A weekly newsletter from the Institute for Policy Studies |
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“Wall Street Bonuses Fall by Most Since 2008,” proclaimed a Wall Street Journal headline last week. “The Average Wall Street Bonus Fell by 26% Last Year,” lamented CNN.
Those headlines don’t tell the full story. Yes, Wall Street bonuses did fall some 26 percent in 2022 after reaching a historic high in 2021. But focusing on that one-year decline ignores the continuing reality of our burgeoning economic divide.
Since 1985, the average Wall Street bonus has soared 1,165 percent. If the minimum wage had increased at that same rate, our Inequality.org co-editor Sarah Anderson points out, our nation’s lowest-paid workers would now be making $42.37 an hour. Instead, the federal minimum wage remains at $7.25.
To imagine what all that Wall Street bonus money could accomplish if reinvested elsewhere, our Inequality.org team crunched the numbers. We found that the total bonus pool for 190,800 New York City-based Wall Street employees — $33.7 billion — could pay for 771,520 jobs that pay $15 per hour with benefits for a year.
So what can be done to rein in Wall Street’s bonus culture? Sarah Anderson has the scoop on bold solutions below. Also in this issue: a first-hand report on the long-awaited Senate hearing on union-busting at Starbucks that includes a barista response to the testimony of long-time Starbucks chief Howard Schultz.
You may notice our newsletter looks a bit different this week. We recently went through a redesign process to spruce things up and make our Inequality.org easier to read, especially on mobile and tablet devices. Hope you enjoy the new look — and please do consider forwarding this issue to friends and encouraging them to subscribe. Thanks so much!
Chuck Collins and Rebekah Entralgo,
for the Institute for Policy Studies' Inequality.org team |
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| INEQUALITY BY THE NUMBERS |
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Starbucks Workers Give Billionaire Howard Schultz a Roasting
Outgoing Starbucks CEO Howard Schultz finally appeared before Congress last week for a much-anticipated Senate hearing on the company’s illegal union-busting tactics. Throughout the hearing, Schultz repeatedly denied any wrongdoing, totally ignoring rulings from the National Labor Relations Board — the independent federal agency that protects the right to organize — that his national coffee chain has violated federal labor law some 1,300 times. Those violations include illegally monitoring and firing organizers, withholding benefits from unionized stores, and closing a store that attempted to organize.
Gianna Reeve — a 22-year-old shift supervisor at a unionized Starbucks store in Buffalo, New York — confronted Schultz after the hearing and asked him to sign the union’s Fair Election Principles and commit his company to not retaliating against workers organizing to fight for fair contracts. The Schultz reaction? He ignored her and walked away.
Reeve, in an interview after the hearing with Inequality.org’s Rebekah Entralgo, called the Schultz testimony and his company’s years of union-busting activities utterly “deplorable.”
“It’s even more frustrating,” she added, “to hear Schultz feign unawareness about the labor law that deems those activities illegal.” |
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Lawmakers in Washington Must Stand Up to Wall Street! If the federal minimum wage had increased at the same rate as Wall Street bonuses since 1985, that minimum would be well over five-times higher today.
What explains the disparity? The power of big corporations and Wall Street. For more than a dozen years, their lobbyists have blocked both a federal minimum wage hike and banker bonus restrictions. The inaction on these two fronts speaks volumes about who has influence in Washington — and who does not.
In her annual bonus data analysis, Inequality.org co-editor Sarah Anderson has more eye-popping figures — and promising solutions to protect working families from Wall Street greed. |
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This week on Inequality.org
Sarah Anderson and Jasmine Corazon, Where are the Women CEOs? Should We Care? Women CEOs are becoming slightly less rare at large corporations. But simply replacing men with women at the top of the income scale won't lead to greater equity.
Dr. Sarrah Kassem, Pushing Back Against Platform Giants: Labor Power and Solidarity at Amazon. As online platforms have become giants over the course of recent years, accumulating immense wealth in the process, workers across platforms worldwide have been pushing for a better, fairer working world.
Elsewhere on the Web
Nicholas Agar, Why we enjoy the excruciating miseries of the super-rich, Newsroom. The popularity of TV series about unhappy rich people says more about our need, in a world of rising wealth inequality, to view them that way than it does about how they experience their lives.
Anna Papadopoulos, Countries With The Most Billionaires, 2023, CEO World. The top ten U.S. billionaires alone have a combined net worth of over $1 trillion, more than many countries’ total GDP.
Kate Wagner, You Can’t Even Tell Who’s Rich Anymore, The Nation. Billionaires dress like the guy next door, a trend that elides the reality of our ever-worsening inequality.
Lawrence Delevingne, How First Republic's courtship of the wealthy led to meltdown, Reuters. First Republic for years lured high net-worth customers with preferential rates on mortgages and loans. This strategy made it more vulnerable than regional lenders with less-affluent customers since U.S. deposit insurance only guarantees $250,000 per savings account.
Stewart Lansley, Why economic growth alone will not make British society fairer or more equal, The Conversation. Large corporations have become cash cows for their owners and top executives.
Jake Johnson, Senate Dems Blast Medicare Advantage Giants Over 'Exorbitant' CEO Pay, Common Dreams. Execs at for-profit insurance industry of attempting to scare seniors and people with disabilities into opposing changes that will reduce waste, fraud, and abuse in Medicare Advantage.
Matthew Cunningham-Cook, In Chicago Mayoral Race, Plutocrats Spend Big Against New Taxes, The Lever. Paul Vallas has raked in $1.6 million from executives at financial firms that could be hit by his progressive opponent’s proposed tax on speculative trades.
Binoo K John, How India trumpets its super rich and throws a blanket over the starving masses, The Federal. India, the fifth largest economy in the world, has become a paradise for the super-rich.
Oliver Povey, How much do billionaires pay in taxes in the US? AS. A White House analysis suggests that the wealthiest 400 U.S. billionaire families pay an average tax of just 8.2 percent of their incomes. Average taxpayers have a starting tax rate of 10 percent. |
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In 2022, the average Wall Street bonus hit $176,700, up 75 percent since the 2008 crash. By contrast, average wages for all U.S. private sector workers increased by only 54 percent during this period. For manufacturing and construction workers, the increase dropped even lower. |
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Inequality.org | www.inequality.org | inequality@ips-dc.org
Managing Editor: Rebekah Entralgo
Co-Editors: Sarah Anderson, Chuck Collins, Bella DeVaan, and Sam Pizzigati
Production: Bella DeVaan |
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