Bloomberg reports that Wall Street job losses have contributed to the fall in New York city's tax receipts by 21% so far this year. Lower bonus expectations have also resulted in consumer spending slowing in the city.
Although New York city has put on 45,500 jobs since January, these are all mostly lower paying than the 23,700 jobs lost in the securities industry in the city between August 2001 and October 2002. Wall Street professionals earn around $255,000 per annum on average, whereas the average annual income overall is just $43,500. The securities industry accounts for around 5% of city jobs, but 20% of personal income.
With firms still operating at overcapacity, more cuts look likely in the first quarter next year. Many investment banks have been exiting staff in the last few weeks to avoid having to pay out bonuses. And the days of large pay-offs to go are also mostly over. Bloomberg quotes Paul Newsome, a former analyst who lost his job at Lehman in November, who said: 'Goodness help you if you were one of those who lived off the bonus because they certainly don't give you a million dollars to walk out of the door'.
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