Reuters reports that “The average bonus on Wall Street jumped 15 percent last year to the highest level since the 2008 financial crisis and was the third largest on record, New York State’s budget watchdog said on Wednesday.
“The cash bonus pool swelled to $26.7 billion in 2013, pushing the average cash bonus to $164,530, a post-2008 high in a industry shrunk by the financial crisis, according to the New York state comptroller’s annual estimate.”
SARAH ANDERSON, sarah at ips-dc.org; also via Elaine de Leon, elaine at ips-dc.org
Anderson is the director of the Global Economy Project at the Institute for Policy Studies. She said today: “The $26.7 billion Wall Street employees pocketed in bonuses in 2013 would cover the cost of more than doubling the paychecks for all of the 1,085,000 Americans who work full-time at the current federal minimum wage. And boosting their pay would give our economy much more bang for the buck. That’s because low-wage workers tend to spend nearly every dollar they make to meet basic needs, while the wealthy can afford to squirrel away a much greater share of their earnings. According to a new Institute for Policy Studies report, if the $26.7 billion in Wall Street bonuses had instead gone to minimum wage workers, our economy would be expected to grow by about $32.3 billion — more than triple the $10.4 billion boost expected from the Wall Street bonuses.
“This immense GDP differential only speaks to one price we pay for Wall Street’s bonus reward culture. Huge bonuses, the 2008 financial industry meltdown made clear, create an incentive for high-risk behaviors that endanger the entire economy. Low-wage workers — the people who harvest, prepare and serve our food, keep our hotels clean, and care for our elderly — all provide crucial services. They deserve much higher rewards.”
BARTLETT NAYLOR, bnaylor at citizen.org
Financial Policy Advocate of Public Citizen’s Congress Watch Division, Naylor said, “In a year when the leading Wall Street firms paid record fines for fraud, the average bonus rose 15 percent, further evidence that accountability apparently doesn’t apply. …
“In an annual report released [Wednesday], the New York State Comptroller found that the average bonus rose to $164,530. That’s the third-highest figure, trailing only the years when bankers fed most voraciously at the mortgage-backed securities trough, a feeding frenzy that led to the crash of 2008.
“Profits in 2013 actually declined at the New York banks, in no small part because of the massive fraud fines paid by numerous mega-banks. JPMorgan Chase led this rogues’ category, capped by a $13 billion payout in November 2013.
“But too few in Washington and Wall Street seem to believe in individual accountability. Federal prosecutors have named no individual responsible for the widespread scams. And now, incongruously, bankers are taking home even bigger bonuses. JPMorgan gave CEO Jamie Dimon a 75 percent raise only months after its latest, record settlement. The message for fraudsters seems to be, ‘carry on.’”