Former Labor Secretary Robert Reich posted on Facebook this morning:
"The $26.7 billion in bonuses Wall Street banks handed out just a few months ago during bonus season at the end of 2013, would be enough to more than double the pay for all 1,085,000 of America's full-time U.S. minimum wage workers (according to a just-released study by the Institute for Policy Studies, based on new data from the New York State Comptroller). Those giant bonuses weren't exactly the result of the bankers' extraordinary insights and skills. Most if not all came ...as a result of the hidden taxpayer subsidy given to Wall Street banks in the form of a virtual guarantee against failure that reduced their borrowing costs by .8 percent. Multiplied by the total liabilities of the 10 largest banks, that taxpayer subsidy was $83 billion last year, roughly equal to their profits. Get it? If we taxed that bank subsidy away and gave it to low-wage workers in the form of a wage subsidy instead, it would double the pay of minimum-wage workers."
Well said, Mr. Reich. I encourage everyone to read the Institute for Policy Studies article:
"... low-wage workers tend to spend nearly every dollar they make... All those dollars low-wage workers spend create an economic ripple effect. Every extra dollar going into the pockets of low-wage workers, standard economic multiplier models tell us, adds about $1.21 to the national economy. Every extra dollar going into the pockets of a high-income American, by contrast, only adds about 39 cents to the GDP."
So, rational people would pay low-wage earners more, based purely upon the economics. And we taxpayers continue to pay for the corporate welfare bankers receive:
"This immense GDP differential only speaks to one price we pay for our contemporary Wall Street bonus reward culture. Huge bonuses, we learned from the 2008 financial industry meltdown, create an incentive for high-risk behaviors that endanger the entire economy..."
Meanwhile, the American Bankers Association has the arrogance to lobby against the non-profit status for credit unions. I also find this extremely hypocritical since credit unions outperformed banks on customer loyalty.
What's going on here? Banks control about 94 percent of the market, and their attempts to weaken credit unions is clearly a plan to ultimately rasie prices to account holders. I say this to the bankers:
- If you want to enjoy the benefits of non-profit status, start a credit union
- Clean up your own house first before trying to tell others what to do