The fallout from the financial crisis has already changed the way much of America views Wall Street. It may also be changing the way the financial industry views itself.
After years of huge paychecks and bonuses, financial industry workers are seeing their compensation capped and cut thanks to anxiety surrounding the global economy and oncoming regulations. But when a salary or bonus can serve as evidence of an accomplishment, it's disappearance can also amount to an erosion of self-worth.
"There's no other industry where you could get paid so much for doing so little," an ex-trader for Lehman Brothers told New York Magazine as part of a piece about the changing dynamics of Wall Street.
Though the former Lehman trader may be one of the first Wall Street workers to express that sentiment in print, he's echoing the views of others. The head of Britain's top financial watchdog has said that what takes place on Wall Street is largely a "socially useless activity," according to a 2010 New Yorker report.
Some have argued that such high levels of pay create an incentive for bankers to prioritize short-term profits over a firm's long-term health. Such is the reason for a Dodd-Frank financial reform law that requires firms to "claw back" pay in certain circumstances, like if the deal on which a bonus is predicated turns into a loss in a certain number of years.
Paul Volcker, the former chairman of the Federal Reserve and the author of one of the more controversial measures in the Dodd-Frank financial reform law, told New York that Wall Street turned into a place that constantly needed to prove its greater utility.
"Finance became a self-justification" he said.
Paul Woolley, who founded a center at the London School of Economics that studies "capital market dysfunctionality," put it even more bluntly to the New Yorker in 2010.
"Why on earth should finance be the biggest and most highly paid industry when it's just a utility, like sewage or gas?" he said.
May the jig finally be up? Morgan Stanley capped its cash bonuses at $125,000 for 2011 and its top executives didn't net any cash bonuses at all, according to The New York Times. At Goldman Sachs, bonus day was like a "bloodbath" one mid-level executive told CNBC; some bankers and traders learned they would be taking home no bonuses at all, while the firm halved the pay of some of its highest-level employees.
Yet Wall Street will likely remain a top draw for America's best and brightest for the foreseeable future. At Bank of America, a company that has struggled since the financial crisis, average overall compensation for an investment banking associate will likely remain in six-figure territory, even after preparations for pay packages an average of 25 percent smaller than last year.
And they'll still likely be making more than workers in many other high-paying professions with more tangible societal benefits. After 10 years of deal-making, a banker will have taken home more than ten times that of a cancer researcher during the same period, according to Bloomberg.
Still, James Gorman, the CEO of Morgan Stanley, said earlier this month that employees upset with the drop in their pay need to have a reality check. "If you put your compensation in a one year context to define your overall level of happiness, you've got a problem that is bigger than the job," Gorman told Bloomberg TV.
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