Posted by Leonard Steinberg on January 10th, 2012

Bloomberg reported to-day that large banks are considering freezing the pay of junior bankers in light of diminished profitability of their institutions. What this really equates to is that the more senior bankers will do whatever it takes to maintain the quality of their incomes: Banks face a huge problem if they do not pay their top people top dollars…..this current state of affairs is the prime environment for banks to steal the best talent from competitors. And the best will always be tempted by the best financial packages.

As much as OCCUPY WALL STREET complained about society’s 99% being disadvantaged, in the banking system too there is a very small percentage of employees who earn the really big bucks.

How does this relate to New York real estate? I think it will further strengthen the higher end of the market at the expense of the lower end. Corporate profits surged in 2011, often because of labor and cost cuts: the top always figures out how to make money. It’s a cruel reality of a capitalist society we live in.