For nearly 30 years, since the United States began relying on volunteers to fill the ranks of the armed forces, the military recruiter's job has been a tough one. Now that uphill battle is becoming a losing battle as the force struggles to recruit enough people--and comes up short. And the problem is only getting worse.

Ironically, demand is down: The force is 40 percent smaller than it was at the end of the Cold War. But supply has shrunk even more. When the volunteer force was born in January 1973, the military had a fighting chance to be competitive in the battle for new recruits. For a variety of reasons, economic and social, that is no longer true. And unless the picture improves, our armed forces will find themselves without enough sergeants and junior officers to lead their increasingly undermanned and "mis-manned" units--and ultimately unable to meet their missions.

The first step toward a solution is realizing that a serious problem exists. In discussions with defense experts and public policy analysts, and even with senior-level people in the Pentagon, I routinely hear that the U.S. military has always attracted sufficient manpower and that there's no reason why a continuation of the past approach will not succeed in the future. Even within the military, there remains what Navy Secretary Richard Danzig has labeled a "psychology of conscription," one that views manpower as a "free good."

I was a second lieutenant at Fort Sill, Okla., when conscription ended, and all of us in the armed forces held our breath. For the better part of three decades, the ranks had been filled by the draft. Selecting who would serve was always a difficult and contentious challenge for draft boards and became much more so in the late 1960s, as the Vietnam War became unpopular and controversial. Determining the number of soldiers needed, however, was simple: Take the number required to fill the ranks, subtract those who volunteered and draft the difference. Because of conscription, labor was relatively cheap and abundant.

The all-volunteer force adopted by President Richard Nixon changed everything. Suddenly, the military had to compete in the labor market as if it were a business. The initial efforts were not encouraging. Despite substantial pay raises--my own base pay rose four times in a year, from $480 to $620 a month--the armed forces quickly found that they were undermanned. Compounding this problem, those joining were of a lower quality than desired. By the late '70s, nearly half of all recruits were in the lowest mental category acceptable for enlistment. This was the major reason that Gen. Edward "Shy" Meyer, the Army chief of staff at the time, famously described the force as "the hollow Army."

Fortunately, help was on the way. The Army, the most labor-intensive service and the one where the all-volunteer concept had to succeed if it were to succeed at all, sent Gen. Maxwell R. Thurman to take over its recruiting command. Thurman, who went on to serve as vice chief of staff, was a brilliant soldier with a legendary ability for data and detail. He quickly concluded that attracting more high school graduates was the key to a quality force, and they became the focus of his marketing strategy. He tracked down their addresses, determined what television shows they watched, studied what appealed to their self-image and aspirations, and he sold the Army to them. Thurman chose the memorable slogan "Be All That You Can Be," and seared it into the consciousness of a generation. He pushed the Army college fund as a major attraction. He taught the Pentagon how to recruit, and by dint of personality and intellect he made the all-volunteer concept work throughout the 1980s.

In the mid-'90s, Thurman would occasionally drop by the Pentagon office where I directed the Army chief of staff's Manpower and Force Structure office. He was deeply concerned by this time that all of the leading indicators for recruiting were pointing downward. With recruiting stations closing and consolidating, he worried that young people believed the military was no longer hiring. Few of their parents had served, and high school counselors were not encouraging students to join. He sensed a massive, daily, yet subtle anti-recruiting campaign underway across the country and feared that few either recognized it or understood its implications.

Thurman was right, but even he could not foresee the extent of the problem. When he died in December 1995, America had yet to see sustained, record low levels of unemployment among service-age youth; or the wide expansion in sources for college assistance; or the shrinking of the supply of high-quality recruits. While the first two factors are undeniably good for the nation, together they create a serious, growing public policy problem in recruiting enough labor to fill the ranks of the military.

The nexus of the problem is simple. To borrow a phrase from the 1992 presidential campaign, "It's the economy, stupid." As Federal Reserve chairman Alan Greenspan has been emphasizing for months, the labor market is extraordinarily tight. The record low unemployment rate and growing labor demand are reinforced anecdotally as workers in certain traditional blue-collar fields are lured to assembly lines with stock options. Given such conditions, it should be no surprise that units are increasingly undermanned. All the services have lowered their recruiting goals, and all but the Marine Corps have failed to meet those new goals.

When the all-volunteer force began, unemployment among 16- to 19-year-olds was 13.7 percent. The lingering effects of the Vietnam War, the 1973 oil crisis, and other economic factors pushed it to 20 percent two years later, and it remained near that level for 20 years. It was not until April 1998 that the unemployment rate for this key demographic dropped below its January 1973 level. Thurman never had to recruit in such a tight market, one where economic opportunities for young Americans were plentiful and attractive.

But the low unemployment rates do not tell the whole story. The recruiting challenge is made more daunting because of the need for high-quality manpower. The pool of potential enlistees is surprisingly small and seems to be shrinking. Nationwide, there are about 14 million high school graduates between the ages of 17 and 21, prime recruiting ages. More than 70 percent of those graduates now attend college, which reduces the pool to less than 4.2 million. But the military considers only those who are physically and medically fit, have no disqualifying police record and score in the top half of the armed forces standardized aptitude test, which further reduces the pool to about 800,000.

Two years ago, the college attendance rate was 67 percent and was expected to rise to 70 percent over 10 years. But a recent study by the Education Trust, a nonprofit organization focusing on minority and lower-income students, shows that it has already risen to 72 percent. The military's select pool will shrink further if projections that college attendance will rise to 80 percent by 2005 are correct.

The armed services' demand for labor is large relative to this pool. Last year, the Army, Navy, Air Force and Marine Corps had a combined recruiting goal for both active and reserve components of nearly 280,000. In other words, to meet their objectives, the services had to attract one in three of the 800,000 young people in the select pool. The services, particularly the two with the most labor-intensive missions--the Army and Marine Corps--met their recruiting objectives throughout the military's downsizing of the '90s by lowering demand. Fewer people were brought in as the forces contracted to manpower levels that were down 36 percent from 1991 levels (the number of combat units is down even more--the Army went from 18 divisions to 10, for example).

But once the downsizing was complete in the mid-'90s, the pipeline had to be turned back on again, and the demand for recruits sharply increased. Within two years, the Army's need for recruits expanded from about 70,000 to nearly 85,000 annually. Why? Because the services are entry-level-only organizations. To grow the required number of sergeants and petty officers requires a large entry pool. Unlike a private firm that can go outside itself and hire new management and line supervisors, the services cannot. Under-recruiting was workable at a time when the forces were shrinking, but it was not a feasible long-term strategy for creating leaders.

Beyond the growing imbalance between supply and demand, recruiters lost one of their major selling points. The promise of higher-education assistance through the Army College Fund used to help bring high school graduates to the recruiting station. Today, however, there are a growing number of college assistance programs that lessen the appeal of this benefit, despite the fact that its value--as much as $50,000 per enlistee--has risen considerably. All but three states now offer some sort of college assistance program including scholarships and pre-paid tuition, and the federal government provides a range of programs from Pell Grants to the more recent Education IRAs and tax credits aimed at assisting lower-income students. As more potential recruits take advantage of these programs, they have less incentive to seriously consider enlisting.

Finally, continuing subtle changes in both society and the nature of the military's mission also have taken a toll on recruitment. As the second generation of young men and women who have never known anything other than an all-volunteer force comes of age, the presence in the American household of a parent with military experience continues to decline. In a recent survey, 21 percent of non-veteran parents said they would be "disappointed" if their children entered the military. Given that military missions have become increasingly diverse and often distant from the immediate interests and concerns of the American people, and military pay and other compensation has declined relative to the economy as a whole, this is not a surprising view.

If the armed forces are unable to fill their ranks, discussions about aging equipment and anemic funding for modernization, which dominate the current defense debate, will become relatively inconsequential.

The services have several options. One is to increase the supply of potential recruits. This would require a substantial increase in pay and benefits, very likely well beyond the generous 4.8 percent across-the-board increase just passed--the largest in almost 20 years. It would also necessitate a more concerted effort to recruit college students, and certainly college dropouts, and perhaps even high school dropouts who score well on the standardized test--a current focus of Army Secretary Louis Caldera.

Such steps must be balanced with the increased costs (already up 30 percent per recruit in the past three years) that would be required to expand the recruiting force. And they must be balanced with the understanding that the result may be a lowering of the standards that the services feel they need to maintain in an era of increasingly sophisticated weaponry.

Another solution is cutting the size of the force even more. Under this approach, the services would have to become considerably more serious about replacing manpower with technology. But the facts suggest that high-quality military manpower is increasingly scarce, and what is available may become prohibitively expensive. The sooner this circumstance is recognized, the better for the military and for the nation.

M. Thomas Davis, a retired U.S. Army colonel, is the senior defense analyst at the Northrop Grumman analysis center in Arlington.

The Never-Ending Story

ALARM BELLS

Since the U.S. military became an all-volunteer force in 1973, the armed services have managed to meet their recruitment goals in most years--but not without struggle. Their mission is made even more difficult by factors beyond their control, such as unexpected shifts in the economy and longer-term demographic trends. As a result, there have been periodic warnings of a military recruiting crisis. Some examples:

* 1979

An article in U.S. News & World Report says, "Enlistment figures . . . indicate that the experiment with all-volunteer services may be heading for trouble. . . . For the first time since conscription ended . . . all four services fell short of their recruiting targets."

* 1982

The Atlantic Council of the United States (a bipartisan group of military and civilian experts) warns that the military will not be able to meet its manpower needs with volunteers and concludes that a resumption of the draft may be necessary before the end of the 1980s.

* 1984

A Brookings Institution study predicts that the pool of "qualified and available 18- to 20-year-old males . . . is expected to decline from an annual average of 847,000 in 1981-83 to 687,000 during 1991-95."

* 1999

Undersecretary of Defense Rudy de Leon asserts that "recruiting is going to be difficult until we get into the middle of the next decade," citing low birth rates of Americans in the late 1970s and early 1980s.

QUALITY VS. QUANTITY

Throughout the 1970s and through the Reagan buildup of the 1980s, when the military's manpower needs were at their highest, the Pentagon employed a variety of incentives to attract the numbers it needed, including pay raises, signing bonuses and college education assistance. It also wrestled with whether to alter its standards, a debate that continues today in the Clinton administration.

* Leaders of the all-volunteer force put a premium on attracting "high quality" recruits, defined as those who are physically fit, have a high school degree and scored above average on the Armed Forces Qualification Test. Opponents of lower standards cite the lessons of a 1966 recruiting effort called Project 100,000. That campaign, which was touted as a way to provide jobs for blacks and poor whites (mostly from the South), allowed greater numbers of substandard candidates to be drafted into service. The 354,000 "New Standards" recruits were twice as likely as other recruits to be dropped from basic training and more likely to be killed in combat.

* In 1980, 54 percent of the Army's recruits had high school diplomas, and 57 percent scored below average (known as Category IVs) on the Armed Forces Qualification Test. In 1986, 91 percent of the Army's recruits were high school graduates, and its share of Category IVs had dropped to 4 percent. At the end of the decade, 11 percent of new Army enlistees were Category IVs and 89 percent had high school diplomas.

* Last year, concerned about falling recruitment rates, Army Secretary Louis Caldera directed the Army's manpower chief to develop a pilot program to determine whether the Army should accept more recruits with high school equivalency degrees. Under the plan, the Army would pay high school dropouts--who aren't eligible for military service--to earn their General Educational Development degrees. "This notion that quality is defined by being a high school diploma graduate has put us in a box that is really hurting our ability to recruit," Caldera said.

Caldera, the first Latino secretary of the Army, said he was particularly interested in reaching out to the Hispanic community, which is traditionally underrepresented in the military. Previously, the services have limited their recruits to 10 percent holding GEDs. His announcement drew fire from several congressmen and senators, who accused him of lowering standards at a time when the military is becoming more high tech.

FACTORED IN

The question of how recruiters can best meet their goals, and where they go in pursuing them, is one that has drawn attention ever since the draft ended.

* A study last year of recruitment advertising found that the military did not adequately track cultural changes in its target audience and shifts in the labor market. Caldera questioned the continued appeal of "Be All You Can Be," the Army's well-known recruitment slogan. Introduced in 1981, the phrase was judged the second most effective jingle of the century by Advertising Age magazine.

* Meanwhile, the battle continues over the military's effort to reach potential recruits on college campuses. Last year, Congress passed legislation allowing colleges and professional schools to bar military recruiters from their campuses without risking the loss of federal student-aid dollars. The law was designed to temper the 1996 Solomon Act, which required some U.S. agencies to cut off funds from colleges that banned military or Reserve Officer Training Corps recruiters.

IT'S A TOUGH JOB, BUT . . .

To meet their current objectives, Army recruiters must sign up one soldier per month.

* The Army's recruiting challenges have changed dramatically since the first alarm bells rang in 1979. Some comparisons:

1979 1999

Recruiting goal 159,000 74,000

Number recruited 142,000 67,000

Active recruiters 4,500 6,000

Signing bonuses $73m $118m

Sources: Associated Press, Christian Science Monitor, National Journal, Chronicle of Higher Education, Federal Document Clearinghouse, Defense Department