Continuing the trend of Wall Street salaries shrinking alongside the workforce of highly paid traders, analysts and others as automation takes hold, pay for employees working in the securities industry fell 5.6% in 2018, when the average salary dropped to $398,600, according to the New York State Comptroller's Office. That's down from $422,500 in 2017, which was the highest average pay for the industry since the financial crisis.
The salary drop was driven by a 17% decline in the average bonus. Bonuses are a critical component of pay for bankers - they can account for more than one-third of total compensation, for some.
Still, average pay for bankers working in the state (most of whom work in Manhattan, or elsewhere in the city) was five times higher than the average pay for other private-sector employees, which came in at $79,000. Though that pay gap has improved slightly since 2007, when securities-industry employees earned six times the average pay.
Here's an interesting fact: Employment in the securities industry in NYC has increased during four of the past five years, though it's still 4% - or 7,600 jobs - below its 2007 levels. Though a breakdown of those jobs isn't given, we can tell from news reports and other studies that a growing number of those jobs are going to quants and coders, and fewer from the traditional banking channels.
As far as what's driving the drop in pay, the Comptroller's Office said market turbulence at the end of last year helped depress bonuses, while changes in federal law drove a transient increase in 2017.
New York counted 201,200 financial-industry jobs in 2018, more than any other state in the country, and in NYC, the industry accounts for 17% of the economy. Interestingly enough (food for thought for those who insist that the industry doesn't pay its fair share in taxes), Wall Street was also responsible for 17% ($13.2 billion) of State tax collections in State Fiscal Year 2018-2019.
Here's an interesting stat: In 2017, the most recent year given, one-third of all finance jobs in the state were held by immigrants. Meanwhile, two-thirds of industry employees were White, 19% were Asian, 8% were Hispanic and 6 % were African American, and men comprised two-thirds of the industry's employees.
Though it might not seem that alarming in the grand scheme of things, there are some signs of more difficult times ahead: job gains in the early part of 2019 have been erased in recent months as investment banks slash headcounts in anticipation of an economic downturn. Early reports suggest bulge bracket banks like JPM didn't hand out as many offers to interns. As of September 2019, the industry was on pace to lose almost 500 jobs in 2019. Last year, the industry added 4,700 jobs.
And that self-inflicted wound could still have an outsize impact. NYOSC estimates that 1 in 10 jobs in the city and 1 in 15 jobs in New York State are associated with Wall Street. The office also estimates that each job gained or lost in the industry leads to the creation or loss of three additional jobs in other industries in the State.