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Why we should end the aviator continuation pay bonus program: the author responds.

Sir, given your background, you are by far the most qualified person who has offered data for review. Before I respond to the slides from the community of practice, I would like to focus on your statement "I have said several times in the past that the bonus is a retention tool, not an entitlement. ... The bottom line is that the Air Force will keep ACP in place as long as the service is failing to meet its requirements." First, I agree that, given the unmanned aircraft systems (UAS) and other human-airframe needs, the Air Force could definitely use every (qualified, productive) aviator that it can retain. Second, my policy review of the ACP bonus used this standard: "Does the ACP bonus cause pilot retention?" To elaborate, "causality" or the claim that "factor A caused reaction B" depends upon three standards:

1. Factor A occurred before reaction B.

2. Changes in reaction B occurred in correlation with changes in factor A.

3. No other factor simultaneously caused reaction B.

Within the context of the ACP policy, these three standards might be stated as follows:

1. The ACP bonus's ability to affect a pilot's retention decision occurs before a pilot decides to remain in, or separate from, the Air Force. This causal standard is not in dispute.

2. Changes in retention rates occur in correlation with changes in ACP bonus amounts. This standard of causality is not met. A cursory review of retention rates before and after the terrorist attacks of 11 September 2001 (9/11) (such as the ones in the community of practice slides) shows that retention rates did not gradually climb as ACP bonus amounts rose. Instead, retention rates correlated with a competing causal explanation, as elaborated in causality standard no. 3.

3. No other factor simultaneously caused the increased pilot retention. Condition three does not hold with regard to ACP's causality. A strong case can be made that the simultaneous factor of "civilian airline opportunity declining" caused the increased pilot retention. Using pre-9/11 data, a fighter pilot (who also earned a PhD) researched this issue. (See Col Richard Fullerton, "An Empirical Assessment of US Air Force Pilot Attrition," Defense and PeaceEconomicsjournal, 2003.) His logistic regression analysis suggested that the biggest factors predicting retention were "the pay differences between the airlines and the USAF, the strength of the US economy, and the demand for pilots by the major airlines."

This corresponding pattern of pilot-retention behavior continued after 9/11, when civilian airline opportunity declined as furloughs increased, annual earnings were cut, and pension values declined from "defined benefit" plans to "defined contribution." Compared to civilian airline opportunities, the excellent pay and benefits of the military became even more attractive. Patriotism must have played some part in the higher retention rates, but such patriotism was not, by itself, strong enough to keep retention rates high before 9/11, when increased operations tempo caused increased stress to the rated force (e.g., family separation).

Thus, I agree with statements such as "the cost and time required to create a qualified aviator to be an instructor or staff officer are high." At the same time, based upon the evidence that I have reviewed, I believe that these statements should also include the following: "Yet ACP has not been shown to cause retention of those positions, at least not when compared to the magnitude of the impact from reduced airline opportunity or operationstempo stresses." We might also note that "cadets sign up for their 10 years of service, which will include instructor pilot duty, without consideration of the ACP bonus."

Additionally, if I am interpreting your Air Staff reference correctly, I must begin by stating that I have never served on the Air Staff, so I can only speculate about the implied Air Staff belief that ACP is helping "retain every aviator we can at this time." If the Air Staff's guiding rationale is to be able to say to Congress or the chairman of the joint Chiefs of Staff, "We are doing everything that we can to obtain high pilot retention, including large bonuses," then continuing the ACP policy makes sense from that rationale.

At the same time, if the senior leaders are saying, "The ACP bonus is causing our higher retention rates," then they have probably been misinformed. The rational, empirical perspective strongly favors "lower civilian airline opportunity" as the dominant reason for the higher retention rates.

Unnecessarily spending bonus money is accompanied by an "opportunity cost." That is, given that the preponderance of the evidence suggests that ACP has an "insignificant causal effect" on retention abilities, where might that ACP money be better placed in order to create a more effective war-fighting force? Sir, I would wager that you have more accurate numbers than I, but for the moment, let us assume that each ACP cohort has a contract of five years, with an average of 500 pilots accepting each year. That stream of money would then be $62.5 million per year (500 pilots x $25,000 per year per pilot x 5 cohort years = $62,500,000). It would seem that $62.5 million per year could significantly enlarge the UAS school for nonrated individuals (simultaneously increasing the pilot population while reducing the need for undergraduate pilot training graduates to do the UAS mission). (See SSgt Matthew Bates, "Air Force UFC: New Course Teaches Airmen the Basics of UAS Operations," Airman Magazine, 25 February 2009, http://www.air 123137103.) Alternatively, that money could be directed to improve our nation-building abilities through security forces bonuses, civil engineer bonuses, and foreign language immersion schools.

Given the space constraints associated with writing this response, I must selectively comment on but a few of the community of practice slides that you offered. These slides appear to mirror many of the assumptions that surround the ACP-effectiveness discussion. For example, one slide shows a predicted retention line and includes the accompanying statement "assumes ACP in place for the outyears." Why "assumes"? The slide implies that ACP will cause the retention rate, which appears to be a misinformed assumption when viewed from an evidence-based perspective. Another slide states that "rated retention is currently a bright spot" without bringing in the causal link of reduced opportunity in civilian airlines. The term "currently" also seems to imply a fragile condition-there is no mention of the higher than 60 percent retention rates of the last several years, nor of the projected continuation of poor opportunities in civilian airlines. (See "Airlines 'Shrinking by All Measures,"', 20 December 2008, news/air traffic falls. reut/index.htm.) Lastly, one slide states "the goal for FY09: retain every rated officer possible while being fiscally responsible!" Given the excellent pay, health benefits, pension benefits, and aviation career incentive pay that pilots already receive, the case for the ACP's representing fiscal responsibility, when viewed from a causality framework, appears weak.

If I have overlooked any of your concerns (or any additional current reader's concerns) or any other key information, please let me know, and I will respond accordingly. I appreciate the opportunity from ASPJ to offer you a response as well as explore further the issues of "fiscal responsibility, relative to dollar effectiveness."

Maj Brian E. A. Maue, USAF

US Air Farce Academy
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Title Annotation:Ricochets and Replies
Author:Maue, Brian E.A.
Publication:Air & Space Power Journal
Article Type:Letter to the editor
Date:Jun 22, 2009
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