Increasing Wall Street Bonuses, Decreasing Main Street Wages

Monday, April 12, 2010, 7:08 AM | Leave Comment

The Washington-based Bureau of National Affairs (BNA) has kept track of and published reports about the wage-trend in the form of an indicator affecting the workers in America. It is known as Wage Trend Indicator™ (WTI).

The most recent published indicator shows that WTI fell to 97.14 during the first quarter of 2010. It’s down from 97.42 in the last quarter of 2009.

BNA has been keeping a record of WTI since its inception in 1976 when it was set to a benchmark of 100.

So what is WTI actually telling us?

When WTI was set to a benchmark of 100 more than 30 years ago and now it has gradually fallen to 97.14, for a comparable position, anyone making $100 at the time is making $97.14. So instead of increasing over 30-year period, the net effect is that it has decreased by 2.86 percent.

How does that compare with Wall Street bonuses?

Let’s look at the bonuses our so-called leaders and executives received or scheduled to receive.

  • American Express, which converted into a bank to receive bailout money in 2008, paid its chief $17.4 million for 2009, according to Reuters.
  • Deutsche Bank USA paid its CEO, Josef Ackermann, $13.1 million for 2009, the bank said in its annual report filed Tuesday, according to Bloomberg.
  • As if once a year was not enough, some retail companies are starting to pay bonuses two times a year, The Wall Street Journal reports.
  • The American International Group will pay about $46 million in retention bonuses.
  • $21 million for John Stumpf, the chief executive of Wells Fargo, the Wall Street Journal reports.
  • HSBC announced earnings on recently and along the way, its executives made sure to say that they are underpaid, The New York Times reports. The story says that HSBC’s chairman said the bank’s chief executive was not being paid enough. And then the CEO said that the head of the HSBC’s investment bank could get paid more elsewhere. [blackmail?]

In a Nutshell
Now you might think that the decrease is not that much. But if you are making $50,000 it comes down to a good chunk of money. As the time progresses in an individual life as well as in a nation’s life, the standard of living should increase, not decrease, in terms of wages as WTI indicates.

According to New York Times, Wall Street is an industry that is all about money. So it is logical that the workers there would be highly focused on the amount of money that they are paid.

What do you think?

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