Wall Street investment banks are infamous for the hefty bonuses they often dole out. In fact, in 2018, the bonus pool for the 181,300 security industry employees who work in New York City was $27.5 billion, according to the Office of the New York State Comptroller.
If that sounds like a lot, it is: That amount is more than three times the combined annual earnings of all 640,000 U.S. workers employed full time at the federal minimum wage, according to a new analysis from Inequality.org, a project of the progressive think tank the Institute for Policy Studies.
The average 2018 bonus for securities industry employees is $153,700, according to the report. The federal minimum wage is $7.25 an hour, which would be $15,080 a year, based on a 40-hour work week.
The report points out that while the average Wall Street bonus has increased 1,000 percent since 1985, the federal minimum wage has only increased 116 percent (not accounting for inflation). If the federal minimum wage had risen at that same rate as bonuses, it would now be $33.51. (Many states, counties and cities have enacted minimum wages that are higher than the federal level, but none as high as $33).
While the average 2018 bonus for securities industry employees fell 17 percent from 2017, over the past few decades, the trend has been upward: In 1989, the average bonus was $13,300, in 1999 it was $75,000 and in 2009 it was $140,600, according to the New York state comptroller.
As The Wall Street Journal points out, a $153,700 average bonus is also about twice the average annual salary of private sector workers in 2017, which was $77,100. (The average 2017 Wall Street salary with bonuses was $442,500 in 2017.)
Citing Bureau of Labor Statistics data, the Inequality.org report also notes that employees in the financial sector are overwhelmingly male and white, while workers at the end of the wage scale are predominantly women and people of color.
Wealth inequality is a hot topic of conversation, with billionaires Warren Buffett and Bill Gates weighing in on the subject. The three richest people in the world — Amazon founder Jeff Bezos, Buffett and Gates — have more wealth than half the population of the U.S., according to a November 2017 report from the Institute for Policy Studies.
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