There was an article in the Sunday New York Times that annoyed me. It was about businesses located close to military bases, sometimes owned by veterans. They like a military clientele since they get regular payments, but they charge them interest rates around 46% (occasionally “more competitive”) since they claim they are a credit risk. Sometimes they can take the money straight out of pay. One base commander counted dozens of nearby businesses he thought took advantage of enlisted folks. And felt they could do nothing since caveat emptor.
The article stressed half the members are under 25 but those of any age may like financial knowledge or discipline, and no one can keep an eye on them all the time. So why not pay them fairly? Enough to raise a small family in modest comfort and without undue stress? Allow them to buy a car when they are working in the middle of nowhere. Why do so few of the many dollars budgeted, and do many of the thank yous and purple prose, go to the ones who do the work? What do you think should be done? Is it like this in every country?
I think you left off some relevant details, here. For the vast majority of businesses near military bases, like the vast majority of businesses anywhere, “interest rates” won’t even be relevant. What exactly are we talking about, here?
The military actually provides housing for people on base in most locations, some bases there are not enough housing of the right type (family housing can be rough, if you’re a single enlisted you almost always can get a spot since they have dormitory style housing.) If you end up having to live off base, pulling up the current calculator for 2022, someone of rank, say E-3, can get $1269/mo here in my zip code. If you have dependents it goes to $1500/mo, that’s a pretty good addendum to your salary.
I find it unlikely an enlisted person would be unable to afford a basic car given the economics. Also they should be going through a credit union or a company like USAA for the auto loan, they will treat them right.
When a young man is away from his parents, probably for the first time, and he has a steady paycheck, preventing him from buying a flashy sports car is darn near impossible.
At one time, the age of majority was 21. Today it is 18. That may have been a mistake.
The article was about lenders or businesses that sell big ticket items requiring loans. No doubt there are restaurants and bars and whatnot that cater to the military, and perhaps service folks spend too much there, but this is not the subject of the article. I lived and worked near a big Canadian base for years. Though an issue here, a bigger one is lack of affordable military housing. There used to be a problem with mouldy and substandard housing too, but I think this has improved some.
It is not as if soldiers are the only ones just away from home and full of beans. Plenty of students buy fast food and beer and many go into debt. Interest rates are still single digit, usually. When I was a first time uni student, I was in a city and did not own or need a car. My friends sometimes had cars, but even those from very wealthy families drove old beaters. (This no longer seems to be the case, at least as much.)
The term “basic economics” can hide injustice. Sure, I know students who spent very heavily on booze - a few students out of many. Sure, service folks want a nice car and need to be realistic. Why can’t the military itself use their clout and offer some basic or moderate options? It is not wrong to own a car or want to, especially if you live in a spot where it is needed. How does it help to have people doing difficult work perpetually stressed?
That’s kinda what I was wondering too. There’s an Air Force base close to my store (there used to be two, but one closed a while back). We get them stopping in for lunch, but that’s about it. They all have cash/credit cards. I don’t know of any businesses that extend credit to people in the military.
I’m still searching to understand what you are advocating for, do you want the military to bar its young soldiers from buying shit they don’t need? Or are you saying the military should find some way to bar businesses from selling them shit they don’t need?
If you are eligible to vote, you are presumed to be old enough that you don’t need a baby-sitter. That may be an inaccurate assumption, but it is one that our culture has embraced rather strongly.
A young, single GI with no dependents, can afford a car, if he or she can make a decent down payment. But a male, unmarried, under the age of 25 pays the highest insurance rates, and the insurance payments can cost as much as the car payments. The unmarried GI can fork over almost the whole paycheck for the car and expenses, because he has housing and meals taken care of.
A young, married GI, especially the lower pay grades, do not qualify for quarters. Yes, they get BAQ (Basic Allowance for Quarters), but that’s not going to cover rent and utilities. The young married almost requires a car, even though there won’t be much left in the budget after paying rent, utilities, food, and other necessities.
Did you know many military families qualify for food stamps?
Spouses can work, but it’s hard to maintain a career when you move every 18-36 months.
But because it is so hard, and there is the potential of asking a great deal, why should even lower pay grades not be paid enough to buy simple things? I am not saying the military is fully responsible for people’s economic choices, but aware of this problem, further problems with recruitment, it seems to me they could offer more value through their own exchanges.
That said, it may be the article is inaccurate or emphasizes the problems of a small percentage. The thing about places in the middle of nowhere, though, is they might offer airport type prices. That isn’t great.
The problem might be insurance prices. The military can’t come up with a group plan that subsidizes things? Really? I want the guy driving the expensive tank to have had a decent nights sleep.
The government subsidizes life insurance. I sincerely doubt Congress will permit Uncle Sam to underwrite car insurance.
Every so often, there is a big blowup about GIs needing food stamps, and Congress opens the purse strings to up the pay and allowances. Invariably, though, the bitching and moaning starts about retirees “double dipping” by working civil service jobs after retirement, and then retiring 20+ years later and collecting the CS retirement. The bitchers and moaners complain about these double dipping retirees shopping at the Commissary and the Exchange.
When my husband first enlisted in the Army, he was told that he could retire after 20 years’ service at 50% of his base pay, and he could keep all his benefits such as medical and shopping at the Commissary and the Exchange. He put up with the gawdawful hours, the crappy pay, and the hardships, because he wanted that retirement at 20 years. It is understood THAT was part of his compensation.
Well, Congress got a wild hair and wanted to save money. Bases were closed, services were consolidated, and for many, there was no longer a nearby Commissary. With hospitals and clinics gone as part of the closures, retirees were told to use CHAMPUS for medical care.
Don’t get me started on CHAMPUS.
I agree with you, pay is low. Retention is terrible because of it. And for those who stick it out for a career to get that retirement, they have to fight tooth and nail for the benefits they were promised.
USAA is a private insurance company founded by retired military officers, and originally accepted only other retired officers as members. Such restricted membership allowed the company to offer lower rates and greater coverage than other insurance companies.
Over the years, the membership has expanded, and now is open to active and retired of all pay grades, as well as those who have served and obtained an honorable discharge.
The federal government has nothing to do with USAA.
Okay, so fight my ignorance. One presumes soldiers drive vehicles owned by the army. Let’s say jeeps or small trucks instead of tanks or transports. They gotta have their own insurance? I have no idea about US programs but helping out with auto insurance hardly seems like an impossible thing to do, to me. Make it valid up to a reasonable value for the car they should be driving. (We recommend you buy a car for under $X in which case you can use our insurance…)
Even the lowest ranks in the military make more than enough money to afford a monthly auto insurance premium unless they have something like SR-22 insurance (which you basically only get if you’ve had a DUI/DWI.)
Not everyone in the military is driving military vehicles, trucks, jeeps or otherwise around all the time. Some do, some don’t. You don’t need personal insurance when operating a military vehicle because you are not personally liable for anything that happens while performing a job in the military using military equipment.
You actually don’t even need a civilian driver’s license to operate a military vehicle. You can be issued a military driver’s license but are generally restricted to where you can drive in the United States on that license if you don’t have a valid State license.
I’ve never been in the military, but I think they’re only driving army vehicles (jeeps, trucks, etc) when necessary to their duties. When they’re on their own, presumably they have to drive their own vehicles.