Why you should care
Because the status quo isn’t pleasing anyone.
Responding to gripes that his administration will be stocked with a record-breaking number of billionaires, President Trump declared last month that his picks will “fully understand the meaning of service” because they, like him, will be taking the post for a salary of $1 per year.
Will that assuage the doubts of the beleaguered American citizen? Most say they do not trust their political leaders, three quarters think the federal government is corrupt and almost half think politicians intentionally lie to get elected (and that last poll was conducted in 2014, before a presidential battle between two leaders whom a majority thought dishonest). Something clearly needs to change. So how about this? Let’s increase their salaries. Specifically, let’s increase the salaries of all elected officials — from the president down to town alderman — by at least a factor of 10. So the president would earn $4 million, congresspeople could expect a raise to nearly $2 million a year and most governors would be earning over a million a year.
Note: I’m not talking about what the current cohort deserves; I’m trying to fix a broken system for good. With the salaries of tech executives and hedge fund managers routinely in seven and eight digits, it’s no wonder that the brightest and best dream about Wall Street or Silicon Valley rather than making a difference on Capitol Hill. It is clear that many voters in November were convinced that businesspeople can make more successful and dynamic leaders than lifelong politicians — so why not try to attract the wannabe millionaires to politics in the first place? Indeed, some research on mayors in Brazil has shown that, as salaries rise, the quality of elected officials rises too, both in terms of their level of education and experience as candidates and their legislative performance once in office.
Higher salaries would arguably make elected officials more determined to keep their jobs, rather than spending their terms cozying up to private-sector allies and exiting through the revolving door that leads to K Street. Congresspeople can expect a whopping 1,452 percent pay raise if they become lobbyists after their term is up. If their salary were so high that they knew it could never be matched on the outside, they’d be incentivized to keep voters happy.
Indeed, that was the result of theoretical research from Stanford economist Renee Bowen and Vanderbilt political scientist Cecilia Mo. Using 50 years of data, they showed that, as governor salaries rise, the minimum wage rises and the tax burden on individuals falls. That, says Mo, is evidence that well-paid politicians favored voters over special interests. On the local level, where positions are often unpaid, low-paid or part-time, only the already well-to-do can afford to run for office.
Of course, for every study showing a positive correlation between politicians’ pay and their effectiveness, another finds the exact opposite. This is not because of poorly conducted research, but because “circumstances matter a great deal,” says Raymond Fisman, professor of economics at Boston University, who coauthored a 2014 study showing that, in the European parliament, an increase in salary actually decreased the quality of elected officials and had no effect on their legislative output. Indeed, the desired incentive to do a better job because of a salary hike will work only if officials have a realistic chance of being booted out of office (so we need to tackle incumbency advantage too). Plus, it “would probably be inappropriate” to hike politicians’ salaries at a time when government budgets are constrained and the average voter is struggling to make ends meet, says Jonathan Bydlak, president of the Coalition to Reduce Spending.
Still, while the academic studies may be inconclusive and not generalizable, no empirical study has been done into the size of wage hike that I’m talking about — because it has never happened before. Indeed, given the small number of countries and elected officials where data is readily available, researchers are “not in a world where we can empirically control for all aspects of what is going on” with this question, says Mo. That inspired the theoretical approach of her research. And with the U.S. budget deficit of nearly $600 billion, the salaries of elected officials are truly a drop in the ocean: “We have this massive debt and spending problem in this country and we haven’t got to that point because we’re paying elected officials too much,” admits Bydlak.
The outcry over Trump’s billionaire cabinet has been loud, while few have quibbled with the notion of a $1-per-year salary. Perhaps we should dust off the placards, get out on the streets and demand a pay raise — for the politicians.