One of the things that you can usually expect Republicans to be consistent about is faith in market forces. They’re continually reminding us that we should trust market forces to allocate resources, as opposed to having politicians arbitrarily setting prices and picking winners and losers.
In the personnel marketplace, this means that if salaries are set below what the rest of the marketplace is bearing, we can expect to attract a smaller pool of talent willing to work at the below-market price. In a market economy, the theory goes, you get what you pay for. If you offer less salary, you attract less talent. If you attract less talent, you get worse personnel. If you get worse personnel, you get incompetent enterprises and poor outcomes.
For Republicans, this trust in markets is a not just any old belief. This really is their core, their bedrock. But it all goes out the window when there is a juicy demagogic opportunity in front of them.
For a politician, the most tempting political opportunity of them all is the chance to get self-righteous about a government pay increase. For demagogues, a government pay increase is as delicious a target as there is. One doesn’t have to be a particularly skilled, bright or courageous politician to score political points this issue. Jihadi John probably could get a standing ovation from Americans if he proclaimed his support for lower government employee salaries.
But again, political opportunism aside, what happened to Republicans’ bedbrock belief in trusting the market price? The Star Tribune has reported on the market price for state government Commissioners and found:
Before smaller raises in 2013 and 2014, agency heads had seen no increase since 2000. A recent analysis by Minnesota Management and Budget showed that before the raises, 14 of 15 commissioners were paid at or below the 50th percentile compared to commissioners in other states; eight were below the 25th percentile. The raises push Minnesota salaries above the median.
Dayton noted in his letter that mid-level managers at many Minnesota companies earn more than his commissioners, who after the increases are earning between $140,000 and $155,000 a year. DHS Commissioner Lucinda Jesson, for instance, manages a $17.7 billion budget and will now make about $155,000.
Dayton also pointed out that even after the raise, the state education commissioner is still earning about 80 percent of the yearly salary of superintendents at a number of larger Minnesota school districts. Education Commissioner Brenda Cassellius had been making $119,000 before the raise. By contrast, the head of Minneapolis schools earns about $190,000.
In other words, senior executives in Minnesota state government had been earning well below the market price being paid peers from other jurisdictions and states. Moreover, I would argue that Commissioners in Minnesota should be paid well above the 50th percentile, since Minnesota is a relatively high income state, ranking 11th highest in the nation.
What do Republicans – stalwart champions for trusting the market to determine prices – think about this market snapshot? The Star Tribune reports:
Republicans scoffed at the argument that Dayton would struggle to attract and retain talented commissioners without the pay increase. Plenty of talented people would serve as Dayton’s commissioners, “at the old price,” said Rep. Greg Davids, R-Preston.
In this case, Republicans effectively are insisting that we ignore the market prices, and instead let politicians set the price and pick winners and losers.
Why the inconsistency? The marketplace argument gets pushed aside in this case for three primary reasons.
First, with legislators earning a ridiculously low salary of $31,140 per year, everything looks extravagant. As I’ve argued before, legislators need a large pay raise to attract a better talent pool, and until they get it, legislators are going to be tempted to pay government employees below what the market is bearing, simply out of jealousy and spite. When they are being paid less than the average sewage worker, I can’t blame them for being bitter, but their own demagoguery is what prevents the problem from getting the problem fixed. In any event, legislators’ low pay is an important undercurrent in this debate.
The second reason market arguments gets ignored by Republicans in this debate is that many honestly have no problem making government less competent. At their core, Repulbicans want government to become smaller. Lower paid commissioners lead to less talented commissioners, which leads to less competent government, which leads to less faith in government, which leads to more political support for shrinking government. Score!
The final reason market arguments get pushed aside by Republicans in this debate is the most obvious. There are cheap political points to be scored. You can bank on the fact that the pay increase will be showing up in endless campaign ads during the 2016 elections. And when you’re only making $31,000 per year, sometimes the adrenalin rush that comes from scoring cheap political points is the best pay available.
– Loveland
Note: This post was featured in MinnPost’s Blog Cabin.