"It is clear by all indicators that our city continues to reel from the effects of the recession," Thompson says in a release. "We are being outperformed by the nation, our unemployment rate continues to rise and our tax collections have dropped. It is my hope that the analysis provided may be a point of reference to identify where we can maximize our efforts to create jobs in this economy." Among other things, Thompson notes that the unemployment rate in the city has gone from 6% to 10.3% in the space of a year.
He adds that on a nationwide level, the most resilient employment sectors are education, medical care, and leisure and hospitality. "We need to think more strategically about the role those sectors can play in our city's and our region's future," says Thompson.
In a statement, DiNapoli notes that although "it's encouraging that the industry is recovering faster than forecast," the impact of regulatory efforts to reform compensation structures could restrict bonuses, to an extent that nobody can predict. "Because of that uncertainty, New York can't rely on tax revenues from Wall Street to save the day."
Moreover, DiNapoli says, the so-called "Wall Street multiplier impact," which generates three jobs for every securities industry job created, has worked in reverse. "Jobs lost on Wall Street have led to job losses in the rest of New York's economy."
The DiNapoli report provides concrete figures on the strength of Wall Street's rebound from a near-death experience. For example, broker-dealer operations of New York Stock Exchange member firms earned a record $35.7 billion in the first half of 2009, more than one-and-a-half times the previous annual peak set in 2000. The four largest New York City-based investment firms earned $22.5 billion in the first nine months of this year, compared to a loss of $40.3 billion during the same period in 2008.
On a dollar-by-dollar basis, Wall Street accounts for 24% of all wages paid in the city while accounting for only 5% of its employment base. The securities industry has shed 28,400 jobs locally since its October 2007 peak; DiNapoli says total job losses in the sector are not expected to exceed 35,000. Meanwhile, the industry added 3,600 jobs in September.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
