New York can’t predict the future of its most lucrative industry, but it should pay more attention to the past.
Just before the turn of the millennium, the then-mayor of New York City, Rudy Giuliani, announced a “Christmas gift to the city”: a $900 million incentive package to the New York Stock Exchange. The deal was classic corporate socialism: an array of tax breaks as well as the purchase and transfer of a city block — part-occupied by a newly converted apartment building — so that the NYSE could build a supertall tower to expand its operations and stop threatening to leave for New Jersey.
Giuliani was only the latest elected official to fret that without the aid of state capitalism, “Wall Street” would leave Wall Street. More than three decades earlier, then-Gov. Nelson Rockefeller and his brother, Chase Manhattan Bank chairman David, had demolished swathes of Lower Manhattan to build the Chase Manhattan Plaza as well as the World Trade Center and keep financial businesses downtown.
The NYSE deal fell through, and the trajectory of Wall Street continued along an inexorable long-term trend: slowly but surely, as everyone had feared, losing its share of national finance jobs and losing jobs to technology, too. The stock exchange, longtime symbol of Wall Street’s humanity, hosts just one-tenth of its pre-millennial 5,000-strong trading and broking force, and its expansion last year — an electronic-only stock-trading exchange — was in Texas.
The weird thing, though, is that even as the decline unfolded, New Yorkers stopped noticing. New York’s future turned out fine, economically and fiscally. New York State felt confident enough in its position as a home to high-end jobs that, in 2021, under then-Gov. Andrew M. Cuomo, it sharply raised income taxes on wealthy earners.
But an analysis of that history shows why things may not stay fine, and the economic and fiscal uncertainty isn’t limited to the impact of artificial intelligence on jobs. Rather, the danger is an intensification of what’s already been happening for decades, with or without AI. We shouldn’t fear the unknowable future, but the acceleration of the present.
How we got here
Anyone worried about an AI-spurred jobs catastrophe coming to Wall Street — the city’s securities underwriting, trading, sales and investment sector — need only turn to the classified ads of the 1980s and 1990s New York Times Sunday “help wanted” sections to realize that we’ve already long had a hint of the Wall Street jobs catastrophe. In 1985, halfway through the Reagan-era “greed is good” decade that helped turn New York's fortunes from the 1970s fiscal bust, Wall Street was a growing industry, concentrated in New York. Local jobs in the securities industry had nearly doubled since 1973, from 74,500 to 130,000, and comprised more than one-third of the nation’s share of such posts.
The industry always had its disproportionate share of Fifth and Park Avenue dwellers, but the classified ads demonstrate an egalitarianism, too. To staff an industry still dependent on in-person stock and bond trades as well as reams of paper to record those trades and transfers as well as the borrowing and lending that backed them, column after column of ads called for margin clerks, vault clerks, head runners, assistant head runners, payroll clerks, teletype operators. Applicants who wanted to start at the bottom and work their way up could join stockbroker-trainee programs, spending their days dialing for clients.
No, the highest-paid jobs — scarce positions at Goldman, Sachs or J.P. Morgan & Co., or at a boutique firm — weren’t advertised in the newspaper; they recruited directly from elite colleges and family connections. But there was work for everyone, from new-account specialists to wire clerks. The mean annual bonus was $13,970 — about $44,100 in today’s dollars.
By the turn of the millennium, the Wall Street jobs roster continued to expand, to a peak 200,300 positions in 2000. But the city was fast losing its share of industry jobs, down to below a quarter of the national tally. Trading jobs expanded in New Jersey and Connecticut. Discount-brokerage firms, replacing full-service brokers, expanded in California and later, in Texas.
The jobs the city was losing were mostly in the middle or at the bottom of the industry. The average bonus, by then, was $100,530 — $198,300 in today’s dollars. Wall Street still employed tens of thousands of middle-class brokers, traders, and support workers. But in New York, it was mostly growing at the top: a relatively few people with ever more advanced educations, or proven skills at quantitative analysis, were making ever more money.
After the tech-bubble burst that year, and after terrorists attacked Lower Manhattan the following year, Wall Street’s local middle-class jobs base never really recovered. New York City shed industry jobs far faster than the country as a whole — losing 23% of its peak-year industry jobs by 2003, compared to 9.8% nationwide over the same period. Though some hedge funds were opening or expanding offices in Connecticut, the jobs that vanished from Manhattan were still mostly not the top jobs, but middle-class and working-class jobs: Gordon Gekko kept his post, but Bud Fox didn’t.
For a while, investment firms moved some of these middle-class posts to cheaper New Jersey and Connecticut, building new satellites in Jersey City, for example. Connecticut’s securities industry continued to grow through 2011, when it reached a peak of 26,500, and New Jersey’s grew through 2007, when it reached a peak of 59,600 — together, gains of more than 40,000 relative to the early 1990s. But that regional transfer of jobs largely stopped after the global financial crisis. Many middle-class financial jobs in the region simply disappeared, automated away: Few firms need floor runners anymore, and few people call a stockbroker to make a trade.
Today, Wall Street is enjoying record profits — $65.1 billion in 2025 (on an inflation-adjusted basis, profits were still higher just before the financial crisis). A volatile world has kept revenues from trading stocks, bonds and derivatives robust; borrowing, whether in the public or private sector, is at record highs; and nosebleed stock markets — albeit concentrated among a few tech companies — are hospitable to initial public offerings. And though traditional financiers have viewed cryptocurrency with concern, so far, it hasn’t proven a formidable competitor to stocks and bonds.
But a nearly two-decade-long bull run — it's been a long time since 2008 — hasn't translated into impressive employment numbers for New York. It took until 2024 for New York’s securities industry to surpass its local jobs peak of nearly a quarter-century before. Today, employment stands at 207,400, about 3.1% above its millennial peak, and now just 18% of the national share of such jobs, barely half of its mid-1980s share.
The jobs that remain here are increasingly the well-compensated positions. The average Wall Street bonus last year, out of a 2025 pool of $49.2 billion, another nominal record, was $246,900. In 2024, the average annual salary in the industry, just above half a million dollars, was nearly five times the average private-sector wage in the city, the state’s comptroller reminds us, having more than doubled (in nominal terms) since 2000; the average wage citywide has risen slightly less, thanks in part to mandated increases in the minimum wage.
How Wall Street’s makeup changed, and what it means
That Wall Street steadily became more exclusive, and better-paying, helps explain why New York City and State government barely noticed that the industry has hardly created any new local jobs in a quarter century. Though fewer people are needed to generate record profits, the tax revenues have kept pouring in.
The industry’s share of the economy and the state and city budget remains outsized. Last year, though comprising just 2.7% and 4.9% of private-sector jobs in the city and state respectively, the securities industry generated 15.2% and 22.5% of wages, says Sifma, the securities industry and financial markets trade group.
According to my calculations based on state-comptroller data, Wall Street’s share of city tax revenues has held steady since the late 1990s, at an average of about 7.3% over the past three years, or about $5.6 billion annually. Wall Street’s share of state tax revenues, however, has risen, to about 21.7% of state tax revenues over the past three years — an average of $24.3 billion annually — up from about 17.5% around the turn of the millennium. (The city, with its property-tax base, is less directly vulnerable to a Wall Street downturn than is the state, which relies more on the income tax.)
Another reason why New York barely noticed this wan Wall Street jobs recovery, compared to the national picture, is that the ever-higher-paid Wall Street workers freely spend their money. Sifma estimates that every direct job on Wall Street supports two more jobs within the state, from restaurant workers to private-school administrators to real-estate agents.
Finally, New York barely noticed Wall Street’s stall-out because over the past quarter-century, New York succeeded in attracting well-paying jobs in other professions, mostly tech, both on purpose and by accident. The city more or less stumbled across a robust tech industry, as startups populated the lower half of Manhattan’s west side, attracted to sturdy old buildings as they took advantage of the city’s advertising industry and other legacy expertise. Tech employment well more than doubled over the past decade and a half, to more than 203,800 workers. In less well-paying jobs, New York has added tens of thousands of dollars in low-paying healthcare jobs, subsidized with the tax dollars generated by Wall Street.
Short the future?
Why worry now, then? Predictions of high finance shrinking as a share of the economy, whether from terror risk after September 2001 or growing street disorder after June 2020, soaring taxes and real-estate costs, have for decades come to nothing. Many of the jobs left, sure, but the money stayed. The new democratic socialist mayor, Zohran Mamdani, doesn’t trouble himself as Giuliani once did that investment and trading firms might leave the city. When, in February, American Express, the global payments firm, announced a new headquarters building for 10,000 people at the World Trade Center site, the mayor concentrated his remarks on how the tower’s construction would generate “good union jobs,” rather than on how the company would employ finance workers in the tower itself.
The city and state face two risks, though. The first is that during the next recession — and one is overdue — Wall Street won’t confine its job-shedding to what’s left of middle-income and upper-middle-income jobs. Firms would target higher-end jobs, too, for transfer or elimination.
This possibility isn’t so much a wild doom-and-gloom prediction as it is a slowly unfolding reality. In the past half-decade, firms from JPMorgan Chase to Goldman Sachs to Apollo have expanded not in New York, but in Florida and Texas. One change from previous expansions outside of New York: this time around, Goldman is among the firms that wants top-level directors — not all, of course, but some — to base themselves in Texas.
Indeed, Texas is becoming perilously close, from New York’s perspective, to reaching a self-perpetuating point where an agglomeration of finance jobs attracts even more and better finance jobs. Over the decade to 2025, Texas created 30,100 jobs in the securities industry — a 45.5% increase — outpacing New York’s 20,800 new jobs. As Sifma notes, the state, now with 8.3% of industry jobs, is “becoming a major financial hub,” already home to the second most Fortune 500 companies in the U.S. behind California. The new Texas Stock Exchange, with investment from major players such as JPMorgan Chase and BlackRock, will soon start luring IPOs — and potentially bank-led underwriting and sales jobs, as well.
Texas' lack of personal-income tax is “especially alluring to high earners,” the trade group observes, in contrast to New York, “one of the few states to raise taxes in 2021.” As E.J. McMahon notes, top earners in the state now face the highest tax burden they have in four decades, when the financial sector began to take off. Most highly paid executives and traders may not have minded the Cuomo-era state income tax hikes on the rich a half-decade ago, and may not even mind that much now, when overall revenues are still growing. In an industrywide retrenchment, they may mind more.
The second risk is that as this higher-end jobs transfer happens, New York’s job growth in its other professional industries slumps. This possibility, too, isn’t a prediction but a reality: The city lost 57,300 private-sector jobs in the year through March, including 5,800 professional and business jobs. As growth in the tech and other industries slows or reverses, whether because of AI or because a debt-driven, consumer-dependent economy is mostly spent out, what industry will replace it? No industry comes close to paying what Wall Street pays: the average tech job pays $135,000.
What if the Masters of the Universe depart?
What would New York look like if its well-paid Wall Street jobs base permanently shrank?.The city would be more equal, sure — but not in a good way, at least not for many people and interest groups who have grown accustomed to a permanent regime of state and city budget largesse funded by finance. In current dollars, New York City’s 1985 spending was about $59.3 billion; the city, this year, will spend $125.8 billion. High-paying job losses would also mean revenue losses for government. Absent drastic spending cuts both to union-worker compensation and to redistributive programs such as record homeless-services spending — cuts for which the state and city have never had a political appetite — the state and city would have to raise taxes on middle-class earners, including homeowners.
New York City and State did not create the four-decades-long-and-running financial-markets boom that began in the 1980s and contributed so much to its recovery from its 1970s near-bankruptcy. But the difference between then and now is that back then, finance had no choice but to be in New York, despite the city’s crime and quality-of-life woes. Similarly, New York has no control over the trajectory of financial markets, or of technology. If AI results in permanent job cuts in finance and elsewhere — still an unknown — New York City cannot stop that process. The only thing the city can choose, or not, is its own complacency.
