Possum: How much money do our top public servants make?
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Ever wondered what the average income of our top small “p” political occupations earn — such as basic wage federal MPs, High Court judges and top federal public servants? Andrew Leigh and Tony Atkinson in their updated paper The Distribution of Top Incomes in Australia not only tell us this, but also a great many other interesting things.
If you listen carefully, you can hear the tabloids winding up their outrage engines on those overpaid and out-of-touch judges and bureaucrats. However, the picture painted by the raw data is a little deceptive. If we look at how many multiples of the average wage these occupations have earned though history, their relative income patterns tell us an entirely different story.
While top federal public servants are earning relatively the same in multiples of the average wage that they were earning in the early 1970s — about five times the average wage — it is far less compared to the heady days leading up to World War 2, where the nation’s leading bureaucrats were pulling in up to 10 times the average wage. Similarly for Federal MPs and High Court judges, particularly High Court judges, their relative position on the national income scale has fallen significantly since the pre-war era. Gone for the High Court is the rarefied air of earning nearly 35 times the average wage! What makes it interesting is tracking these changes against income cohorts. If use the data from the paper to measure how many multiples of the average wage it took to for someone to get into the top 1% and top 0.1% of all income earners, it shows us how these occupations have been tracking compared to their fellow income peers.
While top public servants have been tracking slightly but steadily above the top 1% of income earners since the mid 1980s, our High Court judges have been left behind by their historical top 0.1% peer group. With our Federal MPs since the early 1980s, their top 1% peers have left them for dead. If we want to encourage the best people available to undertake some of the most important jobs in the country — our current pay rates are probably acting as a substantial disincentive. Yet, would we as a country be mature enough to give substantial pay rises to top public servants and High Court judges — people who would nearly all earn far more in the private sector? We’ve probably been leaching off their sense of public duty for years, and any substantial pay rises would become instant tabloid fodder. If we can’t even get their remuneration on historical par, we have Buckley’s of ever getting it for our federal MPs. For every quality candidate who might decide to pursue politics because of the increased earnings available, there would always be an example of some politician who isn’t worth three dollars an hour, let alone $200,000 a year. As long as our political parties continue to allow a fair bit of dross to float around our Parliaments, they’ll really only have themselves to blame for public opinion standing strongly against any substantial increase in the base level wages of our representatives. |
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12 Comments
“For every quality candidate who might decide to pursue politics because of the increased earnings available …”. There’s the problem in a nutshell. For me, anyone who’s going into politics because of the increased earnings is by definition not a quality candidate. I want fewer money-grubbing politicians, not more.
@ Charles. I fear you have missed the point. The sort of losers who go into politics ‘for the money’ are the same losers who would go into it whether the salary is $100,000 or $200,000. The sort of dickhead who goes into it for the money, is the same sort that is unlikely to be on $100,000 in the first place.
No, the real problem is that the current low salary acts as a major disincentive to quality candidates. You are basically relying on quality people to compromise their material living standards for the sake of the community. If you takes this to its logical consclusion, you are left with the wealthy, the mad and the ideologues running the show. No thanks.
I was once told by an old union official that “you should be paid what you’re worth, even if you love the job and would do it for nothing”. So be it for MPs. Pay them what they are worth, which is much more than what they get at the current time.
It seems to me that the problem is that politics is a sub-branch of media celebrity, basically its movies for the ugly or rock music for the talentless. So the rewards that attract people are power, fame and a sense of personal relevance and fabulousness. I would happily pay them more if the government was less about being best-in-show and more of a competent managerial organisation. Then you would have to pay politicians more or you would not attract candidates from actual decision making roles in corporations.
@Peter.
I think it’s sickening that you think quality people = salary. Lots of “quality people” don’t chase the filthy lucre and lots of rich people are mediocre in the extreme.
If you think the salary of politicians is low you’re not living in the real world. And I don’t want to be represented by somebody who thinks that that sort of elite salary is low.
As it is, most politicians have got their mitts in lots of other honeypots, so they don’t have a shortage of income from other sources if a few multiples of the average income + countless allowances isn’t enough for the poor dears.
@Altakoi
Attracting candidates from actual decision making roles in corporations? They already make half the decisions in this country without having to run for office - more money would not induce them to suffer the inconvenience of public scrutiny when it’s done so easily from their golden towers.
I personally want LESS not more corporate influence of political and public life.
My point exactly, Bob. Obviously politicians who were motivated by the desire for public service would be great. Politicians who are selected for their need for personal validation are not good. But if we are going to pretend that the reason you have to pay pollies a lot is that there is competition for talent, then I would at least like to see them have some of the talent on offer in large organisations. Because government, at present, is not the seat of decision making - this rests, as you say, within large corporations. That is also not good, but it is the way it is.
@Peter - I agree that some dud politicians will be attracted even by a relatively low salary, because they’re unemployable at anything else. But I’m deeply unconvinced by the argument that offering more money won’t attract even more who are only doing it for that reason (and even if the number didn’t increase it’d still be costing us more money). The point is that the people we really need aren’t motivated by money, so offering more just lowers the proportion of them in the pool.
Peter et al. You (and Andrew L to an extent) miss the bigger point. The average wage has risen significantly in the mid 20th century. Call it a triumph of liberal social democracy. Then the super-rich category exploded in the past decade or two. MPs (or judges) who wish to lament their lot* can pick and choose which of these two damned statistical measures they wish to highlight. The fact is, the Remuneration Tribunal process has dealt them wage justice in a way that many, many public sector wage earners could only dream about.
* even ignoring theit very generous super and related schemes.
We should pay everyone what they are worth, and extract the value from them too. The very top level public servants and defence force officers are at multiples of their next in line’s salary. I think this is a phenomenon that’s relatively recent. There is a discrepancy in paying appropriately for the middle and lower levels. It would be interesting to view that on a graph.
“Call it a triumph of liberal social democracy” says Graeme Orr.
It became noticeable since the mid- 80’s Graeme.
Call it a triumph of good governance of Hawke, Keating and Howard.
It’s called free trade, stable rules of business engagement (banking and regulation) and free enterprise capitalism.
Thanks Possum. Very interesting.
I am heartbroken.
I shall organise a charity fund-raiser for these poor blighted souls.
(Phelps: if we paid them what they are worth, we could save a hell of a lot of money. And in this I jest not!).
Possum, Hi mate long time no see. You have presented some lovely graphics here, but then you jump to a rather bizzarre conclusion re public servant wages: “our current pay rates are probably acting as a substantial disincentive.”
Actually, the real problem (as is blatantly obvious from your graphs, not to mention looking out the window) is that the mega-rich are ALL making far too much money. It’s just those those in the private sector are making obscenely MORE money than those in public service.
And don’t forget - many of those public servant jump straight into a cozy boardroom as soon as they have done their tour of public duty. Some (a la Dick Cheney) even go back and forth ad nauseam, handing out favours with one hand then reaping them in with the other.
I am not saying that there are NO altruists in the public service. I mean, there might be one, who knows?