Recently announced pay cuts to Alberta elected representatives raise the important question whether our elected representatives get paid too much or even enough. Outside of political considerations, the question of salaries is important because we link attracting talent in connection to pay.
With the new cuts, the Alberta premier will now make around $167,000, cabinet ministers around $172,000, and backbencher MLAs around $115,000. The average Alberta salary is roughly around $53,000.
In a free market economy, market principles inform salaries. Skills are valued for their productivity. The more skilled an individual, the more productive her labour, and the greater the sums she can fetch for that labour.
The question of whether a salary is fair or unfair is not illegitimate, but it’s less relevant outside the framework of its productive value to an employer.
If an employee generates $900 worth of hourly productivity and only receives $10 as hourly pay, it might be unfair. Similarly, paying a few million yearly to someone who brings billions to a private corporation is not outlandish. Conversely, paying employees a lot more than the productive sum of their labour is simply not sustainable.
Although comparing the productivity of an occupation instead of another inside a business can be difficult, the real difficulty is in comparing occupations outside the productive market forces such as academic jobs, public sector jobs, and those of elected officials. But one can make comparisons of public sector positions to corporate managers or CEOs in the productive sectors, or comparisons of elected positions to top public service jobs.
For example, while responsible for combined budgets of less than 8 percent of the province’s budget, the presidents of Alberta’s two largest universities each make over three times more than the Alberta premier does.
Apples and oranges, some will say, and that wouldn’t be an unfair comment. The comment would speak to the difficulties in comparing as well as to the poor value we assign to the work elected officials do. Such attitudes are connected to the low esteem citizens have of politicians, and these attitudes may in turn be connected to poor government performance and the discontent in seeing people get elected with no relevant background or useful experience to be legislators.
Assuming to be true that better pay attracts better talent, paying politicians mediocre salaries risks attracting average or lower than average skills. Only a few talented and uncommon citizens, well-educated on the duty to serve, will step up regardless of pay. Like the immediately former PEI premier, who took a pay cut to enter provincial politics, Alberta’s premier is one of them. But what of the rest?
Absent that deep sense of duty, all other incentives matter the more. We discourage skilled and experienced people from entering elected public life, if the implicit demand is that those seeking office forgo significant income at significant sacrifice to their families (unless one is independently wealthy or has a trust fund). An MLA salary is disproportionately more attractive to a substitute school teacher or a young trade union researcher than it would be to a moderately successful CEO, for instance.
But what if we could reach a fair and better way to attract greater talent outside of the extremes?
Why not structure MLA pay according to the average income capacity that each individual citizen enjoys in the five years prior to getting elected?
We’ll need a base and a maximum range. A base would ensure that MLAs are paid in accordance with the dignity of the office and cover those who have been outside of the labour force. Set it modestly at twice the average salary rate in the province, which roughly coincides with current salaries after the 5 per cent cut. At the same time, establish a ceiling at roughly twice the average pay of a university president, which might loosely be around $1 million a year. Eliminate post-employment benefits and pension schemes.
Money is certainly not the only consideration for qualified people to run for office. Offering previous average earnings would surely pull more talent into competing for candidate nominations, even if it would not necessarily guarantee that the best talent there is would get into government.
Still, the balance would be of greater benefit: encouraging more skilled and proven talent into the Legislature moderates the centralizing tendency in the executive power, improves the performance of those elected to government, and maybe even improves the quality of representation. It would be an extra cost worth paying.