For most Americans, wage growth has been sluggish, to say the least, ever since the Great Recession began in late 2007. But that's not the case for Wall Street, the sector that helped cause the downturn. In fact, it looks like for the financial industry, the good times are well and truly back.
Less than two years after a massive government bailout, total Wall Street compensation hit a new record of $135 billion, according to a Wall Street Journal analysis. The rise is in part the result of increased revenue, which also spiked to a record high of $417 billion.
The average Wall Streeter is now paid $141,000 -- up 3 percent from last year. And the heavy hitters seem to be doing very well indeed. For example, Bank of America CEO Brian Moynihan saw a 67 percent rise in his total compensation last year. "Things are shifting back to where they were before," one expert on compensation told the Journal.
In 2010, Congress put some restrictions on Wall Street's ability to pay bonuses, after public outrage over lavish rewards at Goldman Sachs, AIG and other firms that figured prominently in the 2008 crash. But the sector has largely responded by simply increasing the size of base salaries, instead.
News of the rebound comes a little more than two years after the start of a government rescue effort that by some estimates transferred trillions of taxpayer dollars to Wall Street -- though much of that bailout cash has now been returned.
But aside from the government backstop, why do Wall Streeters see their pay rising while other Americans' wages are stagnating? One reason, according to the financial writer and management consultant Peter Cohan, is that unlike many industries, most financial sector jobs can't be off-shored.
"Most of what Wall Street does requires workers who are steeped in the trading culture that works best in the U.S. and London or have relationships with CEOs of the largest companies," Cohan wrote in an email sent this morning to journalists, financial professionals, and others. This premium on stateside labor means that the downward pressure that foreign competition exerts on wages -- and employment -- in sectors such as manufacturing and clerical work counts for a lot less in the financial sector.
(AP Photo/Mark Lennihan, file)