American Enterprise Institute (AEI) scholar Paul Kupiec has published a research report comparing the average salaries of regulators and bankers. Politico’s Ben White points to it in today’s Morning Money.
Kupiec’s research found that the average compensation at federal bank regulators was much better than private sector bankers in 2012.
Kupiec breaks it down in an opinion piece for the Wall Street Journal:
The average compensation at the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corp. (FDIC) and the Consumer Financial Protection Bureau (CFPB) exceeded $US190,000 in 2012. The staff at the Federal Reserve is likely even better compensated, but the Fed refuses to release employee salaries.
You might think high-paying jobs at these agencies require special skills. Not so. At the OCC, secretaries make on average $US79,182 per annum. Motor vehicle operators (the agency’s limo drivers) at the FDIC earn $US82,130. Human resources management trainees at the CFPB make $US110,759 a year.
In his report, he points out that the average banker salary in the U.S. in 2012 was $US49,540, according to the US Bureau of Labour.
Of course, Wall Street investment bankers and executives make significantly more than that. But banks also employ thousands of folks across the country who get paid much less.
Kupiec counters that argument by writing, “Don’t banks employ many tellers, and aren’t tellers low-paid? Perhaps, but don’t the federal bank regulatory agencies also employ a lot of relatively low-paid workers? You might think they would, but it turns out that they don’t.”
He writes that it’s unfair for bank regulators to get paid so much. He also writes that the bank shareholders and customers are the ones shouldering the costs of these salaries.
“It is totally unclear why individuals that regulate an industry should enjoy much higher compensation than the people they are regulating, both on average and in specific comparable job categories.”
Kupiec continues: “To add insult to injustice, these excessive regulatory employee compensation costs are passed on to bankers through deposit insurance premiums and bank examination fees levied by the bank regulatory agencies.”