Forty lifetimes isn’t enough

July 28, 2009

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    Flickr, courtesy of Walking Off the Big Apple  </span>
    People protest government bailouts and exorbitant executive pay on New York City's Wall Street. Photo: Flickr, courtesy of Walking Off the Big Apple

I’ll get right down to it: I was disgusted, then furious when I read this morning that an energy trader might receive a $100 million bonus this year. The headline reads “Big Bonuses Are Back on Wall St.”

Dozens of financial services companies are now partially owned by the U.S. government (who has also covered huge percentages of their losses with federal bailout money) and are still posting quarterly losses in the billions of dollars. Yet they — and other Wall Street entities— continue to dole out bonuses that very few of us can even fathom.

Wall Street claims that such exorbitant bonuses are necessary to “retain top talent.” They’d have you believe that this is some kind of meritocracy, simply market forces at work. But when taxpayer money is involved, I believe it becomes something quite different: offering a $100 million bonus to one man is blatant kleptocracy.

I did some figuring. If I work until I’m 65 years old and average a salary of $60,000 per year, I will make $2.52 million over the course of my career. In other words, it would take me almost 40 lifetimes to earn as much as this man will be handed as a one-year bonus.

My father made just over $1 million, total, working 34 years for the same company. While I realize that inflation over a few decades must be factored in, the pay discrepancy between the average American worker and Wall Street executives is monstrous — but not as monstrous as the gap between those executives and hard-working folks in developing countries:

  • The average worker in Bosnia and Herzegovina earns $7,700 each year (calculated by per capita income). Assuming that worker has a career spanning 40 years, it would take him or her 325 lifetimes to make $100 million.
  • Nepal is one of Asia’s poorest countries — annual per capita income is only $1,040. It would take the average Nepali worker 2,404 lifetimes to bring home the amount of money that one financial services firm wants to give a single person as bonus pay.
  • In Central African Republic, where per-capita income is only $740 per year and life expectancy 44 years for a typical male, it would take someone who worked for 30 years of that short life an astonishing 4,505 lifetimes to earn the $100 million casually paid out as an annual bonus to one man.

There are no easy answers to these glaring gaps. Obviously Wall Street has not learned its lesson from helping precipitate the global economic crisis — a crisis that is making millions of people around the world, including hundreds of thousands of Mercy Corps beneficiaries, suffer more than ever. Please take this as just a bit of perspective from one person who is pretty damned angry about it all.