Inflation is leading to financial hardships for many. In fact, according to studies, nearly two-thirds of Americans are living paycheck to paycheck. But not those on Wall Street.
Wall Street bonuses rose to a record $257,500 per worker in 2021, according to New York’s fiscal chief, State Comptroller Thomas DiNapoli. The average bonus paid to securities industry employees in New York climbed 20 percent. Compare this to compensation for 2020, when bonuses rose 7.7 percent at $213,700.
The projection was released on March 23 in the annual report from DiNapoli’s office. The bonuses include cash bonuses for 2021 work as well as deferred awards paid out recently.
The higher bonuses figures resulted from Wall Street firms such as Goldman Sachs and JPMorgan Chase posting higher-than-expected revenue increases in January.
Major mergers, public listings, and solid trading activity were behind the revenue boost, CNBC reported.
“Markets are turbulent as other sectors’ recovery remains sluggish and uneven, and Russia wages an inexcusable war on Ukraine’s freedom,” DiNapoli said in his report. “In New York, we won’t get back to our pre-Covid economic strength until more New Yorkers and more sectors — retail, tourism, construction, the arts, and others — enjoy similar success.”
Many American workers will still not earn six-figure incomes — let alone a six-figure bonus. Nearly 52 million workers (or almost one-third) make less than $15 an hour, according to a just-released study by Oxfam America. These workers have an annual income of less than $31,200 and are disproportionately women and people of color, CNN reported. Black women are disproportionately represented in the segment of workers earning less than $15 an hour.
Wall Street revenues and employees are vital to NYC’s economy. DiNapoli said that securities industry jobs make up just 5 percent of private-sector roles but accounted for 18 percent, or $14.9 billion, of state tax collections in the 2021 fiscal year.
The salaries of Wall Street employees account for one-fifth of the city’s private-sector wages, so high bonuses are also good news for NYC’s tax coffers, CNN reported.
Wall Street staffers earn nearly five times the $92,315 average salary in the private sector, excluding finance, according to DiNapoli’s report. There were 180,000 workers in New York’s securities industry in 2021.
While New York City remains the country’s financial seat, it has lost some of its share of finance jobs to Florida, Texas, and other low-tax states.