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Congrats to Wall Street, where the average bonus is three times the average household income
"The $172,860 figure may not be a recent peak, but it is still more than three times the median household income in America. And that's just the bonus — not the salaries these Wall Street workers earn."
i would think these numbers are skewed by a few hundreds who make millions and the rest has a modest payout. not only the populist piece is scrapping the lowest of the low and reveals more about the author, but some of the commenters don't seem to have a grasp on what is traditionally called the wall street.
first about $172K buying a median house.. if you're indeed on wall street, why do you want a house in the pittsburgh suburb (or further out)?
as for the "wall street", traditionally, it is represented by investment banks (in my mind), which provide advice to corporations with respect to capital raising. in order to build a plant for example, a manufacturer needs access to capital - an investment banking team would then see whether, provided company's structure, business model, etc, it is cheaper to issue equity or debt, or place the offering privately, or finance it by spinning off or selling a non-core business -- and they scour the potential investors among institutional money managers (mutual /pension/ hedge/ sovereign plans) for indicative interest. when they pull a deal, they get paid a percentage, which will result in high bonuses to the top dealmakers. Also, the sales and trading group would generate investment ideas and handle order flow... those who cover big sophisticated clients by providing value, will also get a decent bonus.
there are other financial services of course, including retail banking, small business lending, asset management, portfolio accounting, etc. - often part of the same financial institutions - which doesn't come near bonuses like that, except for individual portfolio managers who make money for clients.
i personally don't think that many entertainers provide adequate services to justify their multimillion dollar contracts, but that's just me.
the populism, as strongly promoted by this president, apparently has taken a strong hold among the society -- including this board - unfortunately.
Here's the thing: I don't love that this happens, but: if this is happening it's because it can. These firms are raking in that degree of money. Fundalarm goes into good detail above.
The fact that you have a government who caters to every whim of the banks probably helps matters. I'm not going to get political, but boy this administration really has bent over backwards for the banks. No one ever gets in trouble, money is cheap and any problems are met with a slap on the wrist seemingly not because regulators have to, but because they have to put on a show like they give a crap. Hint: they don't.
Heathcare gets more and more expensive seemingly every day and will likely be something like 20% of the economy within the next 5 years. No one seems to be in any hurry to figure a solution for that, either. Having everyone get insurance does not exactly seem to have solved the problem of soaring costs, now just more people wind up facing soaring costs.
College costs will continue to rake in money and raise tuition because pretty much anyone can get a loan until the situation becomes unsustainable (and has a significant enough negative effect on the economy from the increasingly huge overhang of student debt).
I know of a few colleges who thought they were in the real estate business in 2007. You will get a bust in colleges and one closing the other day (http://www.businessinsider.com/sweet-briar-college-closing-2015-3) is probably the first of many. Tuition cost increases are unsustainable and a solution has to be made beyond just forgiving student debt. I think there will probably be a point where shorting the student housing REITs is not a bad idea.
I don't like a lot of things I see in the world/economy, but you deal with the world you're given/are in and I think the other thing is that focus on yourself because these things are not going to change any time soon. Our priorities in this country are out of whack and it hasn't gotten any better.
Industries will continue to lobby and continue to get what they want - until they don't, but tell me when that happens because it's only gotten worse in the last 10 years.
"...Industries will continue to lobby and continue to get what they want - until they don't, but tell me when that happens because it's only gotten worse in the last 10 years...." Agreed, but the time frame ought to be spread back decades, maybe a generation or two or three?
@Old_Joe: As long as someone makes his/her money honestly, more power to them. Take a look at what you fund manager is making, I'll bet its three times what the average MFO Member makes, and I don't hear any bitching. Old_Joe you are right, this is nothing more than a Godless left-wing commie equal distribution of the wealth plot on Wall St. I think we should turn the bull in front of the NYSE loose on them. Regards, Ted
Comments are too funny. The distribution isn't known, but I would bet that just under $29B over ~170k people is not all that badly skewed with lots of $4k bonuses along one long tail. Knowing medians might be helpful.
This is atop ~$400k salary, plus options, whatnot. Not seeing what's unfortunate about populist alarm. Good grief. You'd think someone's livelihood was being threatened.
I'm thinking that "left-wing commies" is probably a little dated and "populist" is the new and improved replacement. "Populist moron" will likely become the default phrase from our right-wing brethren before long. World without end, Amen!
It is easy to put down on these bonuses as the vast majority of American workers don't even get a bonus. However, the workers deserve what they earn in a industry that can go from boom to bust in quick time.
Keep telling yourselves value is efficiently rewarded but come the revolution that racist capitalist's mansion is going to be this "left wing commie's" (populist's) home sweet home. And so goes the true nature of the beast that is mankind.
Well, Old Joe knows how to nudge the hornets nest into activity. Thanks Old Joe.
Indeed, the wealth distribution gap between the rich and the poor has expanded over time. This outcome is not entirely surprising. It is an expected outcome from our mostly free capitalistic economic system.
For over 1500 years of incompletely recorded history, the well being of mankind did not substantially improve. Using a modern measure, the GDP per person statistic was roughly constant at a very low level.
Then came the Agricultural revolution which almost immediately freed manpower for the subsequent Industrial revolution. These revolutions were made possible by application of scientific discoveries. By 1776, these dramatic changes were chronicled and analyzed in Adam Smith’s “The Wealth of Nations”. Our GDP per person measuring yardstick has, with just a few temporary exceptions, been mostly rising ever since those faithful events.
The Brits and Europe adopted various forms of the capitalistic concept. Soon, the USA and other New World nations followed with even more success. The rest is history. But the competitive capitalistic system produces both winners and losers; it’s the nature of the beast.
Adam Smith was sensitive to these disparate outcomes, and it did concern him. Here is one of his many quotes on these anticipated disparities: “No society can surely be flourishing and happy of which by far the greater part of the numbers are poor and miserable. ” Smith expected a wealth gap and he was not disappointed.
Like all world shaping happenings, some bad is intertwined with the good. Child labor, overworked women, squalid working conditions, and filthy, unhealthy city living conditions were the order of the day during the initial phases of the Industrial revolution. That has changed for the better for both the Winners and the Losers exposed to the system.
Although the system Losers still get a small cut of the pie, the pie itself is so much bigger now that even a small slice is more rewarding than in yesteryears.
Do I like the current huge disparities in pay scales? No! But it is an embedded part of our capitalistic system.
Would I choose to abandon the system? Absolutely not. As imperfect as it is, real world experimental evidence demonstrates that it is the superior economic system. Supply and demand works to establish a reasonably fair equilibrium.
You and I might not like the outcomes, but supply and demand works its magic. Company managers, movie stars, professional athletes, and money mangers are being paid what the marketplace has experimentally determined is the required wage for market equilibrium. Morality issues do not enter this equation.
I may not be a totally happy warrior, but I’m satisfied that the marketplace has had its controlling final say.
In some ways I wish I had become a money manager; on second thoughts, I reject that idea. I’m happy with my selected work field; I was always free to choose. I chose wisely. I hope you chose wisely too.
Hello, MJG. "....Morality issues do not enter this equation." Yes, correct. Markets have no conscience. But it occurs to me that people should own one. And, owning consciences, people are able to manage Markets in such a way that recognizes that there certainly IS a point at which amassing and controlling too much money is in fact a point which can be reached--- however you define "too much." But this reality has been deliberately forgotten. As a society, we've left "too much" way behind us in the dust, years ago. Greed has become good, to the point that it is no longer acknowledged or admitted. It no longer exists. Welcome to the Oligarchy. http://www.collinsdictionary.com/dictionary/english/oligarchy
Comments
Maybe, maybe not. But paid fairly, based on the actual value of their output? Sue thing, tb... on some other planet.
first about $172K buying a median house.. if you're indeed on wall street, why do you want a house in the pittsburgh suburb (or further out)?
as for the "wall street", traditionally, it is represented by investment banks (in my mind), which provide advice to corporations with respect to capital raising. in order to build a plant for example, a manufacturer needs access to capital - an investment banking team would then see whether, provided company's structure, business model, etc, it is cheaper to issue equity or debt, or place the offering privately, or finance it by spinning off or selling a non-core business -- and they scour the potential investors among institutional money managers (mutual /pension/ hedge/ sovereign plans) for indicative interest. when they pull a deal, they get paid a percentage, which will result in high bonuses to the top dealmakers. Also, the sales and trading group would generate investment ideas and handle order flow... those who cover big sophisticated clients by providing value, will also get a decent bonus.
there are other financial services of course, including retail banking, small business lending, asset management, portfolio accounting, etc. - often part of the same financial institutions - which doesn't come near bonuses like that, except for individual portfolio managers who make money for clients.
i personally don't think that many entertainers provide adequate services to justify their multimillion dollar contracts, but that's just me.
the populism, as strongly promoted by this president, apparently has taken a strong hold among the society -- including this board - unfortunately.
The fact that you have a government who caters to every whim of the banks probably helps matters. I'm not going to get political, but boy this administration really has bent over backwards for the banks. No one ever gets in trouble, money is cheap and any problems are met with a slap on the wrist seemingly not because regulators have to, but because they have to put on a show like they give a crap. Hint: they don't.
Heathcare gets more and more expensive seemingly every day and will likely be something like 20% of the economy within the next 5 years. No one seems to be in any hurry to figure a solution for that, either. Having everyone get insurance does not exactly seem to have solved the problem of soaring costs, now just more people wind up facing soaring costs.
College costs will continue to rake in money and raise tuition because pretty much anyone can get a loan until the situation becomes unsustainable (and has a significant enough negative effect on the economy from the increasingly huge overhang of student debt).
I know of a few colleges who thought they were in the real estate business in 2007. You will get a bust in colleges and one closing the other day (http://www.businessinsider.com/sweet-briar-college-closing-2015-3) is probably the first of many. Tuition cost increases are unsustainable and a solution has to be made beyond just forgiving student debt. I think there will probably be a point where shorting the student housing REITs is not a bad idea.
I don't like a lot of things I see in the world/economy, but you deal with the world you're given/are in and I think the other thing is that focus on yourself because these things are not going to change any time soon. Our priorities in this country are out of whack and it hasn't gotten any better.
Industries will continue to lobby and continue to get what they want - until they don't, but tell me when that happens because it's only gotten worse in the last 10 years.
Agreed, but the time frame ought to be spread back decades, maybe a generation or two or three?
Regards,
Ted
This is atop ~$400k salary, plus options, whatnot. Not seeing what's unfortunate about populist alarm. Good grief. You'd think someone's livelihood was being threatened.
Well, Old Joe knows how to nudge the hornets nest into activity. Thanks Old Joe.
Indeed, the wealth distribution gap between the rich and the poor has expanded over time. This outcome is not entirely surprising. It is an expected outcome from our mostly free capitalistic economic system.
For over 1500 years of incompletely recorded history, the well being of mankind did not substantially improve. Using a modern measure, the GDP per person statistic was roughly constant at a very low level.
Then came the Agricultural revolution which almost immediately freed manpower for the subsequent Industrial revolution. These revolutions were made possible by application of scientific discoveries. By 1776, these dramatic changes were chronicled and analyzed in Adam Smith’s “The Wealth of Nations”. Our GDP per person measuring yardstick has, with just a few temporary exceptions, been mostly rising ever since those faithful events.
The Brits and Europe adopted various forms of the capitalistic concept. Soon, the USA and other New World nations followed with even more success. The rest is history. But the competitive capitalistic system produces both winners and losers; it’s the nature of the beast.
Adam Smith was sensitive to these disparate outcomes, and it did concern him. Here is one of his many quotes on these anticipated disparities: “No society can surely be flourishing and happy of which by far the greater part of the numbers are poor and miserable. ” Smith expected a wealth gap and he was not disappointed.
Like all world shaping happenings, some bad is intertwined with the good. Child labor, overworked women, squalid working conditions, and filthy, unhealthy city living conditions were the order of the day during the initial phases of the Industrial revolution. That has changed for the better for both the Winners and the Losers exposed to the system.
Although the system Losers still get a small cut of the pie, the pie itself is so much bigger now that even a small slice is more rewarding than in yesteryears.
Do I like the current huge disparities in pay scales? No! But it is an embedded part of our capitalistic system.
Would I choose to abandon the system? Absolutely not. As imperfect as it is, real world experimental evidence demonstrates that it is the superior economic system. Supply and demand works to establish a reasonably fair equilibrium.
You and I might not like the outcomes, but supply and demand works its magic. Company managers, movie stars, professional athletes, and money mangers are being paid what the marketplace has experimentally determined is the required wage for market equilibrium. Morality issues do not enter this equation.
I may not be a totally happy warrior, but I’m satisfied that the marketplace has had its controlling final say.
In some ways I wish I had become a money manager; on second thoughts, I reject that idea. I’m happy with my selected work field; I was always free to choose. I chose wisely. I hope you chose wisely too.
Best Wishes.
http://www.collinsdictionary.com/dictionary/english/oligarchy
Aw, shucks...
Thanks, @MJG