Wall Street workers received an average of $257,500 in bonuses last year, marking a record high, according to a report New York State Comptroller Thomas DiNapoli released on Wednesday.
The bumper bonus was a 20% jump over the previous record high, which was recorded in 2020, per the report. Overall, the bonus pool in New York City's securities industry grew 21% on-year to $45 billion in 2021.
"Wall Street's soaring profits continued to beat expectations in 2021 and drove record bonuses," DiNapoli wrote in the report.
Workers in securities sectors make up just 5% of private-sector employees in New York City, said the report.
Their wages, however, account for 20% of the city's total private-sector wages. This means they are also a major source of revenue: The securities industry accounted for 18% of state tax collections in the 2021 fiscal year, DiNapoli estimated in the report.
According to data from the New York State Comptroller, the average bonus in the securities industry has more than doubled since the 2008 financial crisis.
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Despite the pandemic, the average bonus in the sector rose 28% in 2020 due to a rash of mergers and acquisitions in the second half of the year, and as market volatility
spurred trading activity, securities companies' revenue got a boost. Banks have also been boosting bonuses to attract and retain workers.
The rapid rise in Wall Street bonuses over the past decades has contributed to gender and racial inequality said the Institute of Policy Studies (IPS) on Wednesday.
Men make up 62% of all securities industry employees, while Black workers hold 7.2% of such jobs nationwide, said the think tank, citing data from the US Bureau of Labor Statistics (BLS).
"These jaw-dropping numbers are just the latest evidence of unequal sacrifice under the pandemic," wrote Sarah Anderson, Global Economy Director at the IPS. "While ordinary workers are struggling with rising costs for basic essentials, Wall Street bankers have seen their bonuses soar further into the stratosphere."
Average weekly earnings for all private-sector employees in the US rose by just 2% between January 2021 and January 2022 — below the US inflation rate of 7%, the IPS noted, citing BLS data. Despite the strong performance of the financial sector last year, DiNapoli cautioned about headwinds ahead.
"Recent events are likely to drive near-term profitability and bonuses lower. Markets are turbulent as other sectors' recovery remains sluggish and uneven, and Russia wages an inexcusable war on Ukraine's freedom," he said in the report.
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"In New York, we won't get back to our pre-Covid economic strength until more New Yorkers and more sectors — retail, tourism, construction, the arts, and others — enjoy similar success." Source: Buisnessinsiders