Nate Silver over at FiveThirtyEight investigates the salaries of Wall Street professionals. While he maintains some level of sympathy for these guys, the numbers don't lie; the suits on Wall Street are making more than they're worth.
First, Silver takes a look at stats from the Bureau of Labor Statistics. Compensation for employees in the securities industry increased a whopping 97 percent between 1992 and 2007. In contrast, the average worker's compensation only increased 20 percent over the same period.
So why did the suits get such a
big bump? Deregulation of the financial sector could be one possible
answer. Thomas Philippon of New York University and Ariell Reshef of the
University of Virginia found a strong correlation between the
amount of deregulation and employee salaries. The graph below, from a
recent paper, shows relative financial wage and deregulation. (And you know how we love a good comparison graph around here.)
Check out the full blog post for more on the right way to fix Wall Street's pay.
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