Friday, February 28, 2014

Banking is the Life!

The Occupy movement brought a new saliency to the issue of income inequality. Their key  slogan – “we are the 99%” – dramatically highlighted the sense that a small elite have been  the main winners in the decades leading up to the crisis . Top percentile  workers have substantially increased their share of the income pie - in the 1970s they took  around 6% of total UK income but by the end of the 2000s, this had risen to 15%.

1. A lot of rich people in the UK are bankers.
In 2008 (seemingly the most recent figures), 28% of all top percentile earners in the UK were London bankers. Since then, bankers’ share of the top percentile pay has almost certainly risen.

2. These rich bankers are very rich. They are richer than other rich people. And they are becoming even richer fast.
The average wage of workers in the top percentile of Britons rose from £278k in 2008 to £284k in 2011, an increase of 2.3%,
By comparison, the average wage of bankers in the top percentile rose from £325k in 2008 to £353k in 2011, an increase of 8.6%. Over 75% (1.4 out of 1.8 percentage points) of the increase in the top percentile’s share of the UK wage bill between 2008 and 2011 went just to bankers. This is in spite of them only accounting for one-third of top percentile earners

3. Bonuses are integral to banking riches
Much as the EU has been attempting to curtail bonuses, they remain the source of bankers’ financial supremacy. The entirety of the pay gain for top percentile workers between 2008 and 2011 was due to bonuses, the study found. On average, top percentile workers in finance received 44% of their total compensation in the form of a bonus. Rising bonuses paid to bankers accounted for around  two-thirds of the increase in the national wage bill (“earnings pie”) taken by the top one  percent of workers since 1999. Surprisingly, even after the crisis bankers took at least as large  a share of the earnings pie in 2011 as they did at the peak of the boom in 2007 and saw no  worsening in their employment outcomes relative to other similar workers.

4. You’re no more likely to find yourself unemployed if you work in the financial sector in London than elsewhere
Being a banker is often seen as like being a footballer or rock star: you have a few good years and then you lose your job. However, the LSE study suggests this is not so. It actually found that a finance worker in London was 2.2% more likely to have a job than an employee in any other industry in the UK. Therefore, not only do you earn more in banking, but your pay is rising faster than in other industries and your job is more secure than in other sectors. Maybe it’s not such a bad career after all.

From here

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