As President Barack Obama’s motorcade sped down Broadway to visit a Gap store in Midtown to congratulate the firm’s decision to raise the minimum wage on Tuesday, business employees only a few miles downtown on Wall Street were clearly not paying attention. Despite Obama’s best efforts to improve income inequality throughout the nation — he made it a keystone of his State of the Union address — a new report released by the New York State Comptroller’s Office uncovered that Wall Street firms raised bonuses by an average of 15 percent last year for a cumulative total of $26.7 billion — a sum large enough to double the salary for all of America’s workforce currently earning minimum wage.
In an attempt to raise the average standard of living, Obama augmented the minimum wage for federal employees from $7.25 to $10.10 per hour by executive action. The legislation to bring the wage increase to all U.S. employees is expected to be brought to the Senate for a vote in coming weeks. Republicans, supported by large corporations that claim raising the minimum wage will decrease the number of low-wage jobs available, protest the legislation. Considering the rate at which this Congress has approved legislation, the bill’s passage seems unlikely.
When thinking about a minimum wage worker, most people conjure up an image of a teenager working a summer job for extra cash. In reality, that is far from the truth. The average age of a minimum wage worker is 35. Raising the wage would benefit 16.4 million low-wage workers and address the growing income gap in America. The divide, which has been growing since the 1970s, has reached heights not witnessed since the late 1920s. Such inequality is not a localized problem — it is apparent nationwide. Wall Street deserves much of the blame for the fiscal crisis and the ensuing income inequality.
Obama is expected to announce a proposal to overhaul the system of overtime pay today, furthering his already commendable efforts at curbing inequality. However, if Wall Street continues to award bonuses to undeserving executives, Obama’s attempts at reform will be thwarted. Goldman Sachs recently awarded its CEO — the same one who brought the banking system to the brink of collapse in 2008 — $14.7 million in stock bonuses, and it is not alone in its exorbitance. With income inequality at its highest since the Great Depression, Obama must use his ability as a powerful communicator to spotlight the struggles of ordinary Americans and demonstrate that these reckless actions of Wall Street will not be tolerated. Because Congress seems reluctant to cooperate with minimum wage reform, Wall Street shareholders must step up, holding the actions of their employees accountable and not endorsing such self-absorption.
A version of this article appeared in the Thursday, March 13 print edition. Email the WSN Editorial Board at [email protected].