Despite a sluggish third quarter, Wall Street has all but cemented its comeback from the economic crisis. Profits are up, stock prices are soaring and big banks are better capitalized than they’ve ever been. There’s really only one thing missing: the jobs.
Private sector employment in New York City has been robust during the recovery; roughly 335,000 jobs have been added, more than twice the number of jobs that were lost during the recession, according to a new report from the Office of the New York State Comptroller. Unfortunately, Wall Street has failed to get in on all the fun. The OSC estimates that the securities industry in New York City boasts 25,600 fewer jobs than it did pre-crisis, a massive 14% dip.
Looking deeper into the numbers, the news is worse than it sounds. Job growth was actually rather strong during the first two years of the recovery, with the industry adding nearly 10,000 jobs between January 2010 and August 2011. Since then, banks have been doing nothing but cutting jobs as they have begun to streamline their organizations.
During previous recoveries, the securities industry accounted for 11% of job gains. This time around, less than 1% of new private sector jobs can be attributed to Wall Street. The only real bumps in employment have been in non-revenue generating roles like risk management and compliance. Take those government-mandated jobs away, and the situation is even uglier.
When compared to the balance sheets of big banks, the numbers paint a rather stark picture. Sadly, Wall Street is doing better without you. It seems the current hiring landscape has little to do with the economy. Banks — with a little help from Washington — have made a choice to be smaller, and it’s paying off. The Comptroller’s office expects New York’s securities industry to continue to contract as it streamlines itself further.
It’s not all bleak, though. Those who remain employed are still taking home a hefty paycheck. The average Wall Street salary in 2012 was $360,700 in 2012, or 5.2 times that of the average New Yorker. Not half bad.