Why the disparity in COLA? A look at the numbers
Stars and Stripes August 23, 2009
Troops talk about COLAStripes queried troops at duty stations around the world to find out what they think of their COLA payments. While some said they were satisfied with what they receive, others say they could always use the extra cash.
“I go out in town a lot, go out to dinner, clubs, you name it. It can be expensive. Seems I have to constantly withdraw money from the ATM. You only have one life, so why not live it? I want to live in the now. There are some people who save $500 a month. Let’s say I’m the guy who puts $100 into savings.”— Petty Officer 2nd Class Eddie Harrison at Naples, Italy
“We’re able to do better because we’re overseas,” he said. “You can save, if you’re smart about it.”— Petty Officer 1st Class William Cronin at Naples, Italy
“We make it work, but it’s a little tough. (An extra $200 per check) “to be able to be comfortable and not struggling” would be nice.— Senior Airman Matthew Varga, Kadena Air Base, Okinawa
“It’s great that the Navy does give you money to offset the balance between cost of living and things like that. But as far as going to Tokyo and things like that, the yen rate right now is crazy, and you go out in town and things are way overpriced. You almost have to trade off. If I’m going to go here, then next week I’m not going to do anything.”— Petty Officer 2nd Class Barry Riley, from Naval Air Facility Atsugi near Tokyo
“I think everybody always wants more. I believe it’s sufficient enough. It all depends on what you do. For a person who has a family of three, depending on what you do, traveling in Japan may take its toll depending on tolls and getting your family around or waiting on trains. For someone like me it’s not too bad. I still get out and travel. It’s all about what you do and it’s all about budgeting.”— Marine Cpl. Shinard Patterson, Yokota Air Base, Japan
“It really doesn’t make much of a difference in the checks. I think personally, it could be more.”— Army Pfc. Jerisha Jones, Camp Hovey, South Korea
For many troops serving overseas, the cost-of-living allowance can be a frustrating thing to understand.
Why would two servicemembers with the same circumstances, living just miles apart on different bases, receive different cost-of-living allowances?
A single E-3 with three years of service who lives in the barracks at Yokota Air Base, just outside Tokyo, received $145.70 in COLA for the Aug. 1-15 pay period. A similar E-3, in the barracks at nearby Yokosuka Naval Base, received $203.98.
The disparity, according to ofﬁcials with the Per Diem, Travel and Transportation Allowance Committee, can be traced to the answers other servicemembers gave on the most recent COLA survey.
The military surveys troops with families every three years on how they spend their money on and off post. The prices of those goods and services are collected annually in the locations where troops say they shop. Identical surveys are conducted in the States, and price lists are compared. If the overseas location is more expensive than the U.S. average, troops in that location get COLA.
The COLA rate can change every payday if the exchange rate ﬂuctuated by a minimum of 5 percent during the previous pay period.
The surveys measure the cost of 120 different goods and services, which are weighted for importance. For example, nearly everyone buys gas, making it higher on the list than diapers. The DOD works with the Bureau of Labor Statistics to determine how to weight the data.
If the prices are rising in the States while staying stagnant overseas, COLA will drop.
If a hamburger costs $18 in Tokyo but its price in the U.S. rises from $6 to $10, then troops in Tokyo are closer to equal buying power with their stateside peers, so they’ll receive less COLA. If the hamburger jumps to $22 in Tokyo, Tokyo COLA will increase.
The allowance is paid to about 250,000 overseas troops at 600 locations at a current cost of about $1.8 billion a year.
Boost coming for singlesThe percentage of COLA single troops who reside in the barracks receive is on its way up beginning Oct. 1, according to Defense Department ofﬁcials.
Troops who live in the barracks currently receive 47 percent of the rate that single troops who live in town receive.
That will jump to 53 percent on Oct. 1; to 58 percent on Oct. 1, 2010; and to the end goal of 63 percent on Oct. 1, 2011.
A Defense Department ofﬁcial who spoke to Stars and Stripes about the COLA increase said ofﬁcials realized that the 47 percent rate wasn’t enough.
Troops living in the dorms receive only a percentage of the COLA rate because their “buying behavior is different,” according to the ofﬁcial. They’re given furniture and can eat at the chow hall, for example.