The financial industry in New York has slashed jobs by the thousands over the past two years in the wake of the global economic meltdown, but Wall Street hasn’t lost its luster.
In 2011, employees in the securities business took home nearly a quarter of all private sector wages paid in New York City, even though they accounted for just a fraction, 5.3 percent, of the city’s private sector jobs, according to a new report by New York State Comptroller Thomas P. iNapoli.
Wall Street’s contribution to New York City’s job growth has been much lower in the current economic recovery than in prior recoveries, as financial firms adjust their staffing levels in response to heavier regulatory burden.
The securities industry has so far accounted for only 3 percent of the jobs added since November 2009, which is much less than its share at this point in the recovery following the 1990-1992 recession (18.6 percent) and the 2001-2003 recession (11.8 percent).
While New York City has gained more private sector jobs than it lost during the downturn (179 percent), the securities industry has regained only 28 percent of the jobs it lost during its downturn. The comptroller estimated the financial industry employed 168,700 people in New York by the end of August.
Bank of America Corp. (NYSE: BAC) relinquished its title as U.S. banking's largest employer after cutting 12,624 employees over the past year, leaving it with 275,460 people. Goldman Sachs Group Inc. (NYSE: GS) shed 3,200 employees during the same period.
Those who have held on to their jobs saw their paycheck fatten to near pre-recession highs. The average salary of financial industry employees in New York City rose to $362,950 in 2011. That's a 16.6 percent increase from two years ago. During the same period, the industry's revenue fell by 22 percent as a result of weaker trading and investment banking activity.
The disparity between the average salary in the securities industry and in the rest of the New York City’s private sector remains wide, even though it has narrowed slightly since the financial crisis.
In 2011, the average salary in the securities industry was 5.3 times greater than the average in the rest of the private sector ($67,900). At its peak in 2007, the average securities industry salary was 6.2 times greater than in other industries. Over the past three decades, the gap has generally widened. In 1981, for example, the average salary in the securities industry was only twice as high as the average in the rest of the private sector.