Thursday 10 June 2010

Why £150k is the "legitimacy ceiling" for fair public pay

Or Should any political adviser earn more than the PM? (continued)

A question we asked recently, suggesting the answer would have to be "probably not":

The Coalition would now find it very hard to defend political appointments at above the Prime Minister's salary, in terms of their own arguments.

I rather suspect that we might get the salaries quite soon, and perhaps they will all be just miraculously below this, and/or that any amount above might be met by eg party donors. (But I am not 110% sure that there won't have been some late changes to achieve this).

And lo, it has come to pass, as Paul Waugh reports as the special adviser salaries published.

The transparency of the new politics does not, however, stretch to providing details of late breaking salary re-negotiations which could put an end to such jaded cynicism - or alternatively, of course, confirm it!

That Andy Coulson's pay has been reduced by about £110,000 as he exchanges the responsibilities of opposition for the pressures of government may perhaps demonstrate a certain assymetry in debates about the culture of high pay only addressing the public sector. (Though perhaps not quite winning the election was the difficult bit).


Charlie Beckett offered an entertaining critique of political and journalistic cliche - The Prime Minister's Salary is the size of Wales, and we noted the wage-inelasticity of the supply of prime ministers last time.

But the Prime Minister's salary benchmark suggests that the Coalition is very precisely aware of exactly where majority public attitudes make the distinction between high pay and excessive pay.

While "how" the money is earned matters as much as "how much", academic research in this area has found that salaries of £100,000 and beyond can be seen as "fair rewards" - and people can cite senior professionals they believe deserve to be paid that - but a majority of the public people see amounts over £150,000 as quote difficult to conceptualise and so belonging to a different world. The Fabian Society's public attitudes research for the Joseph Rowntree Foundation also reflected this:

* "Most people earning £150,000 have special skills: their salary is a fair reflection of their value to the company or organisation"
Agree 28%, Disagree 50%, Neither Agree nor disagree 20%, Don't know 2%

* "A salary of £150,000 is too much because it is more than anybody needs to live on.
Agree 47%, Disagree 29%, Neither agree nor disagree 22%, Don't know 2%


PS: The earlier thread contains a very helpful explanation, from our regular correspondent Zio Bastone, via Veblen, of the culture of high salaries as a "semiotic of success":

‘This is an important formerly public institution because we pay this guy gazillions,’ plus its counterpart, ‘I am a very important quasi, or formerly, public servant because I am paid gazillions.’

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