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Congressional Pay and Household Income (2011 Dollars)

Thursday, September 19th, 2013 Leave a comment Go to comments

Wonkblog_congressional_pay-1

A current member of Congress gets paid $172,000 a year. Most people would be satisfied with taking home that salary, especially since $172,000 is more than three times the median household income in the United States. However, Timothy B. Lee from the Wonkblog, makes an interesting argument for why members of Congress should get paid more. Here is his reasoning:

Private organizations pay the highest salaries to the people with the most authority. They do this for two reasons. First, high salaries allow an organization to recruit the most qualified people to fill the position. And second, the high salary gives people an strong incentive to give the job their undivided attention.

If a private company were having trouble retaining senior executives because they kept accepting higher offers at other companies, the first thing it would do is raise executive pay. Raising salaries would be especially urgent if a company found executives giving sweetheart deals to vendors and then taking lucrative jobs with the same vendors. Obviously, we’d hope executives wouldn’t behave that way regardless of the financial rewards. But a pragmatic firm would pay competitive salaries to make sure executives weren’t even tempted to sell out their employers.

The government faces precisely this problem. Many members of Congress spend a few years in public office, making $172,000 per year, and then retire and take lobbying jobs that pay several times as much. Few members of Congress engage in explicit quid pro quos. But it’s hard to believe that they aren’t influenced by the fact that the person lobbying them today might be their employer in a few years.

Obviously, it’s hard for a taxpayer making $60,000 to relate to someone who views a $172,000 salary as inadequate. But members of Congress are part of America’s elite. Their peers are bankers, entertainers, corporate executives, doctors, and lawyers. The most successful people in all of these professions make a lot more than $172,000. They’re living in nicer houses, sending their kids to better schools, and taking fancier vacations than members of Congress are.

Lee concludes his argument with this:

Paying members of Congress more wouldn’t eliminate all temptations for corruption. But if we paid competitive salaries, a member would be much less tempted to treat his or her job as a stepping stone to a more lucrative job in the “private sector.”

While I took note of the fact that members of Congress make less than 70 percent of what he or she would have made in 1970, I am not entirely convinced that higher salaries would make Congress more productive.

Source: Wonkblog

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