the 30 percent range for most of the United Kingdom and Germany. The drops were less drastic in Italy and Belgium, where the allowance dropped about 17 percent.
The plunge continues a downward trend linked to recent gains by the dollar against major European currencies.
Since August, post allowance has dropped by about 60 percent in Germany. During the same time, the dollar has gained 14 percent against the euro.
A worker earning $42,000 a year with three dependents would have received $597 in post allowance in his mid-August paycheck. At the end of November, that same person will receive just $249, according to data from the U.S State Department’s Office of Allowances.
"It has an impact. There’s no doubt about that," said Armin Kandigiam, a civilian worker at the Hilltop Hotel in Stuttgart’s Robinson Barracks.
Kandigiam, who is married to a Department of Defense Dependents Schools-Europe teacher, said the short-term impact is particularly felt when the family paychecks come in. But over the long haul, a stronger dollar is good news, he said.
"It just seems like it (post allowance) declines faster than the dollar fluctuates," Kandigiam said.
The trends are similar for workers in Italy, where post allowance dropped nearly 17 percent in the past two weeks in both Naples and Vicenza.
Since August, workers there earning $42,000 with a family of four have seen the allowance drop $249 per pay period.
This week’s post allowance changes are based on currency exchange rate information reported to the Office of Allowances.
The latest drop affected workers across the board, from Belgium and the Netherlands to Luxembourg and France, according to the State Department’s biweekly update.
Similar reductions have been taking place with cost-of-living allowances allocated to troops. Indeed, COLA has dropped by more than one-third since July.
COLA and post allowances are pay supplements meant to offset the higher cost of living at some overseas locations and they generally decline when the dollar strengthens.
Since the summer, the U.S. dollar has been making gains. In July, the dollar was at an all-time low of roughly $1.60 against the euro.
During early trading Monday, the dollar stood at $1.28 against the euro.