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As Wall Street maintains profits, its ranks are shrinking

January 30, 2013|By Andrew Tangel
  • Jobs in New York's securities industry have become fewer as Wall Street adjusts to new regulations in the post-crisis era.
Jobs in New York's securities industry have become fewer as Wall Street… (Mary Altaffer / Associated…)

NEW YORK -- High-paying Wall Street jobs will probably become more scarce as securities firms continue to lay off traders and brokers in the face of increased regulation following the financial crisis, according to New York's state comptroller.

Profits in New York's securities industry appear to have improved in 2012 compared with the previous year, but at the expense of Wall Street employees, said Thomas DiNapoli, the state's comptroller.

"Part of how firms are maintaining profitability is by having fewer people,” said DiNapoli, whose office plans to release a report on Wall Street bonuses next month.

Wall Street's 2012 bonuses, due to be handed out soon, appear likely to increase over 2011, DiNapoli said. Those lucky enough to have kept their jobs will probably see higher compensation, though many bonuses since the financial crisis have come in the form of deferred compensation, such as stock options, tied to the firm's long-term performance.

"Because of those changes in the compensation structure, I don’t think we’re going to see a return to some of those very, very high cash bonus payouts that we saw in past years,” DiNapoli told reporters at his office in Midtown Manhattan Wednesday morning. But, he added: “The Street is on track for a better bonus year than the year before.”

The average salary in New York's securities industry? It was $362,950 in 2011, up 16.6% over the previous two years, according to DiNapoli's most recent figures. That's still five times the salary of the city's average private-sector worker.

New York City lost 28,100 Wall Street jobs during the financial crisis and has only regained 7,900 of those jobs in the five years since.

While New York City's economy has regained all of its overall jobs and then some -- 162% -- since the crisis, the city's financial sector -- a key economic engine for the region -- has only regained 28% of its lost jobs, Deputy Comptroller Kenneth Bleiwas said.

As Wall Street continues to adjust to post-crisis regulations, Bleiwas expects the industry to see "modest job losses" in the future, though he couldn't predict to what extent in coming years.

"We continue to see the industry restructure," he said.

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