The levels are as follows:
- 1% (US begins with this)
- 1,5% (USSR, Britain and China begin with this)
- 2,5% (Germany, Italy, Japan and France begin with this)
- 5,0%
- 10%
- 20%
- 25%
While 1-2,5% may seem low, that number includes women, children, people to old to serve, and the otherwise disabled.
In the case of say Germany, that means Approximately 75000 Manpower is what the total armed forces to begin with are. This means that approximately 255000 Manpower is avaiable, and there is a monthly increase of 15300 or so Manpower. 1% of the German population is 320000 approximately. When you increase you your manpower policy, you get the increase as an instant increase to the available manpower. That is if Germany increased policy to III (level 4), then the Manpower they'd gain would be about 800000 manpower.
This all balances pretty well, and gives some very realistic proportions compared to real life.
I hope this answers some questions, if not, ask again

EDIT: One more piece of information. If Germany at the present production levels use all it's resources to produce ONLY rifle Is, then 92000 Manpower is used.