6,000 UK employees at Goldman Sachs are among staff sharing out £8.1 billion in pay and bonuses for 2012 after the United States banking giant posted better-than-expected profits.
The total pay package at the bank – based on its global headcount of 32,400 – equates to an average of £249,977 for each of its employees and is 6 per cent higher than in 2011. Fellow US investment banking group JP Morgan Chase also posted full-year figures yesterday, revealing its staff salary and bonuses soared to £19.1bn, up 5 per cent on 2011. Its chief executive, Jamie Dimon, receiving £6.3 million.
As City profits soar, the low-skilled, service areas of the economy continue to suffer a fall in income as the consequences of the Great Recession continue to hit the living standards of millions of people. After-tax corporate profits have continued to surge (save for a brief plunge in the midst of the crisis) and in the US are now at their highest in history as a share of GDP. Wages are now at their lowest ever share of US GDP. According to a Bloomberg News analysis, corporate profits have grown by 171 percent under Obama, the most in the post-war era. Profits are more than twice as high as their peak during Reagan’s administration and more than 50 percent greater than during the late-1990s Internet boom, measured by the size of the economy. Average annual corporate profit growth under Obama is the highest since 1900, whereas profit growth declined during both Bush presidencies. Between 2007 and 2010, the median net worth of American households sank 47.1 percent. While US citizens are getting poorer and increasingly applying for food stamps, the nation’s legislators are getting richer. The 113th Congress has become wealthier than the last, with incoming freshmen bringing in a median net worth of $1,066,515 each -- about $1 million more than that of the average American.
In Britain and Europe the trend is much the same. Across Europe, the economic crisis is driving communities to deep desperation, and the people who were always at the margins are getting pushed straight off the edge. In Ireland the percentage of national income went to employees is down to 50 per cent and the owners of capital – people who own shares – are getting more and more of the national income. The two-tier workplace is taking root. Startingn salaries for teachers, for instance, are 25-30 per cent lower than they were three-four years ago. A similar story with nurses. “This is the first generation since the second World War that will not earn more than their parents,” says economist Paul Sweeney. In the UK the squeeze on tax credits and benefits will push 200,000 more children into poverty, the government has admitted for the first time. This suggests that in total a million extra children will be in poverty as a result of government welfare measures.
The total pay package at the bank – based on its global headcount of 32,400 – equates to an average of £249,977 for each of its employees and is 6 per cent higher than in 2011. Fellow US investment banking group JP Morgan Chase also posted full-year figures yesterday, revealing its staff salary and bonuses soared to £19.1bn, up 5 per cent on 2011. Its chief executive, Jamie Dimon, receiving £6.3 million.
As City profits soar, the low-skilled, service areas of the economy continue to suffer a fall in income as the consequences of the Great Recession continue to hit the living standards of millions of people. After-tax corporate profits have continued to surge (save for a brief plunge in the midst of the crisis) and in the US are now at their highest in history as a share of GDP. Wages are now at their lowest ever share of US GDP. According to a Bloomberg News analysis, corporate profits have grown by 171 percent under Obama, the most in the post-war era. Profits are more than twice as high as their peak during Reagan’s administration and more than 50 percent greater than during the late-1990s Internet boom, measured by the size of the economy. Average annual corporate profit growth under Obama is the highest since 1900, whereas profit growth declined during both Bush presidencies. Between 2007 and 2010, the median net worth of American households sank 47.1 percent. While US citizens are getting poorer and increasingly applying for food stamps, the nation’s legislators are getting richer. The 113th Congress has become wealthier than the last, with incoming freshmen bringing in a median net worth of $1,066,515 each -- about $1 million more than that of the average American.
In Britain and Europe the trend is much the same. Across Europe, the economic crisis is driving communities to deep desperation, and the people who were always at the margins are getting pushed straight off the edge. In Ireland the percentage of national income went to employees is down to 50 per cent and the owners of capital – people who own shares – are getting more and more of the national income. The two-tier workplace is taking root. Startingn salaries for teachers, for instance, are 25-30 per cent lower than they were three-four years ago. A similar story with nurses. “This is the first generation since the second World War that will not earn more than their parents,” says economist Paul Sweeney. In the UK the squeeze on tax credits and benefits will push 200,000 more children into poverty, the government has admitted for the first time. This suggests that in total a million extra children will be in poverty as a result of government welfare measures.
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