More Evidence Wall Street Pay at near Record Levels

Wednesday, February 23, 2011 by Wall St. Journal
by Shira Ovide

For Wall Street, 2010 may not have been the halcyon days of 2007. But it was still pretty darn good.

Cash bonuses for New York City financial-sector employees reached $20.8 billion in 2010, according to a newly released analysis from the New York comptroller’s office. Still, the bonus levels were about one-third less than in 2007, and down 8% from 2009.

(The record cash bonus year was 2006, when the state official said $34.3 billion in bonuses were paid out to New York financial workers.)

While cash bonuses declined from 2009 to 2010, overall compensation rose 6%, according to the state comptroller, as Wall Street was forced to pay out smaller cash bonuses and more stock-based pay and salaries.

“Cash bonuses are down, but that’s not an indicator of a weakness on Wall Street,” said Comptroller Thomas P. DiNapoli. “Wall Street is changing its compensation practices in response to regulatory reforms adopted in the aftermath of the greatest financial meltdown since the Great Depression. Past practices rewarded short-term gains at the expense of long-term profitability.”

Last year’s profits on Wall Street landed in second place, behind only the lofty perch reached in 2009 with the help of government bailouts, the comptroller found.

The Wall Street Journal’s analysis of Wall Street banks and securities firms earlier found total compensation and benefits reached a record $135 billion in 2010, and revenue rose a fraction from the year before to another all-time high.

The comptroller’s office counts a smaller subset of employee compensation: only cash bonuses paid out to financial employees who live and work in New York City.

Private pay shrinks to historic lows as gov't payouts rise

With corporate executives making multimillion dollar salaries and collecting huge bonuses--even when their companies don't show a profit and/or lose money--the fact that private employees are being paid less does not even come close to being a surprise. The dicks at the top get all their money and the govt lets them do it, leaving the workers of this country with debts to cover their expenses. How do we change that? Because we really do have to change that!

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Private pay shrinks to historic lows as gov't payouts rise
By Dennis Cauchon, USA TODAY

Paychecks from private business shrank to their smallest share of personal income in U.S. history during the first quarter of this year, a USA TODAY analysis of government data finds.

At the same time, government-provided benefits — from Social Security, unemployment insurance, food stamps and other programs — rose to a record high during the first three months of 2010.

Those records reflect a long-term trend accelerated by the recession and the federal stimulus program to counteract the downturn. The result is a major shift in the source of personal income from private wages to government programs.

The trend is not sustainable, says University of Michigan economist Donald Grimes. Reason: The federal government depends on private wages to generate income taxes to pay for its ever-more-expensive programs. Government-generated income is taxed at lower rates or not at all, he says. "This is really important," Grimes says.