Bonuses for junior bankers are a little smaller than they were last year, the mostly anonymous banking discussion board Wall Street Oasis revealed last week, and the junior bankers are not too happy about it. I worked on Wall Street for seven years, and I have observed many cycles in compensation. While the media is usually eager to report with some relish on declining pay — bankers are typically unsympathetic characters for much of America — the complaints from the young men and women who manipulate spreadsheets and do much of the manual labor in investment banking shouldn’t be dismissed out of hand.
Ordinarily a job with high prestige and high pay would result in a comfortable standard of living. And for sure, the pay is high — there are not many jobs out there that pay $200,000 a year for people in their 20s. But average rent has risen to $5,000 a month in Manhattan, and it’s difficult to find an apartment for less than that with anything in the way of amenities. That $60,000 in annual rent eats up about 30% of the typical paycheck, a lot goes to taxes, and there is not much left in the way of savings. I could make the argument that one of these bankers could work in say, South Carolina, make $60,000 a year, and enjoy a higher standard of living, but there would be a loss of prestige.