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A new analysis out Wednesday estimates that if the federal minimum wage had grown at the same rate as Wall Street bonuses over the past three and a half decades, it would currently be $61.75 an hour instead of $7.25.
According to fresh data from the New York State Comptroller, the average bonus dished out to Wall Street employees jumped 20% to a record $257,500 in 2021 as big banks reported huge profits despite widespread havoc caused by the COVID pandemic.
Last year’s average Wall Street bonus was the highest since 2006, prior to the Great Recession.
The comptroller’s office points out that while the securities industry comprises just 5% of private-sector employment in New York City, it makes up one-fifth of total private-sector wages.
Taking the new figures into account, Sarah Anderson of the Institute for Policy Studies notes in a report that the average Wall Street bonus has soared by 1,743% since 1985.
“By contrast, typical American workers lost earnings power in 2021,” Anderson writes, noting that high inflation has eroded the modest wage gains seen by ordinary people.
“Average weekly earnings for all U.S. private-sector employees rose by only 2% between January 2021 and January 2022, according to the Bureau of Labor Statistics.”
“These jaw-dropping numbers are just the latest evidence of unequal sacrifice under the pandemic,” Anderson adds. “While ordinary workers are struggling with rising costs for basic essentials, Wall Street bankers have seen their bonuses rise further into the stratosphere.”
Anderson argues that Wall Street bonuses have been soaring in recent years partly because Section 956 of the Dodd-Frank Act — a financial reform measure enacted in the wake of the 2008 crash — has never been implemented.
“Powerful Wall Street lobbyists have succeeded in blocking Section 956… which prohibits large financial institutions from awarding pay packages that encourage ‘inappropriate risks,'” Anderson writes.
“Regulators were supposed to implement this new rule within nine months of the law’s passage but have dragged their feet — despite widespread recognition that these bonuses encouraged the high-risk behaviors that led to the 2008 financial crisis, costing millions of Americans their homes and livelihoods.”
“In contrast to the Wall Street lobbyists, advocates for the working poor have seen their efforts to raise the federal minimum wage and secure other important worker benefits stalled in Congress,” she continues.
“Due to Washington inaction, millions of essential workers continue to earn poverty wages, while the reckless bonus culture is alive and well on Wall Street.”
Originally published in Common Dreams.
