TABLE 1-4.-ANNUAL COST OF THE ALL-VOLUNTEER FORCE, BY CATEGORY, FISCAL YEARS 1972-74 [Total obligational authority in millions of dollars]

1 The fiscal 1972 costs are not for a full year because the pay increases were not effective until November 1971.

Sources: 1972, Department of Defense, Office of the Assistant Secretary of Defense, Manpower and Reserve Affairs (March 1973); 1973-74, "The All-Volunteer Force and the End of the Draft," Special Report of Secretary of Defense Elliot L. Richardson (March 1973; processed), p. 27.

From the standpoint of military pay alone, the cost of the allvolunteer force represents only a small proportion of the increase over the past five years. Average military pay will have increased by about 113 percent during the period from fiscal 1968 to fiscal 1974. As Table 1-5 shows, the portion of the increase relating to the volunteer service accounts for only 18 percent of the total, not much larger than the growth that can be attributed to a higher average grade structure. The larger proportion assigned to comparability pay legislation preceded the decision to adopt the volunteer concept.

TABLE 1-5.-COMPONENTS OF MILITARY PAY INCREASE, FISCAL YEARS 1968-74 1

1 Average active military pay will increase 113 percent from fiscal 1968 to fiscal 1974. The portion of that increase that is attributed to the volunteer service is the November 1971 pay raise, as adjusted by the annual increases since that date. The component of the total average increase associated with comparability is proportional to the pay increases provided Federal civilian employees during this period. Average pay increases in the private sector were used to distinguish between achievement and maintenance of comparability. The remainder of the average increase that not accounted for by pay raises—is attributed to grade creep. Military pay, as shown, does not include cash allowances for quarters and subsistence 2 Figures are rounded and do not add to totals.

Source: Based on data provided by the Department of Defense, Office of the Assistant Secretary of Defense, Comptroller (March 1973).

Moreover, it could be argued that the incentive increases charged to the volunteer service, since they were directed principally toward the disproportionately lower paid enlisted grades, should have been provided in any event. What is clear from these data, however, is that the large growth in the manpower-related component of the defense budget should not be attributed to the implementation of the allvolunteer concept.

Conclusions

In summary, the data presented in this chapter for the years 1960-74 point to the conclusion that on the whole the shift to an allvolunteer armed force has been successful.

Draft inductions declined from over 200,000 in fiscal 1970 to zero in mid-fiscal 1973, due principally to two factors: a sharp decrease in active military manpower needs and a growth in male enlistments, most notably in true volunteers.

The quality of volunteers, as measured by standardized tests, has on balance improved over the period. As measured by educational attainment, however, modest declines in proportions of Army and Navy highschool graduates were experienced in fiscal 1973, principally because of large accession needs.

Taken together, these achievements suggest that this nation can accomplish what no other nation has ever attempted to maintain an active armed force of over two million men and women on a voluntary basis. Before examining the implication of this transitional experience on longer term prospects, the next chapter discusses several problems which, according to the administration, need immediate attention and resolution.

CHAPTER TWO

REMAINING TRANSITION PROBLEMS: SHORT-TERM

SOLUTIONS

Despite the progress outlined in the previous chapter in the conversion to an all-volunteer armed force, the administration remains concerned about the potential manpower scarcity in three areas: critical skills; reserve forces; and the medical, dental, and allied health professions. Each type of manpower shortage-and how the administration proposes to resolve it is discussed below.

Critical Skill Shortages-The "Quality" Issue

Despite indications that there will be an adequate supply of volunteers for short-term manpower needs, the Department of Defense has anticipated difficulties in attracting and retaining men for certain "critical skills." Though these skills are not precisely defined, they are jobs that are hazardous or otherwise unattractive (for example, those in ground combat arms or involving sea duty), or that demand higher entry standards (for example, those requiring an aptitude for electronics). In both instances, current levels of compensation may not be sufficient to attract enough volunteers with the desired qualifications. The ground combat arms problem surfaced early in the transition period (see Figure 4). Recognizing that the infantry, armor, and artillery lack appeal, in 1972 the administration requested, and the Congress authorized, the payment of enlistment bonuses of up to $3,000 to individuals enlisting for a three-year period in the combat elements of the armed forces.

The Department of Defense tested the bonus concept by offering, starting June 1, 1972, $1,500 for four-year enlistments in the Army and Marine Corps combat elements. These bonuses were used not only to attract additional volunteers to the combat arms, but also to encourage extended terms of enlistment. Measuring the success of this initial attempt is difficult because several other influences were simultaneously at work. Recruiting and advertising campaigns had been expanded and accelerated and the full impact of the large military pay increases enacted in November 1971 was being felt. Enlistees were being given a wider range of options (for example, choice of job, unit of assignment, or both). Finally, the U.S. combat role in Vietnam was rapidly diminishing. How much each of these affected recruitment is unclear and the precise effect of the bonus program is therefore difficult to measure.1

1 This situation underscores one of the principal problems associated with the transition to an all-volunteer force: the absence of a central, integrated, experimental design and data collection program. Assessing future options in moving toward an all-volunteer force in the most efficient way was thus much more difficult.

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Nevertheless, in April 1973, the administration approved the payment of a bonus to volunteers qualifying for selected technical skills (for example, tank turret mechanic) that were considered combatrelated. At the same time, the bonus payments were increased from $1,500 to $2,500 for four-year enlistments and offered only to high school graduates scoring in AFQT category III or higher. This decision marked the first application of enlistment bonuses to the quality issue, thus presaging the intent of the proposed Uniformed Services Pay Act of 1973, which seeks $65 million in the fiscal 1974 defense budget for bonuses to obtain and retain qualified officers and enlisted personnel. Proposals to attract more men of ability by using financial incentives raise an issue that could be fundamental to the ultimate success or failure of the volunteer concept: How much quality do the services "require"?

The military services array jobs by occupational categories, prescribe desired performance levels, and specify minimum standards to satisfy their needs. For career positions-journeymen and supervisory experience and job performance evaluations are valuable criteria in selecting appropriate personnel. For new recruits, however, many of the better predictors are not measurable; thus, standardized test scores, educational level, and job aptitude are used. Each military service employs these indicators in a different way; in general, educational level and standardized mental tests are used for the initial selection of recruits, while aptitude tests-tailored to individual service needs are given for training and assignment purposes.

Because of the difficulty of relating current test standards to performance and thence to specific military jobs, it is difficult to define such needs with any precision. Rather, goals specified by the services tend to be based (a) on a desired trend toward overall quality improvement as forces become smaller and more technically sophisticated and (b) on estimates of the numbers the services feel they can recruit without draft pressure at present incentive levels ("what the market will bear").

Requirements in terms of educational attainment levels are even more difficult to define. What is the "right" proportion of high school graduates? Though not formal policy, the Army prefers that no less than 70 percent of its total accessions be high school graduates, although in fiscal 1973 only 49 percent of its total enlisted career force have completed high school. While educational level is believed to relate directly to disciplinary problems, as shown in the preceding chapter, its relation to the performance of specific jobs is not clear. Adherence to these uncertain standards, however, could result in a failure to meet quantitative requirements, thus creating pressures to increase financial incentives. At the same time, the services could be systematically excluding capable and available candidates, even though the search for those with higher levels of education and the ability to score higher on military aptitude tests may be an expensive one. Prompt attention should be given to the cost and capability implications of changes in quality standards. Until these effects are measurable, the use of bonuses could be buying more "quality" than is necessary.

In addition to enlistment bonuses, the proposed 1973 Uniformed Services Special Pay Act also contains provisions for selective reenlistment. The proposals offer bonuses to military personnel with particular