Manhattan Wages Drop 6.3% on Smaller Finance Firm Bonuses
Manhattan’s average weekly wages fell 6.3 percent in the first quarter from a year earlier, the most for any big U.S. county, as bonuses in the financial industry declined, according to the Bureau of Labor Statistics.
The drop in Manhattan, the only one of New York City’s five counties to decline, was mostly attributable to a $5.3 billion, or 13.4 percent, drop in financial activity wages. Average weekly pay in that industry dropped 13.7 percent, as no other job category with more than 1,000 employees fell more than 1 percent, the U.S. Labor Department said in a statement.
“The report confirms that employee earnings on Wall Street are down,” Martin Kohli, chief regional economist for the bureau, said in an interview. “The good news is employment is growing in other boroughs of the city, although none of the city’s boroughs are showing strong wage growth.”
While securities industry profits may increase this year, its cash bonus pool for New York City workers declined by 13.5 percent to $19.7 billion, state Comptroller Thomas DiNapoli reported last week. The industry accounts for 5.3 percent of New York City private sector jobs, about 7 percent of its tax revenue, and about 14 percent of the state’s revenue, he said.
“The securities industry is still grappling with the fallout from the financial crisis, new regulations and slow economic recovery,” DiNapoli said in his report. “This continued uncertainty could impact profitability and the finances of New York City and New York State.”
The securities industry accounted for 29.3 percent of New York City wages and salaries in 2012’s first three months, down from 34.6 percent the prior year, Kohli said in an e-mail.
Aside from cutting pay, financial firms are awarding a greater proportion of compensation in deferred stock that employees don’t receive for several years, said Richard Lipstein, managing director of Gilbert Tweed International, a New York City executive-search firm. The change may have a rippling effect through the economy, he said.
“If you’re getting 25 percent in cash and 75 percent in stock, you can’t buy a house in the Hamptons,” Lipstein said.
Manhattan’s wage loss ran counter to the national trend, with 323 of the 328 largest U.S. counties posting gains in average wages over the year, the bureau said. Nationally, wages increased 5.4 percent over the year.
The borough’s average weekly wage during the first quarter of 2012 was still 2.5 times the national average -- $2,464 compared to $984. No other county in New York City had an average weekly wage higher than that of the nation, according to the report.
Nationally, the largest increase in average weekly wages was in natural resources and mining, which gained 7.5 percent, followed by a 6.8 percent increase in information services. Financial activities reported the smallest over-the-year increase, 1.1 percent.
Employment increased in 293 of the largest counties between March 2011 to March 2012, according to the labor department. Four of the five New York City counties gained jobs, including Manhattan, where employment rose by 2.3 percent.
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