As the industry moves out of NY the City will suffer mightily.

Wall Street’s job losses $ocking NY

By ERIK KRISS Albany Bureau Chief

The state’s chief fiscal watchdog is sounding a warning about a new Wall Street slide that he says will belt New York with a new round of job losses and plummeting tax revenue.

State Comptroller Thomas DiNapoli yesterday predicted declining profits on Wall Street for the rest of the year and nearly 10,000 additional job losses by the end of 2012.

“The securities industry had a strong start to 2011, but its prospects have cooled considerably for the second half of this year,” DiNapoli said. “It now seems likely that profits will fall sharply, job losses will continue and bonuses will be smaller than last year.”

He blamed economic uncertainty caused by the European sovereign-debt crisis, continued sluggishness in the US economy, volatile stock markets, regulatory changes and Wall Street’s “excessive risk-taking.”

DiNapoli’s report found that the industry, after adding 9,900 jobs between January 2010 and April 2011, shed 4,100 jobs from April through August of this year.

He predicted that another 10,000 jobs would be lost by the end of next year, bringing total job losses to 32,000 since January 2008, or nearly 17 percent -- still below the average 20 percent drop in the early 1990s and early 2000s.

In his annual report on the securities industry, DiNapoli forecast a second straight year-to-year decline in Wall Street bonuses for 2011.

Both Mayor Bloomberg and Gov. Cuomo said the city and state took the downturn into account in their budgeting.

“We have always forecasted very conservatively,” Bloomberg said. “So I don’t think [projected city revenues are] dramatically worse than what we have in our budget. But it’s certainly not better. Long term, I couldn’t be more optimistic about New York City, but we’re going to have some short-term pain, and it’s going to be real pain.”

Cuomo budget spokesman Morris Peters said the state still believes its numbers “are on track, and a lot of the risks [DiNapoli is] pointing to are in our current forecast.”

But DiNapoli predicted profits for New York Stock Exchange member firms will come in under $18 billion this year -- more than 10 percent below the city’s $20 billion target and one-third lower than last year.

And Cuomo has said he worries that Wall Street’s problems could inflate the $2.4 billion deficit projected for the state’s next fiscal year, which begins on April 1.

Although NYSE member firms earned $9.3 billion in the first quarter of 2011, profits declined sharply in the second, DiNapoli noted.

And the percentage of total tax collections generated by securities-industry-related activities dropped in the last fiscal year to 7 percent for the city ($2.6 billion), from 13 percent before the financial crisis, and to 14 percent for the state ($8.6 billion), from more than 20 perent pre-recession, the report found.

DiNapoli said one of every eight jobs in the city and one of every 13 in the state is linked to the securities industry, while every job in the industry creates almost two additional jobs in New York City and one in New York state.

Yet the gap between securities-industry and other private-sector salaries grew last year after narrowing in 2008 and 2009.

Average Wall Street pay ballooned by 16.1 percent in 2010 to $361,330 -- 5.5 times the average $66,120 private-sector salary and much higher than the average salary in securities jobs elsewhere in New York state ($209,500) and the rest of the nation ($154,600).

In 1981, Wall Street pay was double that of the rest of the private sector.

Still, Wall Street remains profitable. Last year’s $27.6 billion in pretax profits at NYSE member firms from traditional broker/dealer operations dropped by $33.8 billion from 2009’s all-time high, but 2010 was still the second best year on record.