Benchmarking Minister's pay against other high salaried professionals

Real World Economics Applied: Become a Minister, Anyone?

GovernorReal World Applications Leave a Comment

Let’s consider applying the concept of Opportunity Cost. A few days ago, I was asked if I had ever considered becoming a politician. On the same day, ESM Goh expressed that Ministers are not paid enough and it would be harder to recruit people for Government in the future. “Was ESM answering on my behalf?”, I wondered! “Could I and Should I become a Minister?”

In that same article published in the Straits Times, I was horrified to find out that a Senior Minister of State only earned about S$500,000. (Equally horrifying…that others earned S$5-10mil a year!). In economics, we learn about having to consider opportunity costs. Mr Edwin Tong, now Senior MOS, had to forego an annual salary of S$2 mil. This could be considered an economically irrational decision, as it has led him to experience an economic loss. (So some may rub it in, and say that we have dumbasses in the Government!)

Obviously, there are benefits and reasons that he has considered that cannot be quantified in monetary terms. And obviously, one should hope that we do not have calculative mercenaries “serving” in the Government. We should be much more than just self-serving machines.

However, the gap in salary is indeed quite shocking and disturbing. In reality, the opportunity costs go beyond foregone salaries. The loss of privacy and the long, round the clock and across the week hours (at least what it seems in Singapore) also need to be factored in.

Hence, I do think ESM’s points are highly valid. Will we end up with lower calibre Ministers? Or perhaps power-hungry, fame-thirsty ones who may find other ways to line their pockets? When motives/desires/objectives are wrong, we as a country will be in for big trouble. But paying our Ministers much more does not guarantee that we will be recruiting those with the right motives either….The debate over our Ministers’ pay rages on…

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