Perhaps you heard the news that executives and so-called “producers” at the world’s largest banks and financial companies — Goldman Sachs, JP Morgan Chase, Bank of America — will receive bonuses this month. These bonuses average in the hundreds of thousands of dollars for each employee.
Goldman Sachs is expected to pay its employees an average of about $595,000 apiece for 2009, one of the most profitable years in its 141-year history. Workers in the investment bank of JPMorgan Chase stand to collect about $463,000 on average.
Divide either of those averages by ten. Then think about how the resulting figure represents the salaries of most Americans who are lucky enough to be employed in jobs that have actual social benefit: educators, health providers, emergency responders, public safety officers, and — yes, I am biased — librarians. I didn’t even list social workers who are overloaded with cases, but that should give an indication about social costs we all incur when we allow our priorities to benefit the money changers. As Ezra Klein recently observed, these insanely high levels of executive compensation amount to a redistribution of talent and wealth from the working and middle classes to private wealth:
Because Wall Street pays insanely high salaries as compared to, well, doing anything else, it attracts a lot of talented individuals who then spend their days creating absolutely no value. In that way, it’s worse than simply moving money around. It’s actively taking potential money out.
In other words, this is not merely a problem for this recession, an opportunity for populist outrage. This has long term social costs for the country at large, whether or not we are facing a downturn in two consecutive quarters of economic growth.
