Political Winners and Losers

October 29, 2010

Does it pay to be in Congress? According to our recent study, yes it does! By using our extensive salary database, we at PayScale compared the pay earned by Congress Members and Obama's Cabinet to the typical pay they could earn based on their educational background (School attended, Highest Degree Obtained, and Year Graduated).

Over 90% of the 552 people studied earn a federal government pay that is higher than the typical pay for those with the same educational background. In fact, over a third of the members of Congress earn a pay that is at least double the typical pay for those with the same educational background.

In this post I will discuss the methodology of this study and some interesting highlights, including who are the salary winners and who are the salary losers.

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Political Winners and Losers Methodology

To start this study, we first needed to find the educational backgrounds of the members of Congress and Obama’s Cabinet. Both the House Press Gallery and Congress.org Congressional Directory provide biographical information on the members of the 111th Congress. As far as the Cabinet Members, we found their educational information from their respective department’s page (e.g. Department of Education, Department of Veterans Affairs, etc.).

Using the aforementioned sources, we found the highest degree obtained, school attended and the year of graduation. Based upon these three variables, we utilized our extensive database to find the median (50th percentile) pay of those with the same educational background.

When data are available, we report the median pay for graduates from the specific school that hold the same degree and graduated around the same time. For some smaller schools, or much older graduates, data are limited. In these cases, we find the median pay of graduates with the same degree who graduated around the same time and don’t limit the data to a specific school.

For example, President Obama graduated in 1991 with his J.D. from Harvard Law School. The median pay for 1991 JD Graduates from Harvard Law is $198,000 — this pay represents the typical earnings for those with the same educational background as Obama.

Please Note: There are several members of Congress who obtained their college degree later into their career/at an older age (over 25 years old) and thus the pay for those with similar educational backgrounds may represent a younger age group and thus lower earnings. These people are denoted by an asterisk in the table.

Once we found the typical pay based on educational backgrounds, we needed the federal government pay for comparison. The 2010 federal government pay breaks down as follows:

Rank-and-File Members of the House and Senate: $174,000
Senate/House Majority and Minority Leaders: $193,400
Speaker of the House: $223,500
Cabinet Members: $199,700
Vice President: $230,700
President: $400,000

Lastly, we found the ratio of the federal government pay to the median pay based upon educational background. A ratio greater than 100% implies the politician is a winner in terms of government salary, while a ratio less than 100% implies they are in fact a salary loser.

Continuing our above example, Obama’s government salary is $400,000, which gives a ratio of 202% ($400,000/$198,000) and thus he is a salary winner.

Political Winners and Losers Interesting Tidbits

Over a third of the members of Congress earn a pay that is at least double the typical pay for those with the same educational background.
For the salary winners in Congress and Obama’s Cabinet, their pay is higher than the typical pay for those with the same educational background by ~10% to 480%.
Being a member of Congress/Obama’s Cabinet is not always a win:
- Of the 552 people studied (U.S. Congress, President Obama, Vice President Biden and all Cabinet Members), 44 earn a pay less than or similar to the typical pay they could earn based upon their educational background.
- Of these 44, 15 hold an MD degree, 24 hold a Law Degree and 5 hold an MBA
- Thus, MDs and graduates of a few select law and business schools (e.g. Harvard, Wharton, University of Virginia) are the only ones to take a pay cut by joining Congress or the Cabinet.
Both political parties contain roughly the same percentage of winners: 91% of Democrats and 93% of Republicans.
The biggest winners are:
- The 31 members of Congress whose highest degrees are high school diplomas, certificates and associates degrees
- The 13 members of Congress with master’s degrees in Social Work, Education and Divinity
- The 7 members of Congress who earned their bachelor’s degree since 1998
Obviously, many members of Congress and the Cabinet had exceptional careers before entering Congress, making them “winners” relative to their college classmates even before entering politics:
- Heath Schuler was a first round NFL pick who signed a ~$20 million 7 year deal
- Al Franken was a successful writer and comedian
- Jay Rockefeller is a Rockefeller (inherited wealth), enough said
- Darrell Issa built a successful car alarm business
In this study we focus on typical (median) pay, but there is a lot of variation in the pay of graduates:
- For example, as mentioned above, the median pay for someone with Obama’s educational background is $198,000 — roughly half the pay he earns as the president ($400,000).
- However, the top 10% of Harvard Law Grads from ~1991 earn a pay over $400,000 — thus the Presidential pay is a loss if Obama where in the top 10% of his class.
- Note the bottom 10% of Harvard Law Graduates from ~1991 earn less than $65,000 — a pay far below the Presidential Pay and even the Congressional Pay Levels.
For reference, Census data gives a similar “winner” perspective:
- According to the U.S. Census Bureau’s 2009 Current Population Survey (CPS), the median earnings for those (all races and genders) who hold at least a bachelor’s degree, are between the ages of 55-64 (median age of Congress and the Cabinet), and work full-time, year-round is $66,800.
- The range is from $57,000 for a bachelor’s degree holder to $117,000 for a professional degree holder (e.g. MD, JD, etc.), which is far below the pay level of Congress and Cabinet Members

Do you wonder whether you are a salary winner in your job? When you want powerful salary data and comparisons customized for your exact position or job offer, be sure to build a complete profile by taking PayScale’s full salary survey.

Regards,

Katie Bardaro
Research Analyst, PayScale, Inc.