There is no question that 2020 was a challenging year for most American families. Due to the pandemic, a record number of people were forced out of the workforce, lost their health care access, went on unemployment, and experienced eviction and food insecurity, and, of course, died. The economy essentially froze to a halt due to the pandemic — and the government did little to help. It was chaotic and challenging for everyone. Except for Wall Street traders, apparently, reveals new data that shows just how much money Wall Street workers made in 2020 — and how much the rest of us would make if we got paid like them.
According to CBS News, the stock market hit new records this past year, bringing in more money than the year before. New York City-based traders weren’t struggling like the rest of the country. Quite the opposite, actually. New York’s comptroller, Thomas DiNapoli, noted that in 2020, Wall Street firms paid out an average bonus of $184,000 – and that’s a 10% increase from 2019.
This isn’t a surprising increase if we look at previous years. Payday for Wall Street has been skyrocketing for decades, according to data from DiNapoli’s office. The bonuses, which are only part of traders’ overall pay, have grown 1,217% since 1985. In total, the average annual earnings for securities professionals, including Wall Street traders, is $406,700, which includes both the salary and annual bonus.
What is surprising, though, is how things stack up if we were to only look at the Wall Street bonuses, which are comparable to an extremely generous full-year salary for an upper-middle-class family, and compare that to the federal minimum wage. The short of it? Extreme wealth disparity.
While the Wall Street bonuses may be skyrocketing, the rest of the wages in the United States are certainly not growing at nearly the same right. In fact, for the past 12 years, the minimum wage has been the same at $7.25 an hour, or $15,080 per year, not raising with the cost of inflation or the cost of living. If that were to be adjusted for inflation since 1985, overall pay for minimum wage has decreased by 11%.
It’s hard to conceptualize what it would mean if regular jobs had the same 1,217% pay growth since 1985, but someone did it anyway. If the same growth trajectory Wall Street followed were to be applied to federal minimum wage, the discrepancy is glaring. People on minimum wage would get at least $44.12 per hour, or $91,769 per year if it had the same growth pattern as Wall Street traders’ bonuses alone. Keep in mind that earning nearly six figures is a healthy middle-class wage — and that the bonus a Wall Street worker gets is more than what many people make over several years of working.
“This whole picture reinforces the total disconnect between Wall Street and the rest of the economy,” Sarah Anderson, IPS’ global economy project director and the author of the analysis said, according to CBS News. “The fact that people on Wall Street saw such a significant jump in a year when so many people are struggling says so much about the disparities of this crisis.”
That is a jaw-dropping difference, really, and a slap in the face.