That people volunteer at all is amazing to me. I signed up for the Marines in 1981 and made $501 a month (which even back then was crap money) and had four years of living in barracks with up to 80 other men. Granted, the military is not supposed to be Club Med but the conditions I lived under in the early 1980s would be intolerable to about 97% of the rest of the U.S. population.
A common denominator among my fellow Marines was poor economic conditions at home. None of us came from well-to-do families and most of us came from broken homes and grinding poverty. For us, the military was a chance to escape our environments. But for those from properous families, they would have to be nutcases to sign up for what we went through (unless they went in as officers which is a whole different world).
With the phenomenenal economy we are now enjoying as a nation, it should come as no surprise that enlistments are down. The lower classes are probably tapped out so far as military recruiting. Thus, we need to attract some middle-class recruits by increasing pay and improving living conditions on base.
I also joined in 1981, though I was always in the Guard so I didn't have to live in those conditions full time. It was a good experience for me.
Today the standards are so much higher that I couldn't have gotten in. I think most people don't realize how tough it is to get in -- we take only a fraction of those who wish to join. And that's means it's easy to open the spigot a little wider if we wish, by going back to some of the looser standards of the past -- when our military was still very good. I don't have any worries that we'll get all the people we want.