2014 Wall Street Bonuses Are Twice the Total Earnings of All Minimum Wage Workers
The $28.5 billion that Wall Street investment banks and other financiers handed out to their 167,800 workers last year is a total double that of all U.S. workers who made exactly the $7.25 hourly federal minimum wage, a new report says.
Sarah Anderson, author of The Wall Street Bonus Pool and Low-Wage Workers, says the report again shows the U.S. needs more curbs on executive excess. The Institute for Policy Studies sponsored her report.
Anderson found 1.007 million U.S. workers, according to federal calculations, made exactly the minimum wage last year. Their earnings, based on a 35-hour workweek, totaled $14 billion. The Wall Street bonuses of $28 billion, she noted, were on top of their salaries. The Wall Street figures come from the New York State Comptroller’s office.
“Wall Street’s bonus culture, we learned from the 2008 financial industry meltdown, creates an incentive for high-risk behaviors that endanger the entire economy. A large share of low-wage earners, on the other hand, spend every workday meeting basic human needs, such as providing food services and taking care of the disabled and elderly,” Anderson wrote.
“The bonus pool is so large it would be far more than enough to lift all 2.9 million restaurant servers and bartenders, all 1.5 million home health and personal care aides, or all 2.2 million fast food preparation and serving workers up to $15 per hour,” the objective of a current campaign by low-wage workers nationwide.
The fast food workers now earn an average of $8.69 hourly, BLS data show. The 2.4 million servers earn $10.04, while the half a million bartenders earn $10.46. They work an average of 25 hours a week. The 807,000 home health care workers earn an average of $10.60, while the 735,000 personal care workers earn $9.71 hourly, the Health and Human Services Department reports. Those workers toil an average of 31 hours per week.
One reason the bonuses have resumed skyrocketing is that federal regulators are “dragging their feet” on writing rules limiting the payouts, as mandated by the Dodd-Frank financial reform law lawmakers pushed through after the Great Recession hit. The financiers have been furiously lobbying against any such rules.
“Regulators have still not implemented Section 956 of that law, which prohibits financial industry pay packages that encourage ‘inappropriate risks,’” Anderson reports. “ The proposal regulators released in 2011 ignores key lessons from the last half-dozen years of financial scandals. It would only apply pay restrictions to top executives, leaving off the hook traders and other employees whose activities could put the financial system at risk.
“The only specific pay restriction relates to the timing of bonuses. Bankers would have to wait three years to collect half of their annual bonuses, which doesn’t amount to much of a disincentive to short-term recklessness” – the recklessness that led to the recession in the first place.
