Wall Street bonuses fell 26 percent last year amid rising interest rates, falling profits and recession fears, New York State Comptroller Thomas DiNapoli said Thursday.
The average bonus totaled $176,700 last year, returning to pre-pandemic levels. Wall Street enjoyed massive profits in 2020 and 2021, but its pre-tax profits fell 56 percent last year.
The overall bonus pool fell 21 percent from the previous year’s record figure, the largest year-over-year drop since the Great Recession, DiNapoli said.
“Wall Street’s cash bonuses were expected to fall as several factors weighed on the securities’ industry profitability in 2022,” DiNapoli said in a statement.
Major investment banks have seen their profits drop as the Federal Reserve’s interest rate hikes weigh on investment banks and other financial institutions. Goldman Sachs and Morgan Stanley saw their respective earnings fall 66 percent and 40 percent in the fourth quarter of 2022.
While the figures show that even Wall Street has taken a hit from the economic slowdown, the average U.S. worker is bearing the brunt of high inflation.
Real average weekly earnings have fallen 1.9 percent over the last year, according to the Bureau of Labor Statistics, as sky-high prices negate the impact of wage increases. A recent Census Bureau survey found that nearly 39 percent of American respondents find it “somewhat” or “very” difficult to afford usual household expenses.
The comptroller said Thursday that Wall Street employed nearly 191,000 people last year, the highest level in more than two decades. He added that roughly 1 in 11 New York City workers is associated with the securities industry.