U.S. troops in Japan getting a boost in COLA
Stars and Stripes March 18, 2008
U.S. troops in Japan will see a cost of living allowance increase in their next paycheck, a small boost to offset the slumping dollar’s value on the local economy.
The higher COLA rates across mainland Japan and Okinawa kicked in Sunday, a day after gas prices at most bases hit an all-time high and the exchange rate at Community Bank was just 98 Japanese yen to the dollar.
For most bases on mainland Japan and for all Okinawa bases, the COLA index climbed four points. A few areas, including Yokohama and Tokyo, saw a six-point jump.
Servicemembers will see the extra money in their March 16-31 paycheck.
With the increase, an E-6 based in Yokosuka with five years of service and two dependents will earn $32.20 a day in COLA or $515.20 for the pay period, a gain of $156 if spread over a month.
Since the first of the year, the COLA index at many locations in Japan has climbed six points in concert with the greenback’s nosedive.
An E-4 on Okinawa with four years of service and two dependents is earning approximately $4 extra per day. Because of the mid-month change, pay for March would be $85 more than January’s pay.
That same E-4 a year ago was bringing home about $230 less a month in COLA.
In South Korea, COLA rates remained unchanged despite the won’s recent dive against the dollar. COLA for South Korea-based servicemembers hasn’t changed since Jan. 16, according to U.S. Forces Korea officials.
The Pentagon’s Per Diem, Travel and Transportation Allowance Committee adjusts COLA up to twice a month based on the local exchange rate. Local prices and buying habits are also factored in to the allowance, which is meant to offset higher living costs overseas.
To calculate COLA the per diem committee uses exchange rates available up until about eight days before a new allowance is to be set.
The yen has only strengthened since that last look, meaning COLA could go even higher next paycheck. On Friday the dollar sank to below 99 yen, the weakest in 12 years, according to a March 14 report by Bloomberg News.
The last time Japan faced a seriously weak dollar was in 1994 and 1995, when the dollar stayed below the 100-yen level for a year and a half, and reached a historic low of 79.75 yen, according to the Wall Street Journal.
To calculate expected COLA payments for this pay period, go to http://perdiem.hqda. pentagon.mil/perdiem/ ocform.html
Erik Slavin contributed to this story.