This is the first in what I hope to be a series of posts attacking some widely held but IMO erroneous beliefs, mostly about economics and business. My first target is the claim you sometimes hear that Congressmen are underpaid. Let’s consider the Illinois Congressional delegation:
| District | Congressman | Previous job | Degree | School | Over/Under |
| 1 | Bobby Rush | Insurance salesman, minister | ThM | McCormick Theological Seminary | Overpaid |
| 2 | Jesse Jackson, Jr. | Executive Director Rainbow Coalition, lawyer | JD | University of Illinois | Overpaid |
| 3 | Daniel Lipinski | Political science professor | PhD | Duke | Overpaid |
| 4 | Luis Gutierrez | Cab driver, teacher, case worker IDCFS | BA | Northeastern Illinois | Overpaid |
| 5 | Mike Quigley | Lawyer | JD | Loyola Chicago | Overpaid |
| 6 | Peter Roskam | Lawyer | JD | Kent | Underpaid |
| 7 | Danny Davis | clerk, high school teacher, non-profit program coordinator | PhD | Union Institute & University | (?)Underpaid |
| 8 | Joe Walsh | Fundraiser | Master Public Policy | University of Chicago | (?)Underpaid |
| 9 | Janice Schakowsky | Nonprofit program coordinator | BS | University Illinois | Overpaid |
| 10 | Bob Dold | Lawyer, pest control company owner | JD | Indiana | (?)Underpaid |
| 11 | Adam Kinzinger | U.S. Air Force pilot | BA | Illinois State | Overpaid |
| 12 | Jerry Costello | Law enforcement | BA | Maryville College of the Sacred Heart | Overpaid |
| 13 | Judy Biggert | Lawyer | JD | Stanford | Underpaid |
| 14 | Randy Hultgren | Lawyer, Investment Advisor | JD | Kent | (?)Underpaid |
| 15 | Timothy Johnson | Lawyer | JD | University Illinois | (?)Underpaid |
| 16 | Donald Manzullo | Lawyer | JD | Marquette | (?)Overpaid |
| 17 | Bobby Schilling | Restaurateur, real estate investor | ? | Blackhawk College | (?)Underpaid |
| 18 | Aaron Schock | Real estate investor | BS | Bradley | (?)Overpaid |
| 19 | John Shimkus | High school teacher | MBA | Southern Illinois | Overpaid |
In summary based on wages in their fields at their education levels and for people graduating from their alma maters, 9 are overpaid, 2 might be overpaid, 2 are underpaid, and 5 might be underpaid. Survey says: Illinois congressmen, generally speaking, are overpaid.
Maybe Illinois is atypical. Frankly, I think that Illinois is all too typical. I’m open to evidence-based arguments about the assessments I’ve made of pay grades. I don’t think there are a lot of ministers, high school teachers, or country lawyers who make $174,000 a year or more.
This might be a good time to repeat a claim I’ve made from time to time: paying Congressmen more wouldn’t attract a better class of Congressman. The actual result would be paying the same old Congressmen more.
I’ve mused over the list a bit, knowing the bottom few a bit better.
Schilling still has his pizza business, for which I believe he still draws a salary. On the other hand, Open Secrets says his reported salary in 2009 (pre-office) was $43k with a net worth between $251,005 to $789,999. He might be overpaid.
Schock’s odd because he entered politics while in college. Elected to the school board at 19, Illinois House Rep at 23 (youngest in history), U.S. Congress at 27. So, I don’t think he has meaningful comparables. His jobs during high school and college suggest an entrepreneurial streak, but if he stayed in Peoria, he probably would not have gotten a higher salary/benefits than a Congressman. Probably overpaid.
Shimkus got his undergrad at West Point, his MBA at Southern Illinois. One suspects that he might make more than as a high school teacher, but his interests lie elsewhere. Clearly the money isn’t necessary to get him into politics and violate his pledge not to run for reelection. Overpaid.
What people actually say* when they raise the criticism is that these people, along with judges/justices, could make more money if they left office and went to work in the private sector. This might be true. Is it a good thing or bad thing? I think it’s unsettling in that I’m not sure that one can identify how this would be true, but for the perception, that they now carry influence.
* One or two of your co-bloggers at OTB I believe.
My point in this post is that, absent the stint in the Congress, at least for the Illinois Congressional delegation, that almost certainly isn’t true. Estimates of potential earnings are made on the basis of things like education, experience, and previous earnings. On that basis Congressmen, again at least judging by the Illinois delegation, are overpaid.
I think the argument is largely based on false premises, over-generalization, and an over-estimation of the abilities and intelligence of elected officials. So, for example, while attorneys, generally, may have a median income of $87,000, attorneys who aren’t graduates of the top 15 law schools, editor of law review, etc. have a median income closer to $35,000. Most of the attorneys in the Congressional delegation aren’t Ivy Leaguers.
I thought you made this argument about teachers…. [Ducks and runs for cover]
The same reasoning applies. When the number of applicants at the given wage exceeds the number of jobs, it’s a pretty good indication that what you’re offering is above the market clearing price. That for many if not most of those in Congress their seat in Congress is the highest paying job they’ve ever had for I’ve produced in this post, is another such indication.
I’m not sure what is proven through comparison of one’s career before becoming a politician. Whether they are underpaid or overpaid should have nothing to do with whatever other careers they may have or have had.
Nonsense. When evaluating a prospective employee, including the pay that employee should be offered, you examine his or her resume.
There is no market for Congressional representatives. The only available way to evaluate what they’re worth is by previous experience.
“When evaluating a prospective employee, including the pay that employee should be offered, you examine his or her resume.”
A common sense rule suspended by the media and then by the electorate in the hysteria that surrounded Obama during the campaign. His resume said “academic, no executive potential.” His period as an executive? Well……
Dave,
That’s contradictory. You’re right there is no market for Congressional representatives, which is why “previous experience” is irrelevant in determining what they should be paid or whether their compensation is too much or too little.
That said, I agree with the conclusion of your post: