Monday, February 28, 2011

How to set politicians' salaries

There's been some debate recently here in Toronto about whether our city councillors should get a pay raise. On one hand, they already get way more money than most of us and the city is short on money. On the other hand, it would be morally wrong for me to oppose a cost of living increase for anyone. I don't object to politicians being paid more than me. They don't have job security, they're subject to public scrutiny, and usually have to quit (or at least take unpaid leave from) their regular job just to run for office (with no guarantee of being elected.) But there needs to be some way to make their pay reflect the average citizen's situation.

So here's what I came up with.

Each politician's salary is the sum of the following numbers:

  • the median individual income in the jurisdiction they represent
  • the median individual income of all people represented by their level of government
  • the median individual income of the poorest 20% in the jurisdiction they represent
  • the median individual income of the poorest 20% represented by their level of government


(For the purposes of this post, "the jurisdiction they represent" means a ward at the municipal level and a riding at the provincial or federal level. "People represented by their level of government" means everyone in the city, province, or country at the municipal, provincial, and federal levels respectively.)

If the sum of these four numbers is not within a range that's commensurate with current salaries for that particular government, then the total is multiplied by a coefficient. The coefficient is whatever number will make the average salary under the new system equal to the average salary under the old system. The coefficient will then remain constant year to year.

The result of all this is that politicians would have an immediate personal investment in the fortunes of their own constituents and their level of government as a whole. The poorest 20% receive extra weight to make sure we don't create an incentive to make the very rich excessively richer (thus bringing up averages) while ignoring ordinary people. Similarly, we're using median instead of mean because of what we learned here, although I'd accept mean if there's a sound argument for it.

Possible issue: under this system, representatives of ridings with higher incomes would get more money.

Possible mitigating factor: maybe that will just mean that their income is commensurate with the cost of living in the riding, so it might all even out.

Another possible issue: "star" candidates who are parachuted in to ridings where they don't live because the parties think they can win will have more incentive to pick richer ridings.

Possible mitigating factors: 1. Might this already be happening anyway? 2. Would it actually affect the results that citizens get?

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