Wall Street 'fat cats' pocketed $26.7 billion last year in bonuses, a sum—according to a report published Wednesday—more than twice the amount earned by the 1,085,000 Americans who work full-time at the current federal minimum wage of $7.25 per hour.
According to report author Sarah Anderson, director of the Global Economy Project at the Institute of Policy Studies, if that $26.7 billion was instead paid to minimum wage workers, the economic ripple effect would have grown the United State's Gross Domestic Product by about $32.3 billion.
Low-wage workers tend to spend nearly every dollar they make to meet their basic needs, such as on groceries or utilities. "Every extra dollar going into the pockets of low-wage workers, standard economic multiplier models tell us, adds about $1.21 to the national economy," Anderson explains.
By contrast, she notes, every extra dollar pocketed by high-income Americans—who "can afford to squirrel away a much greater share of their earnings"—only adds about 39 cents to the GDP.
SCROLL TO CONTINUE WITH CONTENT
Never Miss a Beat.
Get our best delivered to your inbox.
The average Wall Street bonus jumped 15 percent this year to $164,530, the highest amount since the 2008 financial crash, according to an annual estimate released Wednesday by the New York state comptroller.
According to financial watchdog groups, these outsized bonuses were one of the major contributing factors to the crash as they create an incentive for high-risk speculation that jeopardizes the entire economy.
"Low-wage jobs, on the other hand, endanger nothing," Anderson continues. "The people who harvest, prepare, and serve our food, the folks who keep our hotels clean, and the workers who care for our elderly all provide crucial services. They deserve much higher rewards."