Outside of political considerations, the question of salaries is important because we link attracting talent to pay.
With the new cuts, the Alberta premier will make around $167,000, cabinet ministers about $172,000 and backbencher MLAs around $115,000. The average Alberta salary is roughly $53,000.
In a free-market economy, skills are valued for their productivity. The more skilled an individual, the more productive their labour and the greater the sums they can fetch for that labour.
The question of whether a salary is fair is legitimate but 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 an hour, it might be unfair. But 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 one occupation to another 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 you can compare public-sector positions to corporate managers or CEOs in the productive sectors, or compare elected positions to top public service jobs.
For example, while responsible for combined budgets totalling less than eight per cent of the province’s budget, the presidents of Alberta’s two largest universities each make over three times more than the Alberta premier.
Apples and oranges, some will say. That would speak to the difficulties in comparing, as well as to the poor value we assign to the work elected officials do. Citizens generally hold politicians in low esteem. This perspective may in turn be connected to poor government performance and the discontent in seeing people elected who have no relevant background or useful experience.
Assuming 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. The last premier of P.E.I., Wade MacLauchlan, took a pay cut to enter provincial politics. Alberta Premier Jason Kenney also has a wealth of legislative experience. But what of the rest?
Absent that deep sense of duty, all other incentives matter more.
We discourage skilled and experienced people from entering elected public life, since seeking office means forgoing significant income and often involves significant sacrifice to their families.
An MLA salary is disproportionately more attractive to a substitute 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 their average income capacity in the five years prior to being elected?
We’ll need a range, with a base and a maximum. The base would ensure MLAs are paid in accordance with the dignity of the office and cover those who have been outside the labour force. Set it modestly at twice the average salary in the province, which roughly coincides with current salaries after the five per cent cut. 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. But offering better pay would surely pull in more talented candidates, even if it wouldn’t necessarily guarantee the best talent would be elected.
Still, encouraging more skilled and proven talent to enter politics moderates the tendency to centralize executive power, improves the performance of elected officials, and maybe even improves the quality of representation.
It would be worth the extra cost.
Marco Navarro-Génie is a senior fellow with the Frontier Centre for Public Policy.