In 2009, just one year after taxpayers rescued Wall Street from falling into the abyss, bonuses for financial employees in New York City rose 17%, to reach an astonishing $20.3 billion. Now we're two years out, and after months of wrangling with financial regulations and more stringent rules regarding payouts, things certainly haven't changed much.
They're back, baby!
As of May 31 of this year, NYC had about 429,000 financial jobs, up from February's head count of 422,200. This is the largest three-month increase since 2008, according to the New York Department of Labor.
The biggest and baddest banks on Wall Street -- Goldman Sachs
And with new employees and new profits comes new bonuses.
According to a recent Bloomberg article, banks are now paying 30%-40% more than what employees are actually expecting to make, as they attempt to lure the best talent away from their competitors. As opposed to the days in 2008 when finance studs were lucky to keep their jobs and earn a base salary, Wall Street is back in business offering the guaranteed, short-term bonuses that so much of Main Street has come to attest.
New York State Comptroller Thomas DiNapoli said earlier in the year: "Incomes are back to levels that many can only dream of," and all of this despite the fact that there "remains a great deal of resentment against the Street."
Does it even matter?
Of course there's reason to be upset, as it was mostly taxpayer-subsidized money that helped so many of these financial institutions stay afloat (AIG
Additionally, do we really care if Wall Street bigwigs are getting one- or two-year guaranteed bonuses? Maybe it's actually a good thing. A recent article in The Atlantic makes a very valid point:
If you are guaranteed to make a certain amount of money for the next year or two, that wouldn't persuade you to pursue bigger short-term profits despite bigger long-term risk. Indeed, for the next few years, you're already set -- there's no reason for excessive risk taking. On the contrary: you might even care more about long-term performance, since you won't get more than is promised for the next year or two anyway.
What do Fools think -- should we care if big-time bonuses are back, or should we just be happy that jobs are being added and financial health is being restored? Sound off in the comments below!