ALBANY-A shifting of bonus payments from 2013 to 2012, thus avoiding higher tax rates scheduled to take effect this year, underpinned a projected 8% increase in Wall Street bonuses, State Comptroller Thomas DiNapoli said Tuesday. However, the report also noted a falling-off in securities industry hiring during the second half of ’12, even though New York State still has the highest number of jobs in the sector by a comfortable margin.
“Wall Street is still in transition, but it is slowly adjusting to changes in its economic and regulatory environment,” DiNapoli says in a statement. “Profits and bonuses rebounded in 2012, but the industry is still restructuring. Despite its smaller size, the securities industry is still a very important part of the New York City and New York State economies.”
DiNapoli’s report, issued Tuesday, found that securities industry employment statewide totaled 169,700 jobs as of this past December, a year-over-year decline of 1,000 jobs. The comptroller believes the industry will continue to restructure and downsize until a new business paradigm is established. In New York City, only 8,500 of the 28,300 sector jobs lost during the recession have been recovered.
The report notes that in contrast to previous economic recoveries, the current recovery in New York City is being driven by industries other than securities. While the city has regained 154% of the jobs that it lost during the economic downturn, the securities industry, on a seasonally adjusted basis, has regained only 30% percent of the jobs lost during the downturn.
Partly this is due to a smaller pool of large firms. Three of the leading investment banks prior to the downturn—Lehman Brothers, Merrill Lynch and Bear Stearns—no longer exist in their previous form. On the other hand, the industry enjoyed a far more profitable year in ’12 than it did in 2011: $23.9 billion for the broker/dealer operations of New York Stock Exchange member firms last year, compared to $7.7 billion the year prior.