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The importance of paying politicians a fair wage

Arnold Schwarzenegger launches the Schwarzenegger Institute for State and Global Policy and Also For Making People Forget That Thing With The Maid at the University of Southern California in Los Angeles on Monday.


In Britain in 1840, Chartists were the equivalent of the Occupy movement: Their radical democratic demands were outrageous to the establishment and mocked as anarchism.

Consider the times:

  • The Reform Act of 1832 had given the vote to middle-class men but excluded the vast working class (as well as all women).
  • Elections were required only after six years, and were conducted publicly by yelling your support, leaving the voter open to bribery, intimidation and violence.
  • Parliament was the domain of the wealthy, with the poor lacking the property to qualify and the income to live while in London attending to the nation.
  • Gerrymandered rural constituencies dominated the electoral map, and their tiny size made them easy to buy for cash every seven years at general election time.

In response six MPs and six working men issued this revolutionary package of demands:

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  • 1. A vote for every man over the age of 21.
  • 2. A secret ballot.
  • 3. No property qualification for members of Parliament.
  • 4. Payment for MP’s.
  • 5. Constituencies of equal size.
  • 6. Annual elections for Parliament.

The People's Charter electrified the working class and terrified the Establishment.

The government response was merciless. Chartist leaders were jailed or transported to Australia. Factories were closed. Soldiers were used to suppress revolts.

As the economy picked up, the Chartist movement began to subside and its aims were eventually incorporated into the general policy debate. Every one of the Chartist demands was part of British and eventually Commonwealth democracies by the First World War, either in part or in whole.

Conservative Benjamin Disraeli passed the Reform Act of 1867, doubling the size of the electorate by lowering property qualifications. The Liberal William Gladstone introduced the secret ballot in 1872 and later made the electoral districts more equal. Inflation has made any remaining property qualifications small enough for just about anyone but nuns with vows of poverty.

The Chartist demand that took the longest to introduce was payment for MPs. Arguably, it may have had the biggest impact because it broadened not just the process for selecting MPs but the composition of people who sit in Parliament and make law.

The notion of paying politicians is relatively simple.

An individual of wealth can afford to neglect their business or employment while serving in Parliament but those of modest means cannot.

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This lack of suitable payment keeps the average person out of office, severely limiting the political rights of the vast majority of the population.

The result is a Parliament of the wealthy, introducing, debating and enacting law based on their experienced and biases.

It means a Cabinet of the wealthy, selected from Parliament, setting policy and managing departments based on their experienced and baises.

It means a wealthy Prime Minister, selected from Parliament, appointing officials, administering government and conducting international relations based on their experiences and biases.

Despite the obvious need for reform, MPs in the United Kingdom did not receive a living wage for their work until 1906 when they voted a payment of 300 pounds.

It is at exactly the same time that we see the emergence of the working class Labour Party as a major force in British politics.

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The issue of pay for politicians didn't only occur in Britain.

When first elected to the Presidency, George Washington was voted a salary of $25,000 a year. Washington, among the wealthiest men in America, didn't want to take the money until it was pointed out a future President may not come from wealth. By refusing the salary he would be setting a precedent that could hinder his successors.

Unfortunately, fewer current wealthy politicians have Washington's wisdom.

Michael Bloomberg serves as Mayor of New York for a dollar a year.

Arnold Schwarzenegger took no salary when he was Governor of California. The same is true of Mitt Romney as Governor of Massachusetts and Danny Williams as Premier of Newfoundland and Labrador.

For the very wealthy, dispensing with a salary is a metaphor that serves to insinuate that they are above pecuniary interests in the job that may put the people's interests second.

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In fact the bigger sacrifice is the opportunity cost of leaving their old profession. For instance, Mr. Schwarzenegger estimates he lost $200-million by not making movies while he was Governor. In comparison, the salary he refused was $175,000 a year.

Wealthy people who seek office should be lauded for what they are giving up, but one of those things should not be a salary.

Salaries for politicians open the door for anyone to seek elected office, be they a CEO or the person who cleans the CEO's office.

Refusing to take a salary undermines the democracy of the process, giving the wealthier candidate an electoral weapon a more modestly-salaried candidate cannot plausibly attempt.

But it also reinforces a myth that may lower the quality of people in public life.

Dispensing with salary reinforces the notion that everyone else is just in it for the money. It turns an issue of access to public life for all people into a negative. Like many populist gestures, it inverts a democratic principle, making the powerful appear without motive and the people appear craven.

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The reality is that paying politicians – and paying them appropriately – serves to improve our government and our society.

It's not popular to support the idea of paying politicians well, but research actually shows higher pay attracts better people to politics.

The Freakonomics blog highlighted a couple of recent papers that explore this question in developing nations.

One out of Brazil finds that "higher wages increases political competition and improves the quality of legislators, as measured by education, type of previous profession, and political experience in office. In addition to this positive selection, we find that wages also affect politicians' performance, which is consistent with a behavioral response to a higher value of holding office."

Another review of civil servant pay in Mexico found a similar relationship. "We find that higher wages attract more able applicants as measured by their IQ, personality, and proclivity towards public sector work…"

It would seem that not only do we need to pay our politicians as a fundamental issue of democracy, but we need to pay them appropriately to ensure our representatives are of a high calibre.

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The currently climate of government austerity makes any argument for MP pay increases moot. Elected officials – to have any moral persuasion to hold the line on public sector salaries – need to hold their own salaries in check first.

But the argument around MP pay is too often loaded in the reflexive belief that politicians make too much.

Remembering the previous extreme of paying MPs too little is just as important when finding an appropriate level of pay for our representatives.

Andrew Steele is a social entrepreneur and political observer living in Toronto.

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