Reporting in Spring 2022 by Inequality.org, Reuters, and Common Dreams has revealed that the average bonus for those working in New York City’s securities industry––in other words, on Wall Street––rose 1743 percent between 1985 and 2021. The number is likely higher in 2023. Had the minimum wage increased at the same rate as Wall Street bonuses, it would now be $61.75 per hour.
In 2021 alone, Wall Street bonuses rose twenty percent, far outpacing inflation at seven percent, and nominal private sector earnings at 4.2 percent. That year Wall Street bonuses, in aggregate, amounted to $45 billion, much higher than the $37.1 billion in bonuses paid out in 2020, even as employment in the sector remained essentially flat at about 180,000 workers. It’s important to note that while only five percent of New Yorkers who work in the private sector work in securities, these workers make twenty percent of all private sector earnings in New York City. The bonuses paid out in 2021 are the highest since 2006, which is likely fueled by banking industry lobbyists successfully delaying the implementation of Section 956 of the Dodd-Frank Act. This legislation prevents large financial institutions from awarding pay packages which encourage “inappropriate risk.”
These growing bonuses further racial and gender inequality, as the financial industry is overwhelmingly White and male. Seventy-five percent of Goldman Sachs’ senior executives and top managers are male, as are 74 percent at JPMorgan Chase and Morgan Stanley, and 64 percent at Bank of America, and Citigroup. These institutions are disproportionately White as well— just three percent of Goldman Sachs’ senior executives and top managers are Black, with similarly low figures for JPMorgan Chase (5%), Morgan Stanley (3%), Bank of America (5%), and Citigroup (4%).
Corporate coverage of this story has been scant. The New York Post published coverage, and CNN Business featured a non-comprehensive story, which noted, “high bonuses are also good news for Gotham’s tax coffers.”
Jake Johnson, “‘Jaw-Dropping’: Wall Street Bonuses Have Soared 1,743% Since 1985,” Common Dreams, March 23, 2022.
Sarah Anderson, “Wall Street Bonuses Soar By 20%, Nearly 5 Times the Increase in US Average Weekly Earnings,” Inequality.org, March 23, 2022.
Noor Zanzibar Hussein, “Wall Street Hands Out Biggest Bonuses Since 2006,” Reuters, March 23, 2022.
Student Researcher: Annie Koruga (Ohlone College)
Faculty Evaluator: Robin Takahashi (Ohlone College)