Wednesday, May 28, 2008

Outlook for the NYC Economy

The New York City Independent Budget Office predicts there will be 33,000 fewer NYC bankers and financiers by mid-2009. These losses come on top of what Bloomberg news estimates as 83,000 financial-company layoffs worldwide since July 2007. NYC alone has lost about 10,000 financial-service job losses August 2007, 3.5 percent, according to the BLS. Bear Stearns is laying off 9,159 people, two-thirds of its pre-demise total. Citigroup is layoff 15,900 workers worldwide, a 4 percent reduction. A table of cuts from the NY Post is here. Comment by CityEconomist: Wall Street may seem remote from those who don't work there, but spending and taxes by Wall Streeters are crucial for the NYC economy. The dependence on Wall Street has periodically been bemoaned, but as Wall Street productivity increased, revenues and income (including bonuses) per Wall Street worker have been rising steadily with other industries not replacing these jobs and manufacturing jobs that have also been declining. Fortunately, health-care jobs were reliably growing and now we have more tourism and restaurant jobs. But many of these jobs do not pay well. So do not ask for whom on Wall Street the bell tolls - it tolls for everyone with a stake in New York City and that's a large number of people.