Wall Street employees saw their typical annual bonus slip by 17 percent last year to $153,700, according to new data from the New York State Comptroller. But don’t feel sorry for the banking set just yet — even including down years like 2018, bankers’ bonuses have jumped by 1,000 percent since 1985.
By comparison, the federal minimum wage has increased about 116 percent during the same period, according to an analysis from the Institute for Policy Studies, a left-leaning research center that used the comptroller’s latest data. If the minimum wage had grown at the same pace as Wall Street bonuses, fast-food workers and other low-wage workers would earn a baseline wage of $33.51 an hour, the group said.
The total Wall Street bonus pool last year was $27.5 billion, or more than triple the combined earnings of the 640,000 U.S. employees who earn the federal minimum wage, which has stood at $7.25 an hour since 2009. More states are boosting their minimum wages in response to criticism that the federal baseline pay isn’t enough to provide a living wage.
At the same time, pay for the top-paid U.S. workers has surged, creating a rich-get-richer phenomenon that some economists say is exacerbating income inequality. The practice of awarding large bonuses to Wall Street executives is also widening the gender and racial pay gaps, since most of the recipients are white and male, IPS noted.
As for why Wall Street bonuses fell in 2018, it’s not because banks were less profitable last year, New York Comptroller Thomas P. DiNapoli said in a statement. In fact, Wall Street recorded an 11 percent increase in pretax profits for the broker-dealer operations of New York Stock Exchange member firms, which the comptroller said is the traditional yardstick for securities industry profits.
Instead, many banks paid out higher bonus amounts in 2017 because of changes in the federal tax code that encouraged them to pay more that year, according to a statement from the comptroller.
“The acceleration of payments into 2017 could have contributed to the decline in 2018,” the statement noted.
The bonuses are on top of average salary of $422,500 in 2017, the latest data available for Wall Street salaries, it added.
Source: CBS News