Last week, the New York State Comptroller released new data on how much money Wall Street banks doled out in bonuses in 2014. The story is all too familiar: a select, and already wealthy, few raked in a combined $28.5 billion in bonuses last year. Sarah Anderson of the Institute for Policy Studies placed this figure in juxtaposition to the paychecks of minimum wage workers. Her exercise highlights, in a very direct way, the growing problem of income inequality in America.
Anderson estimated that the combined income of full-time workers earning the federal minimum wage of $7.25 an hour is $14 billion. In other words, Wall Street bonuses amounted to twice the annual earnings of more than 1 million full-time minimum wage workers in America. While one may quibble over the most accurate way to estimate the combined earnings of minimum wage earnings, “the broad picture doesn’t change,” notes economist Justin Wolfers.
While this stark 2:1 ratio is telling enough, consider for a moment the pocketbook to pocketbook comparison. There were 167,800 people who worked on Wall Street this past year, suggesting that the lump $28.5 billion in bonuses averages out to about $170,000 per person. Now consider the fact that the annual salary of a full-time worker earning the federal minimum wage is around $15,080. This means that the average bonus of a person working on Wall Street was 11 times what a minimum wage worker makes all year.
If numbers speak for themselves, then together these data points scream of an epidemic in America: far too many workers are earning far too little. It’s time to #RaiseTheWage.
Patrick Oakford is a policy advisor in the department’s Office of the Chief Economist.