AMERICAN.COM

I’ve done quite a bit of work lately looking at how compensation in the public sector—either federal, state, or local government—compares to private sector pay. Recently, I got a call from Macmillan Slobodian of Our Generation asking how our methods might be used to analyze congressional pay. Initially, I thought that members of Congress were too different from other federal workers and there was too little data about them to apply the kinds of methods we’d used for the much larger population of federal employees.

I then started thinking about how you could do these kinds of comparisons and ended up putting together a short piece with Macmillan and David Williams of the Taxpayers Protection Alliance. Instead of comparing congressional pay to that of other American workers, I chose to compare how U.S. legislators are paid versus public officials in other countries. This measures relative pay among people doing fairly similar jobs. From a sample of 13 countries, we found that congressional salaries—which at $174,000 are equal to 3.4 times the average wage of a full-time American worker—are the second most generous in the world, behind Japan.

As it happens, though, no sooner do you finish writing something than you think of some other point you should have made. In this case, it was quantifying pay-for-performance: Members of Congress are paid more than public officials in other countries, but maybe they’re worth it because of the good job they do. (Stop laughing, we’re trying to be scholarly here.) But how do you measure quality of work?

One option I turned to is a measure called “fiscal space,” which was developed as part of a project called the Sovereign Fiscal Responsibility Index published by the Comeback America Initiative (see here for details). Fiscal space represents the amount of additional debt, as a percentage of GDP, a country could theoretically issue before a fiscal crisis is imminent. This is an economic measure, distinct from the legal debt limit. A higher number is better than a lower one.

So do America’s better-paid legislators produce a greater fiscal space? Umm, no. The chart below compares the pay of legislators in 13 countries with those countries’ fiscal space. The best “deal” for the taxpayer comes at the top left of the chart, where legislators are relatively low paid but the country has a large fiscal space. The worst deal comes at the bottom right of the chart, where pay is high but fiscal space low.

The United States isn’t the worst in the group, but it’s certainly not leading the pack. Personally, I’d be happy to pay more to members of Congress if they’d get us out of the fiscal ditch. But given the rate of progress on that front, a congressional pay cut would at least make us all feel a little better.