12 10 / 2011
Wall Street outlook dims for 2011: DiNapoli
The securities industry, one of the biggest employers in New York State, could also lose another 10,000 jobs by the end of 2012, according to the Office of the State Comptroller.”It now seems likely that profits will fall sharply, job losses will continue, and bonuses will be smaller than last year,” New York State Comptroller Thomas DiNapoli said in a statement.”These developments will have a rippling effect through the economy and adversely impact state and city tax collections,” he added.An additional 10,000 job cuts would bring the total jobs lost on Wall Street since January 2008 to 32,000, according to DiNapoli’s office.DiNapoli’s prediction comes as the financial services sector shrinks and as Goldman Sachs — seen as one of the savviest investment banks — is expected to report its second loss ever as a public company next week.The European sovereign debt crisis, a poor U.S. economy, unstable stock prices and regulatory changes are weighing on the sector, according to DiNapoli’s report.Even so, not everyone is convinced. Wall Street employees themselves are less optimistic than a year earlier, but the majority still think their 2011 bonuses will be the same or better than they were last year.Sixty-two percent of Wall Street employees expect their bonus this year will be higher or the same as what they earned in 2010, according to a recent survey by eFinancialCareers. Most of that optimism is coming from hedge fund, boutique bank and professional services firms, according to the survey.The average securities industry salary in 2010 was $361,330, or 5.5 times higher than the average private sector salary of $66,120, according to DiNapoli’s report.Last year, securities-related activities accounted for 14 percent of the state’s tax revenue and almost 7 percent of the city’s tax revenue, the report found.One in eight jobs in New York City and 1 in 13 jobs in New York State are linked to the securities industry. Given the current weakness, tax collections are likely to fall short of city and state targets in their current fiscal years and may decline more the following year.”As we know, when Wall Street slows, New York City and New York State’s budgets feel the impact, and that is a concern,” DiNapoli said.
