Wall Street bonuses totaled $28.5 billion in 2014 —double the combined annual earnings of the more than 1 million American full-time minimum wage workers, according to an Institute for Policy Studies analysis of New York State Comptroller bonus figures released today.
Wall Street bonuses rose 3 percent last year, despite a 4.5 percent decline in industry profits. The size of the bonus pool was 27 percent higher than in 2009, the last time Congress increased the minimum wage.
The 2014 bonus pool is so large it far exceeds the amounts needed to lift the wages of 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.
IPS also calculated how much more of a national economic boost would be gained if a similar sum were funneled into the pockets of minimum wage workers. If the $28.5 billion had gone to minimum wage workers who need to spend nearly every dollar they make, the U.S. GDP would be expected to grow by about $34 billion, more than triple the $11 billion boost expected from the Wall Street bonuses.
“It’s too early to tell whether last year’s bonuses were based on high-risk gambles that could blow up our economy again,” said report author Sarah Anderson. “But the flourishing of the Wall Street bonus culture while worker wages are stagnating is clearly a sign of perverse priorities in Washington.”
Anderson, who directs the Institute’s Global Economy Project, noted that regulators have failed to implement even the modest Wall Street pay reforms in the 2010 Dodd-Frank legislation. Anderson is a veteran executive compensation analyst, having co-authored 21 annual IPS Executive Excess reports.
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