About the Report
The Street, The City, and The State is an annual report which focuses on the importance of the financial services industry, in particular within New York State (NYS) and New York City (NYC). The report touches on securities industry employment, the employment landscape of NYS and NYC, and the impact of the securities industry on NYS and NYC in regards to taxes, government funding, competition, and future industry and economic growth.
The importance of the financial services industry in general and the securities industry in particular to New York City (NYC) and New York State (NYS) is long-standing and well recognized. Even in these times of economic recovery and financial market regulatory overhaul, the securities industry still has a profound impact on and makes a significant contribution to revenues and overall economic growth of the state and local economy.
As of 2012 year-end data, the Bureau of Labor Statistics estimated that the securities industry employed 819,900 individuals throughout the U.S. Of that total, 23.4 percent, or 191,600 positions, were in NYS and most of those (88.6 percent or 169,700 jobs) were in NYC. Employment in the securities industry directly affects the overall number of jobs in NYC and NYS. The Office of the State Comptroller estimates, based on the economic multipliers and the current level of securities industry employment, that one in seven NYC jobs and one in 12 jobs in NYS overall are either directly or indirectly associated with Wall Street.
The securities industry accounts for more of total wages paid to NYS than its percentage of total employment share would suggest. While accounting for only 2.1 percent of NYS employment in 2011, the securities industry generated 9.9 percent of total Adjusted Gross Income (AGI).
NYS's budget relies heavily on personal income taxes - particularly from the high wage earners in the finance sector. The securities industry remains a significant contributor to NYS and NYC revenues as the industry's employees accounted for 14 percent of NYS's and 7 percent of NYC's tax revenue in 2012, down from 20 and 13 percent, respectively, from pre-crisis levels but unchanged from 2011.
Public policy, in particular financial regulatory reform, remains a significant factor affecting the future of the securities industry in NYS and NYC. The threat of further taxation, as well as pending federal regulations has brought fundamental uncertainty to the securities industry and its business planning. As the Volcker Rule and other regulations under the Dodd-Frank Act are being shaped, the impact of those changes on both profits and employment in the securities industry remains unclear.
- Managing Director, Director of Research: Kyle Brandon
- Research Analyst: Justyna Podziemska