All the child care workers in the U.S. combined earn less than the top 25 hedge fund managers and traders. Wow. Even a jaded old care-work researcher like me finds this pretty startling. I came across the claim in a New York Times article describing Hillary Clinton’s speech at a recent rally and wondered what it was based on, given that government surveys don’t generally reveal the earnings of people at the very top of the income distribution.
It seems that Forbes magazine, eager to celebrate the accomplishments of the hedge fund industry, recently estimated the earnings of its biggest winners in 2013. The online feature includes very nice photos of these men, most of whom look very pleased with themselves.
The actual earnings estimates look pretty approximate to me, rounded off to the nearest million. George Soros tops the list at $4 billion. Last on the top-25 list, Mark Lasry, made a mere $280 million. The total for all 25 comes to $24.4 billion.
In 2013, according to the U.S. Bureau of Labor Statistics, there were 597,900 child care workers in the U.S. earning an average of $21,490 per year. That comes to a total of about $12.9 billion. So, all the child care workers in the U.S. actually earned only slightly more than half (53%) of what those 25 guys did in 2013.
If you were looking for another category of personal workers that earned more–but still less than those 25 guys–consider personal care attendants (persons who assist the elderly, convalescents, or persons with disabilities with daily living activities at the person’s home or in a care facility). They earn slightly less than child care workers on average, but there are about twice as many of them. Their total wage bill for 2013 reached 98% of the earnings of the top 25 hedge fund managers and traders in that year.
No time here to dissect the argument that such differences in individual earnings reflect differences in productivity, but Robert Reich does a great job of addressing this issue here. A more immediate policy issue–and the one that Hillary Clinton emphasized–is that the earnings of hedge fund traders and managers are taxed at a very low rate, because they are treated as capital gains. To his credit, President Obama used a comparison with low-wage care workers to make a similar point in an earlier speech.After writing this post, I discovered that similar figures are available for hedge fund traders and managers for 2014. They didn’t make as much money last year, but don’t worry–they could still pay all the child care workers in the country and have plenty left over for their extensive lobbying and other entertainments.