Monday, April 12, 2010

Do we get the politicians we deserve?

I have to shake my head a little every time I read another story attacking MP salaries or criticizing their “gold-plated” pension plans. It’s an oft-repeated, often reflex criticism, and it’s an easy one to make. I hear it just as often as I hear people lamenting the quality of people that politics seems to attract these days. It’s ironic the two complaints are so often heard, because I don’t think the complainers see the connection: do we get the politicians we pay for?

Certainly it’s easy to attack the compensation level of our politicians. Particularly when times are tough. It’s our tax dollars that pay their salaries, after all. And it can be politically dicey to set your own compensation. That’s why the last government moved to tie MP salaries to those of judges, so MPs wouldn’t be making decisions about their own raises – the idea being to de-politicize the process. Unfortunately, by announcing a plan to freeze MP salaries in the last budget, the Conservatives brought politics back into the process.

If some in the public had their way, we’d pay our politicians nothing. That’s obviously a silly and untenable extreme. Toronto mayoral candidate Rocco Rossi has pledged to cut his salary by 10 per cent if elected – a popular populist gesture, no doubt, but a purely symbolic one that does nothing to address the real issues facing the city while only serving to devalue the role that politicians should – even if they often don’t – play in governing and administering multi-million and multi-billion-dollar businesses.

What do MPs make? The annual base salary of an MP is $157,731. A full minister adds another $75,516.00, and a minister of state adds $56,637.00 (meaning that demotion really cost Helena Guergis). The Prime Minister adds $157,731.00, the leader of the opposition $75,516.00 and the other party leaders $53,694.00. Other positions such as whips and house leaders also add to their base salaries. Then, there’s the oft-mentioned “gold-plated” pension plans.

So, is the average MP salary too high? While $75,000 is above the average Canadian salary, when you consider the hours and the job responsibilities – primarily writing and vetting the laws that govern the nation – I think they’re well earned, and probably below what someone with similar responsibilities could expect to earn in the private sector. Is just over $200,000 really out of line for a federal cabinet minister, who is essentially a senior vice-president in a multi-billion dollar corporation? I bet if you factored in salary, stock options and other compensation, the private sector salary for a senior VP would dwarf a minister’s.

And what about pensions? While it was reformed in the mid-1990s into what I’d argue is a comparatively silver-plated MP pension plan (this is how all the Reform MPs justified opting into the plan they’d campaigned so hard against) it is still much better comparatively than most private sector plans. I’d argue MPs forgo salary earning potential to a degree for pension security, but more importantly I think seeing MP pensions as the problem when making that comparison misses the point. It should be a wake-up call about the growing pension crisis in the Canadian economy, and the need to seriously address it.

My point here, though, is that I think we get the politicians we pay for. I’m not arguing for salary increases. While politicizing the process again is a mistake, I agree in principle with the freeze – my own salary has been frozen through the downturn. But I reject this knee-jerk bashing of MP compensation, because it’s counter-productive.

We all agree, I think, that we need to attract a better quality of politician then we’re getting these days. But are we going to get them by refusing to give them fair compensation? Yes, you don’t want people attracted to the pay and perks. But you also can’t expect the talented, experienced people we want in politics to forego the compensation available to them in the private sector just for the love of public service. That’s not fair to them, or to their families. Would you take a large salary cut in your prime earning years to go take the abuse of being an elected politician? If you want talented people, you need fair compensation. Let’s keep that in mind the next time we kvetch about pensions and salaries.

It’s also about the role of the MP

Compensation is only half the battle when it comes to getting better people into politics, though. The other is the fact that, in the modern parliament, the role of the average MP has become so devalued and meaningless that few people of quality would want to take it on.

Never mind MPs being nobodies off the hill, as Trudeau said. They’re nobodies on the Hill, shackled by rigid party discipline, their roles marginalized into meaninglessness, mere trained seals to vote the party line and parrot talking-points on demand. Even if they’re lucky enough to get into cabinet, under this government their room to maneuver, to innovate, to operate has been narrowed to a strict mandate letter from the PMO they daren’t stray from.

Given all this, it’s no wonder we lament the quality of the people who are attracted to political life these days. Far from the best and brightest, it’s more those attracted to the perks – prominence, travel, an above-average salary and, if they’re lucky enough to get into cabinet, a car and driver and the odd Challenger flight if they toe the line. Certainly not the best and brightest.

To be sure, there are still those on all sides who get involved because of a genuine desire and love for public service. They’re increasingly few and far between though, and quickly worn down by the excessive partisanship and inability to really get much of meaning accomplished.

Sadly, we get the politicians we deserve. Until we change our expectations, that’s unlikely to change.

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Saskboy said...

Last night I watched an episode of Undercover Boss, about a COO who tried entry level positions in the company he manages. He couldn't keep up, and was shocked to find they were getting their own training, and had no customers coming into one store because the marketing wasn't there.

I tell this story, because MPs are also COOs, who become out of touch with regular people working in the more important, and many, jobs of the country. They shouldn't make more than 10 or 20% above the average salary in their riding, so they make enough to live well, but not so much as to not care about their neighbours' quality of life.

And of course the same can be said for the CEO/COOs of the world. Unfortunately there's not much of a movement to shame these hyper-rich individuals into philanthropy or revenue sharing with their employees on a scale that makes them peers.

MPs are not our peers anymore, and they generally make poor representatives because of that reason alone.

Kyle H. said...

Interesting article, Jeff. I have to agree with a lot of your points, as well as Saskboy's comments. Maybe I missed it, but this is the sort of thing we should have discussed at Montreal, rather than some of the other, more, hm, "flamboyant" themes.

Ted Betts said...

Good article Jeff.

Two additional thoughts.

First, on compensation, you have to allow some compensation for the fact that an MP can be "fired" at any election through no fault of their own. (Of course, the corollary to that is that some can keep your job indefinitely despite poor performance like a Rob Anders or Dean Del Mastro.)

Second, another consideration on pensions: not only would an MP candidate be foregoing prime earning years, but those are the prime pension/RSP earning years too. With your income, there is always the chance you can leverage your MP years (and certainly your cabinet years) for a good, well-paying job post-politics, but you can't make up the investment years. And, should you land a job with a pension, you've lost years and years of contributions.

After they ended the "double dipping" (i.e. being able to collect a pension the moment you were "retired" as an MP), I think the pension arrangement is acceptable in the circumstances.

A Political Junkie said...

Your article was thoughtful and insightful.

What I find objectionable, is the growing disparity between the average Canadian family income and the average MP salary.

Many of Canada's MPs do not have the qualifications to make the amount of money in their private lives that they do in their public lives. While I agree that we do need to attract the best candidates, I'm not sure that money is the main issue. Some candidates start out with the best interests of their constituents at heart and have that "beat of of them" once they get into office. Others clearly have only their own interests at heart and are planning for the future. You need only to look on the Boards of some of Canada's largest (and medium-sized) companies to find names from past governments. While they may not be super-rich from their time in Ottawa, it can be a licence to print money once some of them return to the private sector.

As far as MP pensions go, I'm not thrilled with the idea that the Canadian taxpayer is on the hook for $45000 every year once Rahim Jaffer reaches 55 years of age. Oh that I had that kind of a pension after only 11 years of "service".

Devin Johnston said...

I've never bought into the argument that higher compensation for MP's will lead to higher quality MP's. The argument that "quality" people will be unwilling to leave high-paying jobs in the private sector in order to pursue a life of public service smacks of classism and elitism.

I see it a different way entirely: any person who isn't willing to take a pay cut in order to serve as an MP is probably not the kind of person we want in government anyway. On the contrary, a person who is willing to take a pay cut in order to go into politics is far more likely to be going into it for the right reason: a genuine concern for the welfare of the people of Canada.

In any event, I take serious issue with the idea that a person's earning capacity in the private sector is even remotely correlated with that person's "quality" or fitness to serve in the House of Commons. I betrays a fundamentally classist understanding that the richest people in society are ipso facto the best or most deserving people.

Finally, it should be pointed out that the largest part of most politicians' compensation comes is not salaries or pensions, but the high-paying private sector jobs that await those who "play ball" after they retire from politics. It happens so often it's a cliche now. The politician in Ottawa goes to bat for a certain industry or corporation and helps them shape public policy in a way that is profitable for the company. Upon retirement, the MP takes a short stautorily-required breather, and then gets an enormous contract to be a "consultant" for the company they went to bat for during their political days.

Jim said...

Good post Jeff.

There is a reason that the private sector offers major compensation to attract key is the same in the world of professional sport...they want the proven winners.

Government should be no different.

As an aside, I think we need more business people involved in government and perhaps less lawyers.

Anyway, I think that perhaps their pension plan is a little too sweet, but that hold true for the public service in general. However, I do not think that there base salary is excessive.

In a good year I easily make what a MP makes and I don't have to deal with all the partisan crap.

Offer MPs $500K a year with NO pension until 10 years of service and we may get some decent players.

10 years is several elections generally and gives the populous lots of opportunity to punt them for substandard performance.

There is no easy fix or answer, but rest assured that paying MPs less is not it.

Quality people expect renumeration, that is universal.

The folks that cry the loudest are usually the one waiting on the last Wednesday of the month. ;)

Jeff said...

Saskboy, I'm not quite sure I'd call MPs COOs, certaintly it would very between cabinet and backbench. As for the other problems with MPs and the system that you raise, I won't dispute them, but I don't think pay is the way to address them. I believe in fair pay for everyone, according to their job responsibilities. On the other issues, we should look at reforming party nomination processes, free votes, less party discipline, and other reforms to make MPs both more relevant and accountable to their constituents.

Junkie, I'll agree with you on the wage gap, but I don't think the answer is cutting MP salaries, that would be masking the underlying problem with ineffective populist symbolism. The real issue you raise is low average incomes, and we should really be looking at why that is, and what we can do about it.

Really Devin, classism AND eliteism. If I can quote John Lennon for a moment: "ism ism ism." I think the idea of fairly compensating people for the work they do is hardly any kind of a negative ism. It's really kind of fundamental. And is it really so crazy that, by and large, talented people will seek to maxamize their earning potential?

I'm not saying raising MP salaries will get us better MPs. But I am saying cutting MP salaries definitely won't. Indeed, it will do the opposite. But compensation is definitely part of the mix you need to attract quality people.

And I categorically reject the notion those who seek to enter public service need to take some sort of vow of poverty. Yes, certainly public service is a calling. You should be motivated by a desire to do good, service the public, and be willing to suffer the hours and the brickbats.

But again, I ask, why is it wrong to think people should be fairly compensated for the work they do? Why should that be acceptable in every other section of the economy except public service? That seems like some kind of ism to me.

Should we extend that philosophy to civil servants as well? Should people that choose to enter the civil service me solely motivated out of the will to serve, and willing to take cuts in pay and benefits to do so?

I tend to think PSAC and CUPE might have some issues with that, don't you?

And finally, you describe the American corporate political system, but what relevance does this have to Canada? Can you provide examples?

In our system, corporate and union donations are banned. The ability of an MP to influence legislation one way or another is practically nill. So just who are these MPs that are "playing ball," what sort of ball are they playing, and who are they playing it for, exactly?

You might have better luck making that argument if you replace MPs with ministerial staffers.

Devin Johnston said...

Jeff, I have no problem with fair compensation for the work. In fact, I've written on my blog in the past that I'm not opposed to the idea of increasing MP's salaries, as I think they do extremely important work and should compensated in a manner commensurate to the importance of the work.

What I'm saying is that I reject the argument that higher salaries will lead to better MP's. You say in your comment:

"I'm not saying raising MP salaries will get us better MPs. But I am saying cutting MP salaries definitely won't. Indeed, it will do the opposite. But compensation is definitely part of the mix you need to attract quality people."

I think that's a pretty fine distinction to make. So, salaries are needed to attract quality people, but higher salaries don't attract higher quality people? But lower salaries will attract lower quality people? Sorry, Jeff, but the first sentence that I quoted is clearly false: you are saying that higher salaries will attract higher quality people. The pith and substance your post was to posit a correlation between salaries and quality of MP's. I'm suggesting there is no such correlation.

Jeff said...

Devin, I'm saying fair salaries will attract a larger number of quality people, and lower salaries will attract fewer quality people.

Look at it this way. There's a pool of quality people out there we'd love to see in public life. A percentage are willing to put their hats in the ring now, and some are successful. Another percentage are interested, but are unwilling to take the leap for any number of reasons, such as the partisanship, ineffectiveness of the job, the sacrifices to family life and, yes, salary and compensation.

What I'm saying is that I want as much of that pool of quality people that we all want in public life to make that decision to leap in, so we should look at how we can maximize their participation, and what is restricting it.

And one of those factors is, indeed compensation. Lower compensation will shrink that participation. I don't think we need higher salaries to maximize it though, I think levels are already fair.

My point was a response to those calling MPs overpaid and attacking benefits and pensions, saying you can't on the one side say we need better people in public life while at the same time say we pay them too much. If you want good people as you say, you need to pay them fairly. Which we do. Don't pay them fairly, it's harder to get good people. Simple enough.

The Invisible Hand said...

And what about pensions? While it was reformed in the mid-1990s into what I’d argue is a comparatively silver-plated MP pension plan (this is how all the Reform MPs justified opting into the plan they’d campaigned so hard against)

...and the fact that Chretien changed the rules so they weren't allowed to opt out anymore.

(Although a few Reformers, most notably Deborah Grey, did buy back into their first years of the pension that they had originally opted out of.)

Jacques Beau Vert said...

In an ideal world, they'd all be making millions of dollars for their outstanding and exemplary work -- but honestly Jeff, I don't think most MPs really truly deserve a raise right now.

And I don't think most of them got into it for the salaries. We'd see mainly the main crew there today had the salaries been 10K higher 10 years ago.

Frankly, Parliament's not working hard enough or smart enough to merit a raise, in my opinion.

Jeff said...

Jacques, I'm not arguing for a raise. Indeed, I said I support the freeze. What I'm arguing is that current salary levels are deserved, and that paying people fairly is part of attracting quality people.

Unknown said...

You make some solid arguments. Nice of you to quote salaries for various elected positions. But I (and perhaps you) really have no idea what politicians make. However, you need to adjust for the tax free portion of salary, factor in the sweet pension, and add in the "expenses" (that are really compensation, as they are allowed to keep what they expense or it is something the average person would pay for out of their own take home pay) and other perks, it would be more comparable to what the average person makes. I would bet the adjusted salaries are much much higher, if not double what is quoted.