From the earliest days of the republic, America’s Armed Forces have been compensated by military pay, commonly known as "basic pay." While the original pay structure was quite simple and straightforward, over time a complex system of pay, allowances, incentives, and bonuses has evolved. With the advent of the all-volunteer force in 1973, Congress has used military pay and its associated allowances to improve recruiting, retention, and the overall quality of the force. This book addresses the role of military pay in manning the Armed Forces, the types of pay increases used in the past, recent reforms in managing pay, and the role of the Employment Cost Index in determining pay increases.