Power Breakfast: Wall Street pay up, SunTrust, Equifax

There’s been a lot of talk about restraining executive pay during this recession. But it seems that the talk far exceeds the action.

The Washington Post reports today that Wall Street banks are setting aside billions of dollars more to pay their executives and other employees, just months after these firms were rescued with a taxpayer bailout.

Buoyed by improving profits, Wall Street is on track to pay employees as much as, or even more than, it did in the pre-crisis days, the Post says. So far this year, the top six U.S. banks have set aside $74 billion to pay their employees, up from $60 billion in the corresponding period last year.

Meanwhile, at the other end of the labor market, the minimum wage is scheduled to go up by 70 cents an hour Friday to $7.25. That’s not easy to live on, to say the least.

Is there a disconnect here?

In the AJC:

    In other media:

    5 comments Add your comment

    yeah, there's a disconnect

    July 23rd, 2009
    7:45 am

    You seem to be under the delusion that we’re a fair society. Wake up, Amurrica. Status quo. Golden rule–whoever has the money makes the rules.

    DJ

    July 23rd, 2009
    8:11 am

    the only disconnect is in the brains of people who think that disparity won’t matter over time. Anyone who thinks our culture can withstand this kind of income gap is delusional. I am in no way suggesting that the government limit pay on the high end or artificially inflate pay on the low end but to think we as a society simply don’t have to do anything about it is dangerously misguided. Do rich people really think that they will never be impacted by masses of poor people who have no health insurance? Do the successful people of this country really believe they can just continue to cloister themselves in more and more remote suburbs and gated communities as if there is nobody else out there and not ultimately be dragged down by the crumbling culture around them? These are the people who are failing everybody. Ironic that right wingers rail against “government schools” when these “successful people” are the clueless ones. If you “have it all” and your neighbor “has none”, what do you think will ultimately happen?

    Johnny

    July 23rd, 2009
    8:28 am

    Are you kidding me about the minimum wage comment…”$7.25 is not easy to live on”. Do you know a provider for a family that is currently on minimum wage? If so, how long have they been on minimum wage? Did they graduate high school?

    From my experience as a small business owner (5 small businesses), people on minimum wage are for the large majority high school kids and even they perform well and get raises. Even family providers do not stay on minimum wage long.

    Here is the point, if you have a job and it pays minimum wage, nobody forced you into that job. Also, you have a chance to develop a skill set and go out into the market place to make a living. If the decisions you have made throughout life lead you to a minimum wage career path then you can only fault yourself.

    On Friday, we’ll be giving out a lot of raises to kids who would work for $5.85/hour – I have 200 or so applications at each business where people would work for well less than $7.25.

    When you raise the minimum wage, businesses raise prices to help offset the increase in payroll expense. So the very people this is meant to help actually hurts them as the prices for the basic necessities of life are increased to help offset their new wage.

    Great job on raising the minimum wage!! It will only continue to drive the “poor” further into poverty.

    JIm

    July 23rd, 2009
    8:56 am

    DJ your point is extremely well made. In my view our country is a much better place when everyone a fighting chance to reach the “American dream”.
    Johnny: now ow does the kid making a $1.40 more an hour fall further in debt? Inflation is not likely to jump 20+ % due to this small hourly increase.

    Johnny

    July 23rd, 2009
    9:17 am

    JIm,

    First of all, everyone does have a fighting chance to reach the “American Dream”. Look at our President who has a middle name “Hussein”, comes from a middle class family, has never been responsible for a payroll or managed people (unless a community organizer counts) and is now the President of the United States of America. People make poor decisions early in life and their decisions typically dictate their success.

    What would you do to give everyone a better chance of achieving the American Dream? Similar to the current health care legislation, let’s give everyone health care, a home, a car, a job of at least $30,000…that is all part of the American Dream isn’t it? It does not matter if you work hard for it, make poor decisions or that you may be lazy or unwilling to work harder than the person next to you.

    To answer your question (I think your basic understanding of economics failed you), small businesses are filling the pinch of the economy. When you force businesses to pay people more than they would willingly work, they have two options: cut hours or employees or raise the prices of good and services. Most people who make minimum wage spend every penny of it and work around 20 hours per week…the raise of the minimum wage helps them…of course. These people are high school students who really do not care and spend their money to go on dates, buy gas, clothes, etc. But when the prices of goods and services increase for the person who was already making more than $7.25, it hurts them and they get no raise. The person making $9/hour feels the effect of it. If you live on $9/hour, I would consider that below the poverty level – that person needs every penny of it and now that $9 will have to get stretched even further – that is a clear example of how raising the minimum wage will only drive the “poor” further into poverty.

    Any more questions?