U.S. civilians in Europe feel pinch as dollar drops
May 17, 2006
While U.S. troops living in Germany and Italy got a cost-of-living allowance increase in their latest paycheck, U.S. civilians working in Europe are still feeling the pinch of the declining dollar.
Earlier this month, the Department of Defense announced that U.S. servicemembers would see a 16 percent increase in the COLA after the dollar fell to .7815 euro. But, despite the dollar hitting .7577 euro on Tuesday, U.S. civilians working for the government have yet to see an increase in their cost-of-living allowance, which is known as post allowance. The euro rate now is just cents away from the lowest it’s been in five years.
Some civilians say the declining dollar is hard to swallow.
“[The post allowance rate] is too little,” said Spencer Blackshear, a Child and Youth Services sports director in Bamberg, Germany. “I do most of my shopping off post, and I have to go on post to convert currency. It’s not evening out anymore.”
Two civilian employees asked for comment at Aviano Air Base, Italy, each said they had noticed their post allowance hadn’t been keeping pace with the euro-dollar rate.
“You feel it,” said Doug Rogg, who works for a Navy detachment at Aviano. “But I think in the long run, it kind of balances out. They’ll make up for it.”
Carol Rushing, a kindergarten teacher at Aviano Elementary, said she’s noticed a difference when shopping off base. “The more you shop on the economy, the more you feel it,” she said.
Post allowance for civilians is set by the U.S. State Department, where, according to the agency’s Web site, “an index is developed by comparing the cost of goods and services and living pattern information reported by the overseas posts to the cost of goods and services and living patterns in Washington, D.C.”
A look at the State Department Web site shows that post allowance rates in Germany, Italy and the U.K. have not changed since Feb. 19, which is the last date available on the Web site. During that time, the dollar has fallen from .8216 euro, a more than 8 percent drop.
“The exchange rate is part of [calculating allowance rates], but it is not the whole thing,” said Michelle Murray, an allowances and differential specialist in the State Department’s Office of Allowances.
Murray said she could not explain why some rates have changed recently and others have not, saying only that the State Department calculates adjustments based on the exchange rate every two weeks, and the amount of those adjustments differs from post to post.
Both the State Department and the Department of Defense use a survey system to determine overall cost-of-living and post allowances, and although Murray said they share information, the systems are separate.
“The last time I thought [the post allowance rate] was even was when we had the Deutsch Mark,” Blackshear said.
Civilians living in the United Kingdom may be those most in need of a post allowance increase. Since mid-February, the British pound has jumped to $1.94 from $1.74, a 11.5 percent jump.
But Chanelle Johnson, who has worked at the Airmen and Family Readiness Center for the past four years, said she thinks her post allowance, when considered with the generous housing allowance and other benefits, is adequate, despite its fluctuations.
“We’re more than fairly compensated in the overseas [jobs],” Johnson said.
She didn’t feel slighted that military COLA has risen lately, “because they’re under a different system.”
Another employee in the Readiness Center, Daisy Jones, had a different view.
“It’s pretty low for civilians,” Jones said of the U.K. rate. Jones said she thought it should be keeping up with the strength of the pound and was irked that it hasn’t kept pace with the rate for servicemembers.
Active-duty military members also have access to benefits civilian employees don’t, such as free medical treatment and on-base housing.
“It bothers me that the military is going up and not the civilians’ [rate],” she said.