Staff Cutbacks on Wall Street Trouble New York
NEW YORK CITY - for two centuries the dominant financial and corporate headquarters of the United States - is facing increased global competition from such cities as Tokyo, Hong Kong, London, Zurich, Paris, Chicago, and Los Angeles. The Big Apple remains home for the two largest US stock exchanges (the New York Stock Exchange and the American Stock Exchange), as well as a number of commodities exchanges. It accommodates the headquarters of more major US corporations than any other city. But it increasingly finds itself hard pressed to hold its financial-services sector intact.Skip to next paragraph
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Thousands of high-paying jobs have been lost in the financial services-sector in recent years, including positions at securities houses, banking institutions, and credit companies. In addition, a number of major corporations have pulled up their base here and relocated.
Of course, New York retains a strong overall economic base. Indeed, the number of jobs in the city expanded by 326,000 between 1979 and 1988. But most - more than 270,000 of those positions - were in modest-paying, service-related posts predominantly outside the financial sector.
``The financial sector added an enormous number of jobs (in New York City) during the mid-1980s, sometimes at a rate of 11 percent a year,'' says Rosemary Scanlon, chief economist with the Port Authority of New York and New Jersey. ``The industry overreacted during the buildup. Then perhaps it overreacted following the market crash (in October 1987). The question now becomes: As the Dow sets new records, does it once again start to add new jobs?''
``We're not seeing signs of a resumption of growth (in jobs in the securities field), even though the market is going back up,'' says John Wieting, an economist with the mid-Atlantic region of the Bureau of Labor Statistics.
The latest blow to the financial sector came this past summer, when Merrill Lynch announced that it would eventually relocate close to 3,000 people outside the city. Some 2,600 of the employees were in back-office jobs. But another 250 of the transfers involved professionals dealing directly with Wall Street. The workers will eventually be transferred to Jersey City, N.J.
The Merrill Lynch transfers caught city leaders by surprise, prompting unhappy editorials and the ire of City Hall. Merrill Lynch is believed to be the largest local financial-sector employer, with more than 10,000 employees actually working in the city. Ironically, Merrill Lynch's chairman and chief executive officer, William Schreyer, headed up a task force that sought to develop programs to improve New York's business environment for financial services companies. The report was released this summer.
According to the findings of that report, prepared by the New York City Partnership Inc., a group of business, education, and public service leaders, the Big Apple could lose slightly under 10 percent, or some 43,000, of its financial-community work force of 440,000.
The New York City Partnership has met with Mayor Edward Koch and other top officials about crafting city policies to ensure the success of the financial sector. New York is in the midst of an acrimonious mayoral election. ``But whoever is elected mayor will need to take the steps to protect the health of this industry,'' says Sandy Bayer, vice president for economic development for the Partnership.
The challenge for New York, experts say, is great. Nearby states, particularly New Jersey, but also Delaware, and Rhode Island, are aggressively luring businesses away from Manhattan.