The only way to boost the American economy is to put more money into the hands of the rich, right? Wall Street firms did not disappoint the greedy hands of high-end suppliers such as Ferrari and Swiss watches when they passed out $26.7 billion dollars in bonuses for 2013, which is up a hefty 15% from last year.
Luxury product sales will no doubt increase from those bonuses. The rich get richer while the poor get poorer. That much money could have fed countless starving families across the country. It could’ve provided homeless people shelter for these remaining chilly weeks.
But no, the only logical way to boost the economy is to give big bonuses to people who already have busting bank accounts so they will invest their millions back in, right? Wrong. If this money had been placed in the hands of minimum wage workers, that cash would have spread throughout the economy because these people are using almost every dollar they earn to pay for their basic needs.
[box type=”shadow”]Author Sarah Anderson states, “According to my new report, every extra dollar going into the pockets of low-wage workers adds about $1.21 to the national economy. Every extra dollar a high-income American makes, by contrast, only adds about 39 cents to the gross domestic product (GDP)”. [/box]
Anderson brings up a great point because not only are the rich getting richer, but also they are doing so at the expense of the entire country’s economic growth. Had these bonuses been placed in the pockets of low-wage workers, the growth of the economy would’ve remarkably increased by about $32.3 billion.
[box type=”shadow”]“There was just this kind of cult of more, more, more; grow, grow grow, and I think now the culture on Wall Street is fundamentally unhealthy.”[/box]
Watch former banker, John Fullerton, explain the demise of the Wall Street culture here.
h/t: Moyers and Company