Wall Street Still Pays

Despite recent cuts in bonus payouts, Wall Street still pays pretty well.

When adjusted for inflation, wages for investment bankers and securities-industry employees, including salary and bonuses, increased 117 percent from 1990 through 2014, according to U.S. Bureau of Labor Statistics data. Over the same period, wages for all other industries rose 21 percent, to $51,029 in 2014, about one-fifth of the $264,357 that bankers and brokers earned that year.

As the supreme sales organization that it is, those who sell what Wall Street makes continue to rake in the dough. As for the rest of us, the record remains spotty.

The gains are almost unheard of in other industries, even those regularly among the highest-paying or that typically require some form of post-secondary education, BLS data show. Employees of sports teams and clubs saw pay increase 66 percent from 1990 through 2014, adjusted for inflation, while those at legal firms saw wages rise 24 percent.

Apparently, though, these Wall Street types actually grumble about recent bonus cuts. While most people would find this incredible, I've known enough of these sorts to confirm the attitude. It's simple. They've been spoiled and they feel entitled. But what's so odd about that? Aren't many of us in that camp - spoiled and feeling entitled? Why should Wall Street employees be any different?

Besides, the grass apparently gets greener, at least in the financial services world.

The portfolio management business showed an increase of 131 percent.

Over 24 years, that's raise of about 5.5% per year. Have you gotten a raise like that every year for the past 24 years? Imagine people who manage money making money hand over fist like that? And for what? If you'd invested in the S&P over the last ten years, you'd have a gain of around 4.7%, or about .047% per year - less than inflation. Which means you'd have lost money. Meanwhile, paying someone to manage those funds would likely mean you'd have lost even more, since it's a rare person or organization that can charge a fee to manage stocks and get results better than simply investing in an index fund.

Which means you lost money while money managers made around 5% per year in overall compensation to lose your money.

Okay, so we're speaking in rather broad terms here. But the concept remains valid. Those who manage other people's money (Wall Street, the investment management industry in general) do quite well. Those who have their money managed, on the other hand, don't always do all that well.