Even though 2020 was bad year for the service industry and the labor markets across New York, it appeared to have been a good year for New York City’s securities industry, which drives an outsize portion of the state’s economy.
Amid the pandemic, and while the federal reserve continued buying corporate debt, the average bonus for Wall Street finance workers grew by 10% to $184,000 in 2020, according to a new report Friday from state Comptroller Thomas DiNapoli.
The comptroller estimates the bonus pool for workers in the securities industry — which includes stocks, bonds and derivatives — also grew to $31.7 billion from December to March of this year, increasing from $29.7 billion from December 2019 to March 2020.
The bonuses are a tracked annually by DiNapoli as a barometer of the industry, which accounts for nearly one-fifth of all private income in the state, according to the comptroller.
DiNapoli attributed the growth in bonuses to the financial markets outperforming projections, low interest rates and a surge in trading due to market volatility.
“New York benefits when Wall Street succeeds, but our economy won’t fully recover until other sectors can reopen and all New Yorkers have a chance to share in economic success,” DiNapoli said.
Securities firms in the city enabled employees to work remotely and allowed workers to open trading operations in other parts of the country throughout the course of the pandemic, DiNapoli said.
However, bonuses paid by firms to those employees located outside of New York are not included in the bonus estimates.
The comptroller also said bonus estimates do not account for stock options “and other forms of deferred compensation for which taxes have not been withheld.”
While New York City’s securities industry accounts for only 5% of total private-sector jobs, the industry accounts for 20% of all private-sector wages, according to DiNapoli. By comparison, the New York Department of Labor estimates total private-sector jobs in New York City fell by 626,800 on a year-over-year basis in February.
All the while, the securities industry lost 3,600 jobs, or less than 2% of its jobs, in 2020.
DiNapoli said that unlike previous economic recessions and national emergencies like 9/11, pretax profits during the pandemic for broker and dealer operations in the New York Stock Exchange increased by as much as 81% to nearly $51 billion in 2020. The growth total a pretax increase in profits of 256% since 2015.
As reported by USA TODAY, the S&P 500 index finished 2002 with a gain of 16.3% while the Nasdaq composite and the Dow Jones Industrial Average gained 43.6% and 7.2%, respectively.
As of February, the New York Department of Labor estimates private sector jobs in New York City decreased the most in the leisure and hospitality (237,500), trade, transportation and utilities (105,800) and professional and business service industries (80,500).
Mario Marroquin covers real estate and economic development. He can be reached at firstname.lastname@example.org or @mars3vega