A new report finds that bonuses for Wall Street employees skyrocketed in 2021 to the highest levels since the Great Recession, while worker pay has remained stagnant.
In an analysis of New York State Comptroller data, the Institute for Policy Studies found that the average bonus for Wall Street employees rose to $257,500 in 2021 – or roughly five times the average salary for U.S. workers. This is an increase of 20 percent from 2020; meanwhile, the average American only saw wage raises of 2 percent in 2021, which is far less than the inflation rate of 7 percent.
These bonuses represent a huge increase over previous decades; the average bonus for Wall Street employees has increased by a whopping 1,743 percent since 1985, when the average bonus was $13,970. If minimum wage had kept up with Wall Street bonuses, it would be $61.75 an hour, or 8.5 times higher than the current minimum wage of $7.25.
“Millions of low-wage essential workers are struggling to make ends meet while taking care of our country’s basic human needs. Meanwhile, Wall Streeters are getting massively rewarded for high-risk behaviors that endanger the entire economy,” report author Sarah Anderson told Truthout. “Fourteen years after the financial crash, we still have no meaningful controls on the reckless Wall Street bonus culture.”
Anderson also noted that although the Dodd-Frank Act called for measures to reform Wall Street, like restrictions on Wall Street bonuses, regulators have failed to enact such guidelines — even though they were supposed to be put in place by 2011.
“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,” Anderson wrote.
Wall Street lobbyists have been fighting against the enactment of Dodd-Frank reforms for years after the law was passed, effectively defanging the legislation. By the time Trump took office, any attempts to implement the ruling to limit Wall Street bonuses were dead.
While the recession-inspired guidelines have fallen flat, the minimum wage has remained stagnant since 2009. Not only is $7.25 an hour insufficient to survive nearly anywhere in the U.S., it’s also considered poverty wages in many places. With each year that goes by, that wage is worth less; with inflation, $7.25 in today’s dollars is equivalent to only $5.50 in 2009 dollars.
“These two failures speak volumes about who has influence in Washington – and who does not,” Anderson said in the report.
In total, 180,000 New York-based Wall Street employees made $45 billion just in bonuses last year. This is enough to fund over 1 million jobs with a $15 wage, the report finds.
In response to the report, progressives have condemned Wall Street figures for their greed. “The average Wall Street bonus in 2021 increased by 20 percent – up to a staggering $257,000. Meanwhile real weekly earnings for workers declined,” wrote Rep. Ilhan Omar (D-Minnesota) on Twitter. “The problem isn’t scarcity; it’s corporate greed.”