New York City has always benefited a great deal thanks to the presence of Wall Street’s job creation engine, not to mention the impact on the broader regional economy thanks to windfall bonuses and boom-time profits. This recovery is quite different from the last one for NYC, however, as the securities industry is not coming all the way back – despite the raging bull market in stocks, bonds, M&A and underwriting.
I think regulations and technology are the two main forces at work here – firms can’t be in the same lines of business they used to be in anymore, and where they can expand, they are making use of software rather than more people pushing paper. There is also fee compression and a general disinterest on the part of Main Street USA to play along with The Street’s reindeer games. Investment dollars are largely being allocated to 401(k)s and passive investing strategies, two areas that don’t do the industry’s middle men many favors.
From the New York Times:
Almost every industry in the city has been adding jobs at a healthy pace. Data compiled by the New York State Department of Labor indicates that among the fastest-growing sectors are health services and places that serve food and drinks.
Wall Street, on the other hand, has added just a few thousand jobs in five years. Most of that growth has come in the past year or so, after a period of drastic cost-cutting spurred by the financial crisis.
Despite Wall Street’s less-than-robust condition, the city is in the midst of what the budget office described in a recent forecast as “a historically strong payroll employment expansion.” It projected that the hiring binge would continue for at least four years, adding 250,000 more positions by the end of 2018.
Hilariously, one of the employers cited in the piece as being a big, new employer is Buzzfeed, which is “hiring like crazy.” Always a bull market somewhere.