Wall Street salaries continue to far outpace the rest of the city’s private sector even as the securities industry in New York has shrunk, state Controller Thomas DiNapoli says in a new report.
The average 2012 Wall Street salary, including bonuses, was $360,700. That dwarfs the average $69,200 paid by rest of the private sector, according to the report set to be released Tuesday morning.
And even though the securities industry made up just 5.1% of the city’s total private sector jobs, Wall Street accounted for 21.9% of the overall wages.
“New York City remains the financial center of the world,” the report says.
The industry, DiNapoli said, has made an “impressive comeback” since the Great Recession in 2007 and 2008. It has been profitable four years in a row, including the three best years on record.
Firm profits in 2012 reached $23.9 billion, the third highest level on record and higher than any year before the economic crisis.
In the first half of this year, the industry reported a hefty $10.1 billion in profits, though DiNapoli warns that higher interest rates, litigation costs, and Washington dysfunction makes for a more uncertain second half of the year.
“Failure to resolve the federal budget and debt ceiling impasse could disrupt the economy and hurt New York City and New York state,” DiNapoli said.
He projects overall Wall Street profits for the year will wind up at $15 billion, which is still higher than the $13.4 billion forecasted in the city’s four-year financial plan.
A sluggish second half could also impact bonuses. In February, DiNapoli estimated the bonus pool for 2013 would exceed the $20 billion paid out for 2012. The average bonus was $121,900. But now the controller says that the “recent developments have cast doubt on that outlook.”
“The securities industry has undergone changes since the crisis, but it is still profitable, well- compensated, a major contributor to State and City tax revenues, and a driving force in the economy,” the report says.
“It remains to be seen, however, how future regulatory changes and rising interest rates will impact the industry.”
But while Wall Street is still king, it is a far smaller industry since the Great Recession hit five years ago and has played a lesser role in the city’s overall economic recovery.
The industry accounted for less than 1% of the 335,000 private sector jobs added during the recovery. But many of the other jobs were lower-paying and part-time, DiNapoli found.
Wall Street now has 25,600, or 13.5%, fewer jobs since before the economic crisis. And since August 2011, it has actually lost 7,300 jobs after a post recession surge.
But the new leaner, meaner Wall Street still pumped more tax revenue into the city and state coffers in fiscal year 2013 than the previous one. The city saw securities industry-related tax jump nearly 27% to $3.8 billion, the second-highest level on record.
The increases were largely attributable to actions taken by firms to avoid higher federal tax rates that took effect at the beginning of 2013, the report said.
Wall Street now accounts for 16% of the state’s total tax haul and 8.5% of the city’s. The state’s take is still below the traditional 20% before the recession.
