Banker Bonuses Still More Than Twice as High as American Household Incomes
This morning, New York State Comptroller Thomas DiNapoli announced that Wall Street banks paid out nearly $122,000 in bonuses per banker last year, an increase of 9 percent over 2011 — and some 142 percent of the last available median household income recorded in this country. Champagne corks popped throughout New York City's Financial District, but that's just the lunch crowd.
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On the whole, banks paid out 8 percent more than in 2011 for a total of $20 billion. This chart of bonuses paid by banks over time isn't adjusted for inflation, but it shows the banks' pretty good run for the past few decades.
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Data from the New York State Comptroller.
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The increase for individual bankers meant each took home an average of $121,900. Again, this is a bonus, on top of salary. As a reminder, annual household income in 2011 was just over $50,000. The last time bankers took home bonuses that were less than the median household income was 1991.
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Data from the New York State Comptroller, U.S. Census Bureau.
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The reason bankers' bonuses increased more than the pool of bonuses grew is that the sector saw a slight contraction last year. Fewer bankers sharing more money means more money per banker. Over time, the amount bonuses change year-over-year has been much more volatile than the number of bankers. In 1991, that first year that bankers made more in extras than an average American made over the course of the year, bonuses nearly doubled. Employment, however, dropped. In fact, there's a loose inverse correlation between banking employment and bonuses: generally when employment drops, bonuses go up.
Data from the New York State Comptroller, Federal Reserve Bank of St. Louis.
Again, all of that data deals only with bonuses. When you compare combined salary and bonuses for bankers to the national and New York average, the difference becomes much more stark.
Data from the New York State Comptroller, Federal Reserve Bank of St. Louis.
All jealousy and/or continued hatred aside, this is good news for the city and state of New York, right? More salary and bonuses means more tax revenue. Explain away, Comptroller DiNapoli:
Before the start of the financial crisis, business and personal income tax collections from Wall Street related activities accounted for up to 20 percent of New York State tax revenues, but that contribution declined to 14 percent last year. Wall Street’s share of city tax collections has declined from a peak of more than 12 percent to less than 7 percent.
Thanks, bankers. Thanks again.
