Insuring Mobilized Reservist Against Economic Losses. An Overview

The Total Force Policy, adopted as part of the move to an All Volunteer Force, placed greater reliance on Reserve forces to meet military contingencies. Operation Desert Storm (ODS) was the first large-scale test of this policy. Approximately 250,000 reservists were mobilized during ODS; these reservists played a critical role, particularly in logistical and medical support missions. However, one problem that surfaced during ODS was that many reservists suffered economic losses during mobilization. These losses occurred because military pay often did not cover the combined loss of civilian pay and the additional expenses incurred by reservists and their families as a result of mobilization. These losses were substantial in cases where reservists had high civilian incomes or where reservists were self-employed. In the latter case, businesses or partnerships often suffered continuing losses after demobilization because of the loss of client good will. These economic losses may not only create hardships for reserve families during a mobilization but could also make future recruiting and retention more difficult.