NY: Up to 14,000 Jobs Leaving Wall Street

Tuesday, 11 Oct 2011 11:56 AM

By Newsmax Wires

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NEW YORK  — New York state's comptroller says Wall Street could lose as many as 14,000 jobs by the end of 2012 because of global economic woes, threatening tax revenue for a city and state heavily reliant on the financial industry.

Comptroller Thomas DiNapoli says that after adding almost 10,000 jobs between January 2010 and this April, the industry shed about 4,000 jobs through August and could lose nearly 10,000 more by the end of 2012.

He said Tuesday that profits at New York Stock Exchange firms declined sharply in the second quarter and are likely to reach $18 billion for the year, a third less than in 2010.

Securities activities drove 14 percent of state tax revenue and 7 percent of New York City's last year. DiNapoli warns current and future collections are likely to fall short because of the weakness.

Member firms of the New York Stock Exchange earned $9.3 billion in the first quarter, about half of the $20 billion New York City projected they’d earn for all of 2011. Since then, profits have dropped sharply and are unlikely to reach $18 billion for the year, DiNapoli said in a report today.

“The securities industry had a strong start to 2011, but its prospects have cooled considerably for the second half,” DiNapoli said. “It now seems likely that profits will fall sharply, job losses will continue, and bonuses will be smaller than last year.”

The Standard & Poor’s 500 Index is down about 5.5 percent this year after gaining 12.8 percent in 2010. Stocks retreated today on concern Europe’s debt crisis may worsen.

After adding 9,900 jobs between January 2010 and April 2011, the securities industry shed 4,100 positions through August and may lose another 10,000 by the end of 2012, DiNapoli said.

Each job gained or lost in the industry creates or eliminates three other jobs in New York City and state, he said.

Salary Disparity

More Wall Street finance officials expect bonuses to fall than rise over the next three years, according to an eFinancialCareers.com survey released yesterday. About 80 percent of the 1,098 people who responded to the e-mailed query in the U.S. said they don’t expect bigger bonuses over the next three years, with 46 percent expecting them to shrink.

In 2010, the average salary in the securities industry rose 16.1 percent to $361,330, 5.5 times higher than the average private-industry salary, DiNapoli said. The industry accounted for 23.5 percent of all wages paid by businesses while making up 5.3 percent of jobs.

Wall Street contributed about 7 percent of city tax revenue in fiscal 2011, almost half of the prerecession level of 13 percent, according to DiNapoli. The comptroller said one in eight jobs in the city, and one in 13 in the state, is associated with Wall Street.

Shrinking bonuses and a smaller securities industry workforce threaten New York state’s and New York City’s tax haul, DiNapoli said.

“Given the current weakness, collections are likely to fall short of city and state targets in their current fiscal years and may decline by more the following year,” DiNapoli’s statement said.

 

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