-Gordon Gekko, Wall Street
Everyone knows you make tons of money in investment banking, right?
That’s common knowledge – but what no one ever thinks about is how much you make per hour.
Yes, making six-figures as a 23-year old is nice – but not if you work 120 hours per week to get there.
So how much do you make on an hourly basis – and is it more than a McDonald’s employee?
The Best of Times…
For entry-level investment banking analysts, the best-case scenario happened way back in 2007.
Base salaries were $60,000 and bonuses for “top-tier” analysts were $90,000, for a grand total of $150,000 in compensation. Not bad for a 23-year old.
That might be a bit high or a bit low (!) depending on the bank and group, but we’ll go with it for now.
With 52 weeks of work per year (there’s no vacation, thank you very much) and 90 hours per week, you would have earned $32.05 per hour ($150,000/(52*90)) in 2007.
At 100 hours, that drops to $28.85 per hour.
Even if, hypothetically, you worked 140 hours per week every single week and somehow survived for 1 year, you’d still be at $20.60 per hour.
The Worst of Times
Of course, long before 2007 and immediately after 2007, bonus numbers fell substantially.
In 2001-2002, for example, Analysts were lucky to get $10,000 bonuses – and sometimes they just received lumps of coal or IOU notes.
A $10,000 bonus and $60,000 salary implies $14.96 per hour at 90 hours a week.
So you’d be in administrative assistant range, but still not quite at McDonald’s level.
But what if you did absolutely nothing but create pitch books for 140 hours per week, every week, and got a bonus of $0?
$8.24 per hour.
What Happened After 2007 and Beyond
In the midst of the financial crisis, bonuses dropped quite a bit from 2007 levels – though not quite as much as people expected.
While these numbers do represent a huge drop, you’d still make significantly more than a McDonald’s employee on a per-hour basis.
At the time of this article, the hourly rate of a cashier at McDonald’s is $7.56 per hour according to Glassdoor.com.
So the only way you’d actually make less than you would at McDonald’s is if you earned a $0 bonus and worked at least 153 hours per week.
Which, um, isn’t possible.
Or Could You?
Hypothetically if we had deflation and investment banking base salaries dropped and you simultaneously got a ridiculous workload, and McDonald’s wages rose, then maybe you could make more at McDonald’s.
Here’s a handy sensitivity table showing you all the possibilities:
And yes, I know Steve Schwarzman makes a lot more than $41. 21 per hour – I just put his picture there because it seemed appropriate.