South-Western College Publishing - Economics  
The Military is Looking for A Lot of Good People
Subject Disequilibrium
Topic Labor Markets
Key Words Recruiting, Unemployment, Career, Training, Pay
News Story

Military recruiting is tough this year. The Army expects to fall short of its goal by 8 percent, while the Air Force will be 10 percent below target, making it the worst recruiting year in two decades.

Surveys and interviews indicate that potential recruits are being attracted to the civilian labor market where unemployment is barely over 4 percent. Young people are keen to go to college and have a career. Even when they choose to enlist, money for college and training outweigh the motive of duty to country.

A military career is not attractive to many. Starting pay for a private is only $887.70 a month. People perceive a lack of freedom. They have to endure boot camp - at a time when many young people are out of shape. They perceive military personnel as engaged in unpleasant and dangerous activities and being moved frequently.

As a result, the Army is emphasizing patriotism and personal challenge, and is increasing the value of college tuition programs. Perhaps they could learn from the Navy which has met its goal this year - it had Spike Lee direct new slick TV recruitment ads.

(Updated August 1, 1999)

Questions
1. The news story indicates that there have been several changes in the labor market for military recruits. For each of those listed below, explain which determinant of labor supply has changed and how it has affected the labor supply curve:
  a) a decrease in unemployment in the economy
  b) less concern with patriotism
  c) a growing perception that military life is unpleasant
2. Draw a diagram of the labor market for military recruits. Show the market initially in equilibrium. Mark the equilibrium real wage.
  a) On your diagram, illustrate the effect of the changes in Question 1, assuming that real wages are unchanged. What happens to the number of recruits?
  b) Is the market in equilibrium? Explain.
3. Suppose that the Army and Air Force commissioned some slick TV ads of their own.
  a) Which determinant of which curve would be affected? Why?
  b) Draw the effect of a successful ad campaign on your diagram in Question 2.
4. Why is the Army increasing the value of its college tuition program? Explain the effects in terms of your diagram.
Source Andrea Stone, "Rich economy leads to poor recruiting," USA Today, June 24, 1999.

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