From the Record:
New York State Comptroller Thomas P. DiNapoli said on Tuesday that he expects Wall Street to cut nearly 10,000 more jobs by the end of the year and pay less in bonuses, a blow to the tax coffers of New York City and State. Securities-related activities accounted for 14 percent of New York State’s tax revenue last year.
The industry contributes less to New Jersey’s tax base, however, and the jobs and pay cuts are “not a major risk factor” for tax revenue, said Charles Steindel, the state Treasury Department’s chief economist.
“The wages and salaries paid by the financial industry in New Jersey are about 8 percent or 8.5 percent, and that’s pretty close to the national norm,” he said. “It’s not as critical an industry to the state of New Jersey as it is to New York. ”
Still, economists said on Tuesday that bad news for Wall Street is usually bad news for New Jersey, which is home to many stock and bond brokers, accountants and financial analysts who commute to New York from towns like Ridgewood and Franklin Lakes.
“Bergen and Morris counties have significant commutation of people to Wall Street,” said James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers. He did not have exact figures, but he suspects there are enough commuters to Wall Street to have an impact on the local economy.
If they lose their jobs or get smaller bonuses, “the retailers in northeastern New Jersey are going to feel that.” Hughes said. “There will be less activity in the housing market, as well.”
After adding 9,900 jobs from January 2010 to April 2011, the securities industry has lost 4,100 jobs through August 2011.
If, as DiNapoli predicts, the securities industry loses nearly 10,000 more jobs by the end of 2012, that would bring total industry job losses to 32,000 since January 2008.
Patrick J. O’Keefe, director of economic research at the accounting firm of J.H. Cohn in Roseland, said the downturn on Wall Street is “an across-the-board negative for the regional economy, and that’s a negative for New Jersey.”
On the other hand, in the past, cost-cutting by financial firms led to relocation of jobs from Manhattan to New Jersey, where real estate prices are lower, and the current downturn may prompt more of that, he said.
“There is no system that tracks the pingpong of jobs back and forth across the Hudson,” O’Keefe said, “but on net I think New Jersey was a beneficiary of job relocation in the past decade. To the extent it’s going to occur, we’d rather have those jobs come to New Jersey than go to Timbuktu.”