What Yoko Ono And Wall Street Have In Common
One of the twenty-five Christmas songs continually played by radio stations this time of year is John Lennon’s So This Is Christmas. I really do like the song, at least until Yoko Ono starts belting out the chorus with the gusto of an inebriated bar hopper singing Karaoke at 2:00 a.m. and the talent to match. In fact, every time I hear the song, she serves as a reminder that sometimes it’s not what you know, but who you know that matters most. Still, I find myself listening to the song every time it’s played.
We’re coming up on Wall Street bonus season. Although the numbers thrown around are obscene and a moral hazard to anyone who believes that Wall Street hasn’t learned its lesson yet, as a New Yorker, I find myself rooting for the bonuses anyway and no matter where you live in the state, you should too. The fact is that Wall Street is New York State’s Silicon Valley. Every time I hear an upstater (loosely defined in this blog as anyone who lives north of Westchester, although the good people of Dutchess would beg to differ) complain about Long Island and New York and suggest that the State would be better off just splitting in two, I cringe and if I am on my best behavior keep my mouth shut. If I can’t resist putting in my two cents, I point out just how dependent everything from your school aid to the quality of your health care is dependent on Wall Street and those obscene bonuses.
And just how dependent is the state on Wall Street? According to the New York Post, your average employee on Wall Street makes $360,700 a year. A report on Wall Street bonuses for 2012 released by the State Comptroller’s office concluded that cash bonuses to New York City securities industry employees rose approximately 8% last year. This translated into average bonuses of approximately $121,000 for Wall Street employees. The same report indicated that before the start of the financial crisis, business and personal income tax collections from Wall Street related activities accounted for up to 20% of New York State’s tax revenues. Since, it had declined to 14% as of 2011.
So we should all be a little concerned by an article in today’s New York Post that stated:
The securities industry has recovered 54 percent of the jobs lost nationwide after the 2008 financial crisis, according to the US Bureau of Labor Statistics.
But Wall Street has recouped only 23 percent. The workforce has been hollowed out — 167,000 employed at securities firms, down from 191,000 in 2008.
Now, these numbers don’t mean that what’s good for Wall Street is always good for New York State. Given the size of the numbers involved, they also underscore for me the need for credit unions to serve those people who fall through the cracks or are trying to hang on to their rung of the ladder in places like New York City or live in parts of New York State where the industrial base has long since faded away. Still, if Wall Street is leaving for places like Florida and Greenwich, Connecticut, the impact will be dramatic and painful for every New Yorker.