Just one year from the much discussed “death of Wall Street,” major U.S. banks and securities firms are set to pay their employees about $140 billion this year, according to a study by the Wall Street Journal. That’s a record level, just passing the pay levels of the boom year of 2007.
Elsewhere people are taking the largest pay cuts since the Depression:
The Bureau of Labor Statistics does not track pay cuts, but it suggests they are reflected in the steep decline of another statistic: total weekly pay for production workers, pilots among them, representing 80 percent of the work force. That index has fallen for nine consecutive months, an unprecedented string over the 44 years the bureau has calculated weekly pay, capturing the large number of people out of work, those working fewer hours and those whose wages have been cut. The old record was a two-month decline, during the 1981-1982 recession.
A commenter on another post had some sobering quotes from the past:
[W]hereas at one time England was the greatest manufacturing country, now its people are more and more employed in finance, in distribution, in domestic service…I think it is worthwhile to consider—whatever its immediate effects may be—whether that state of things will not be the destruction ultimately of all that is best in England, all that has made us what were are, all that has given us prestige and power in the world…
Granted that you are the clearing-house of the world, but are you entirely beyond anxiety as to the permanence of your great position?…Banking is not the creator of our prosperity, but is the creation of it. It is not the cause of our wealth, but it is the consequence of our wealth; and the industrial energy and development which has been going on for so many years in this country were to be hindered or relaxed, then finance, and all that finance means, will follow trade to the countries which are more successful than ourselves.
There are a couple more that he mentions re: the Dutch and Spanish.
Update: As John Cole says:
Why doesn’t everyone just quit doing what they do and go to work on Wall Street? You clearly don’t have to be competent or know anything, because these clowns trashed the economy and then ran around for months yelling hoocoodanode all while taking bailout money. Then, they turn around and take those taxpayer loans at low interest and the taxpayer guarantees, loan them back to the taxpayer at a higher interest rate, collect their vig, call it a profit, and then give themselves billions in bonuses because they are in the black again and happy days are here again. And half the public is so beaten down and broken they will look at all this and say “Hey, but isn’t it a good thing that Wall Street is profitable again?”
At work I’ve been building an application for data analysis that connects labs and will make us about 20-30% more efficient. We can afford two people two work on it for $40k/year each (there is really no grant money for such development so it’s part of our normal research grants) when we really should have five-six. The development is winding down and so we are close to letting the other programmer go. So far he has found that he could make double that on average at most software companies, or $200-$300k being a low level programmer* for Wall Street doing high frequency trading (the epitome of a societally worthless application that just steals money from the general public). It’s incredible how much more Wall Street pays and gives me a better understanding why so many physics/math graduates went there instead of academia/industry.
* The position wasn’t for experts, which would have made sense. It explicitly said you needed no knowledge of either the statistical models or the systems, just the capacity to learn them.