The $26.7 billion spent on Wall Street bonuses last year was greater than the entire 2012 income of America’s full-time minimum wage workforce, according to a new report from the progressive Institute for Policy Studies.
Had that $26.7 billion instead gone to increased wages for the country’s 1,085,000 full-time minimum wage workers, writes report author Sarah Anderson, those workers’ wages ($15.1 billion total in 2012) would have more than doubled. Anderson estimates that such a raise for minimum wage workers would have done much more than bank bonuses to spur economic growth: In contrast to a $10.4 billion multiplier effect from the payouts to bankers, she calculates a $32.3 billion multiplier if the cash had gone into the pockets of those now making $7.25.
Anderson based her calculations on bonus data released this week by the New York State comptroller’s office, and data on 2012 wages from the Bureau of Labor Statistics. The million workers she counted include only those working 35 hours a week and making no more than $7.25, not those working at near-minimum wages, or those who have been seeking but not securing full-time hours.
“Huge bonuses, we learned from the 2008 financial industry meltdown, create an incentive for high-risk behaviors that endanger the entire economy,” Anderson writes. In contrast, she argues, low-wage jobs “provide real services. They deserve much higher minimal rewards.”
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