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Wall Street profits this year approach record level. Here’s why it matters to New York

Wall Street profits this year approach record level. Here's why it matters to New York

FINANCIAL NEWS

Wall Street profits this year approach record level. Here’s why it matters to New York

Video: Wall Street profits hit near record in 2021Wall Street profits hit $31 billion in the first half of 2021, a near record and the most since 2009.Joseph Spector, New York State TeamThe COVID-19 pandemic has not slowed profits on Wall Street as pre-tax earnings this year have beaten last year’s outsized growth, a report Thursday found, the Journal News, a USA TODAY Network publication reported.The financial sector is critical to New York’s economy, and the first half of 2021 was extraordinary strong for Wall Street, Comptroller Thomas DiNapoli said in a report.For the first six months of the year, pre-tax earnings hit $31 billion, up from $27.6 billion from the same period last year, and the most since 2009.“Wall Street’s success during the pandemic has benefited New York’s economy and finances during a difficult time,” DiNapoli said in a statement.”The securities industry’s strong profits have helped shore up tax revenues and securities industry workers have been among the first to return to the office.”Wall Street is vital to the state’s finances, making up about 18% of all state revenue each year.DiNapoli said the growth so far this year was fueled by several factors: record low interest rates; strong trading volume; record earnings in subsectors like global equities; and record revenues from underwriting and some account fees.The Democratic comptroller warned that third quarter results could be at risk if interest rates continue to rise.There is also a downside so far during the pandemic: Employment in New York City’s securities industry fell nearly 2% in 2020 to 179,900 jobs, a drop of about 3,600 workers.DiNapoli suggested the loss could be the result of the increased use of technology and the relocation of jobs because nationwide the securities industry is on pace to add 23,000 positions this year.New York remains the capital of the securities industry with 196,800 jobs — double those of second-ranked California.But that share is declining: As of August, New York City was home to nearly 18% of all securities industry jobs, a 32-year low.While New York City accounts for about 90% of the industry’s employment in New York, nearly half of the jobs outside the city were located on Long Island or in Westchester County.The rest were mainly in the upstate areas around Albany, Buffalo, Rochester and Syracuse.Industry employment outside of the city has also declined since its peak in 2008, falling by 12.5%, or 2,900 jobs, to 20,400 in 2020, DiNapoli said.By contrast, he said, in the first quarter of 2021, Florida, Texas and New Jersey gained nearly 6,700 jobs combined in the securities industry.The average salary, including bonus, for employees in the New York City securities industry in 2020 was $438,450, a 7.8% increase over 2019.More: Will Congress end the cap on state and local tax deduction? Deadline loomsMore: Broadway’s zero-tolerance plan for COVID safety is leading the way. Here’s what it meansFollow Joseph Spector on Twitter: @GannettAlbany


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