MARINE CORPS AIR STATION IWAKUNI, Japan -- Service members stationed in several Japanese localities will soon see a reduction in their monthly Cost of Living Allowance.
As a direct result of the COLA surveys submitted to the Per Diem, Travel and Transportation Allowance Committee earlier this year, Marine Corps Air Station Iwakuni residents will see a four-point total COLA reduction, with two-point decreases set for November and Dec. 1.
The reduction equates to an approximate $80 decrease in the monthly allowance, and according to Maj. Richard G. Rutter, Station comptroller, "will bring us more into line with the purchasing power of stateside residents."
COLA, which is based on spendable income, is the money paid to service members stationed in high-cost areas overseas. Since the program was intended to provide equity between overseas and the continental United States, the amount is affected by economic trends in either location, he added.
By combining recent results from a living pattern and market basket survey, "PDTATAC determined there was a growing disparity between the two," said Rutter.
According to the Per Diem Committee Web site www.dtic.mil/perdiem/faqcola.html, "The living pattern surveys show which local stores typical service members shop in and how much they by from the commissary and exchange. Using that information, shoppers conduct a market basket survey each year, pricing some 160 goods and services, from auto repair to potatoes, in many overseas locations."
Prices from the overseas survey are compared with those in the U.S. for equivalent goods and services, and "if the overseas market basket cost is greater than the U.S. cost, a COLA equal to the difference is paid," noted the Web site.
Rutter suggested that service members prepare for the reduction by adjusting their spending habits.
"Obviously, less money to spend means different things to different people," he added. "Since this is in response to market basket surveys both here and in CONUS, we can take a sort of 'misery loves company' comfort in knowing that our CONUS counterparts have less spending power too."