In number, the ratio of Wall Street bank employees to full-time minimum wage workers is 1:6. What that smaller group made last year in bonuses alone, though, was more than twice the total earnings of the many more Americans who remain stuck in the income basement.
Says the Institute for Policy Studies in its “Off the Deep End” report, released on March 11:
The $28.5 billion in bonuses doled out to Wall Street employees is double the annual pay for all 1,007,000 Americans who work full-time at the current federal minimum wage of $7.25 per hour.
It’s not like these Wall Street jockeys had done some fabulous job to merit so much in bonus wages, IPS notes. That $28.5 billion in bonus bucks – a three percent increase from the previous year – was given despite a 4.5-percent drop in annual industry profits. And how much has minimum wage increased? Not one cent since hitting $7.25 per hour in July 2009.
However, the impact of a $15/hour minimum wage – the rate requested by many labor and social groups through national demonstrations over the past two years – would have far more prominent effect on the U.S. economy overall, IPS concludes.
Based on standard fiscal multipliers established by Moody’s Analytics, every extra dollar going into the pockets of a high-income American only adds about $0.39 to the GDP. By contrast, every extra dollar going into the pockets of low-wage workers adds about $1.21 to the national economy. […] If the $28.5 billion Wall Streeters pulled in on bonuses in 2014 had gone to minimum wage workers instead, our GDP would have grown by about $34.5 billion, over triple the $11.1 billion boost expected from the Wall Street bonuses.
IPS’ study only compared income and impact of those making the national rate of $7.25, and did not include those in cities and states that have higher minimum wage rates.