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Blackwater Mercs Make More than Petraeus

blackwater-logoWalter Pincus argues that, in addition to being unaccountable, private military contractors are much more expensive than professional soldiers:

According to data provided to the House panel, the average per-day pay to personnel Blackwater hired was $600. According to the schedule of rates, supplies and services attached to the contract, Blackwater charged Regency $1,075 a day for senior managers, $945 a day for middle managers and $815 a day for operators.

[...]

An unmarried sergeant given Iraq pay and relief from U.S. taxes makes about $83 to $85 a day, given time in service. A married sergeant with children makes about double that, $170 a day.

Army Gen. David H. Petraeus, the top U.S. commander in Baghdad overseeing more than 160,000 U.S. troops, makes roughly $180,000 a year, or about $493 a day. That comes out to less than half the fee charged by Blackwater for its senior manager of a 34-man security team.

Now, that’s a pretty steep contrast! Your average Blackwater merc is making more than the commanding general. Ezra Klein calls this “astonishing,” which I suppose it is when looked at in that context. While it’s amusing to compare the average daily cost, though, it’s a rather silly way of weighing the economics.

Contractors are naturally more expensive in the short term than their government counterparts if all one weighs is their salaries. When I was doing management consulting at DISA, my company was hiring me out at a rate that exceeded my GS-15 boss’ pay. Unlike my civil service counterparts, though, the government had no long term obligation to me; the second they no longer needed my services, I was on my own. [UPDATE: I hasten to add, per commenter Scott_T, I wasn't personally drawing a larger salary than my boss. My company billed the government that amount because they had to pay my salary, cover my benefits, cover legitimate administrative overhead (including the cost of putting together annual proposals to get contracts renewed), and generate a profit.]

An American soldier has to be trained at taxpayer expense; the mercs bring their own training. (Mostly, it was also procured by the taxpayer, since Blackwater and company recruit mostly former military. But that’s a sunk cost.) Soldiers are paid whether they’re at war or not; the mercs get cut loose as soon as their contract expires. Soldiers get paid if they get sick or hurt on the job; Blackwater has to provide a sub. After putting in their time, soldiers get a pension; mercs get whatever they’ve negotiated from their companies.

Even on a pure salary basis, soldiers would command a hell of a lot more if the Army only recruited during wartime. (Indeed, as we’ve seen, we have to offer substantially more money to get people to sign up or re-enlist when there is a war going on.) People sign up, though, with the prospect of getting training, adventure, a sense of service, and whatever other benefits they hope to get from their time in the military and accept as part of that the risk of going to war. The mercs, by contrast, don’t have a job unless there’s a war to fight.

Ezra closes,

The Bush administration has discovered that it’s far easier to convince Congress to appropriate more funds than it is to convince the American people, much less the military, to send more troops. So we’re purchasing extra manpower instead. It’s a way of hiding the human cost of the war in the financial cost of the war. It’s a way, in other words, of lying, albeit in a uniquely expensive fashion.

Well . . . not exactly.

We ultimately agree that the benefits of hiring contract security guards are outweighed by the disadvantages, the cost-benefit analysis here is skewed by some rather silly math. Still, while “Clinton did it too!” is by now so shopworn as to be the object of parody, it’s nonetheless true that Bush hardly invented this.

The shift toward contract labor for the military is one that’s been going on as long as I can remember. Jobs that were done by soldiers twenty-five or thirty years ago are increasingly being done by civilians, whether civil servants or private contractors. This began with mundane post support duties like guarding the front gate, mowing the lawn, painting, operating dining facilities, and so forth. When I was in Desert Storm — almost 17 years ago now — all manner of service support functions were carried out by contracted labor, albeit mostly non-Americans.

What has changed, really, is the scope of the enterprise. Because the American footprint is so large and sustained, much more support is needed. Further, we have a large contingent of non-military government personnel that need protection that, for a variety of reasons, we’ve elected to farm out to private contractors rather than divert soldiers.

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About James Joyner
James Joyner is the publisher of Outside the Beltway, an associate professor of security studies at the Marine Corps Command and Staff College, and a nonresident senior fellow at the Atlantic Council. He's a former Army officer and Desert Storm vet. He has a PhD in political science from The University of Alabama. Views expressed here are his own. Follow James on Twitter.

Comments

  1. Scott_T says:

    As being a contract worker previously with the government, I also know that the government was billed alot more than I was getting at the time (I wanted to know why it wasn’t in my paycheck!).

    But what Blackwater charges has to include their equipment (armored trucks, bullets, airfare, benefits) and feeding their people on-site if not at a military base.

    So a Blackwater employee doesn’t make what Gen. Petraus is paid, even if they bill the government a ton to support that employee they put out their.

    Like or Dislike: Thumb up 3 Thumb down 0

  2. Tlaloc says:

    Don’t forget the extra cost of insurance for, you know, employing a bunch of mercenaries over whom you have no oversite or control in a warzone.

    Like or Dislike: Thumb up 4 Thumb down 1

  3. JKB says:

    Well, this is the classic mistake anyone who looks at a services contract cost schedule makes. The contact cost has to cover personal weapons, travel to and from, ammunition, personal injury and death insurance (probably not cheap for a warzone), corporate admin costs as well as recruitment and retention and be enough to entice a contractor to take up the contract. Not to mention the backup employee. Also, mercs probably aren’t big on corporate pension plans and prefer to get their compensation up front rather than delayed in a pension plan given the job may only last a short while and their lifestyle. The article states that some other costs, such as vehicles, meals and lodging, are not included in the schedule personnel charge or is specified to be provided by the contracting organization for the contract in question and so wouldn’t be a factor here.

    For those unfamiliar, such costs as guns and ammunition as well as medical and administrative costs aren’t costed out in a soldier’s pay. Nor are the retirement costs, a 4-star with 30+ years will get $130,000+ for the rest of their life with Cost of Living increase when they retire. Not to mention access to Tricare. Such costs are taken care of separately and must be factored in when doing comparisons. OMB A-76 requires 36% of base pay to be added civilian employee benefits. Military benefits would be more given retired pay starts immediately upon retirement after 20+ years of service and total medical coverage is provided at government expense for active duty.

    Like or Dislike: Thumb up 1 Thumb down 0

  4. Boyd says:

    You also can’t (if you’re honest about it) compare a monthly salary directly to a daily or hourly contract. If Gen Petraeus gets $180,000 per year, they arrive at the $493 per day cost by dividing his salary by 365.

    I’d be willing to bet that the contracting companies aren’t putting an individual to work on the contract 365 days a year. So the days they don’t work, they don’t get paid.

    Although I know that Gen Petraeus isn’t just working five days a week, but just to show some balance, if we divided his annual salary by 260 (5 days a week, 52 weeks in the year), his daily pay goes up to just under $700.

    As usual, someone wants to make a point, so they fudge the numbers to fool people.

    Like or Dislike: Thumb up 6 Thumb down 0

  5. Dave Schuler says:

    The president of GE makes more than the president of the United States, too.

    James, I think that the claim that we need to pay government employees (elected, appointed, or regular civil service) wages that are competitive in some way with those in the private sector is completely specious. The assumption is that all motivations are denominated in dollars.

    That’s sad, if true. Jobs have intrinsic as well as extrinsic rewards and the presumption that the most capable people are uninterested in intrinsic rewards is problematic. Additionally any idea that salaries either in the private or public sector are based on merit is doubtful. Salaries anywhere are what you can commend, not what you deserve.

    Like or Dislike: Thumb up 2 Thumb down 1

  6. Tlaloc says:

    James, I think that the claim that we need to pay government employees (elected, appointed, or regular civil service) wages that are competitive in some way with those in the private sector is completely specious. The assumption is that all motivations are denominated in dollars.

    Not to mention it presumes that the corporate compensations should be left alone…

    Like or Dislike: Thumb up 0 Thumb down 0

  7. Andy says:

    I believe that the highest paid employee of the federal government is actually the head football coach of Army, iirc. His base salary is quite low, in keeping with federal regs, but he’s got lots of booster and contract money.

    Like or Dislike: Thumb up 1 Thumb down 0

  8. Dave Schuler says:

    Not to mention it presumes that the corporate compensations should be left alone…

    A difference between the salaries paid by private companies and public sector salaries is that the revenue used to pay public sector salaries is collected at the point of a gun. I think this requires a different sort of stewardship. Additionally, companies that don’t perform and continue to pay high salaries go out of business. To date the government has shown no signs of going out of business.

    Like or Dislike: Thumb up 1 Thumb down 0

  9. Andy says:

    A difference between the salaries paid by private companies and public sector salaries is that the revenue used to pay public sector salaries is collected at the point of a gun.

    I’ve always loved this particular point of fear mongering by the government hating right wing.

    OMG, look! The IRS men have guns! Rational people realize that taxation is the price of living in a civilized, modern society. The the government’s legal monopoly on force is balanced by our ability to vote the bums out of office.

    If you really, really hate America and the Constitution, which, of course, specifically allows for taxation of income, feel free to move to the libertarian paradise of Somalia, where there is no government monopoly on force and taxation is spotty, at best.

    Like or Dislike: Thumb up 2 Thumb down 1

  10. stuhlmann says:

    - Soldiers are paid whether they’re at war or not; the mercs get cut loose as soon as their contract expires.-

    Anyone ever hear of military draw downs – like those that occurred after Vietnam and the Cold Wars ended? A lot of good soldiers ended up out on the streets. We had 18 active duty divisions in the late ’80s and only 10 now. The military does not guarantee a job for life (or until retirement).

    I think the main point in the Black Water controversy isn’t the cost effectiveness in dollars of using contract security forces. It is the lack of accountability and the lack of discipline. A number of soldiers/marines have been or are being court marshaled for excessive violence against Iraqis. How many contractors have faced a trial for similar actions? The use of excessive force (or even the perceived use), either by military or by contractors, works against US goals in Iraq by making the Iraqi government seem ineffective and illegitimate in protecting its citizens. Black Water has become a liability in Iraq.

    Like or Dislike: Thumb up 1 Thumb down 1

  11. James Joyner says:

    Anyone ever hear of military draw downs – like those that occurred after Vietnam and the Cold Wars ended? A lot of good soldiers ended up out on the streets. We had 18 active duty divisions in the late ’80s and only 10 now. The military does not guarantee a job for life (or until retirement).

    Sure, I was caught up in the latter myself post-Desert Storm. Still, the Army invests in soldiers for the long term. My battalion commander had been in 17 years and never heard the proverbial shot fired in anger until ODS.

    Like or Dislike: Thumb up 1 Thumb down 1

  12. bob in fl says:

    I think we are all missing a very important point on the whole private contracts for security purposes debate. It makes perfect sense to employ subcontractors for jobs within the military & security establishments which do not involve those job descriptions because it is cost effective & frees resources to fulfill their primary missions.. But hiring firms like Blackwater to perform security duties for our Embassies is like GM hiring Ford to design & build its cars. Dumb.

    Of course if Blackwater is providing a superior service over the 40+ security agencies that now exist in the government at a cost effective price, then we really need to expand their duties. Why don’t we start by firing the FBI & Secret Service from the job of protecting POTUS, et al, & put Blackwater in their place? Waddaya mean Prime Minister Cheney would never go for that? Isn’t what is good for the geese good for the gander?

    Like or Dislike: Thumb up 1 Thumb down 2

  13. Michael says:

    The mercs, by contrast, don’t have a job unless there’s a war to fight.

    And we’re relying on them to help us end a war? Where is their incentive to get the job done right?

    Like or Dislike: Thumb up 0 Thumb down 1