Good Jobs -- But No Boom
They won’t pay NY’s bills
As the country struggles to recover from the economic crisis, New York City has been creating jobs.
Unfortunately for the big spenders of our city and state government, those jobs aren’t in finance, so the boom-year tax revenues that fueled their lavish outlays won’t return.
Two new reports give the evidence.
Last week, state Comptroller Tom DiNapoli’s annual report on Wall Street bonuses showed that these cash payouts were down 13 percent last year and fully 43 percent since 2006, the peak of the credit bubble — for an average of $121,150 per alpha male, or $19.7 billion total.
Meanwhile, the monthly economic report put out by Mayor Bloomberg’s office shows that employment on Wall Street was pretty much flat last year, at about 168,400 heads. That seeming calm, however, obscures the fact that financial firms added jobs in the early part of the year and then slashed them at the end. We’re still down about 22,700 jobs in the industry, or 12 percent, since it started cutting back in 2007.
On the bright side, however, New York City, at least, is creating jobs at a faster clip than the rest of the nation. Gotham has now gained back all but 1.3 percent, or 41,000, of the private jobs it lost in the recession, while the country is “missing†5.1 percent.
Where are the city’s new jobs? Thanks to record travel numbers, the tourist parts of the economy have recovered all their lost jobs and then some. Hotel and restaurant jobs are up 11 percent, or 26,800 people, since 2008. What Wall Street lost this industry gained, and more.
Because foreign tourists spend a lot, retail jobs are up, too, by 4 percent since 2008, or 12,800 people. Look at the flagship stores on Fifth Avenue and in Times Square, like Uniqlo and Forever 21, that have opened to serve global tourists.
Outside of tourism, the science and tech-services industry — the one Bloomberg is pushing by helping Cornell University build a science campus on Roosevelt Island — has done OK. It’s still 2 percent, or 8,200 people, off its peak, but it gained 14,200 workers last year.
Great, huh? These new jobs are good jobs. Managing a big hotel is a solid middle-class post. Plus, hotel housekeepers, thanks to a great deal their (private-sector) union inked last month, will earn nearly $60,000 in six years’ time. They probably won’t need a multi-trillion-dollar bailout.
Still, the jobs report is not so good for city and state budgets. The problem is that these new jobs, even the high-end technical jobs, will never ever pay what bubble-era Wall Street paid. In 2010, the last year with complete wage data, the average Wall Street job paid $353,439 (including bonus) — nearly six times the average $61,704 that someone outside of finance earned.
Since 2000, state spending, including federal grants, has soared at more than three times the rate of Wall Street bonuses, up 35 percent after inflation, to $132.7 billion. City pension costs have exploded 500 percent in a decade, as The Post reported yesterday, to more than $8 billion.
Five years ago, Wall Street was filling in this hole, providing 20 percent of state tax revenues and 13 percent of city tax revenues, DiNapoli notes. But now it’s not. Those figures since have declined to 14 percent and 7 percent, respectively.
So while it’s nice that Gov. Cuomo and Bloomberg talk frequently about creating jobs outside of Wall Street, it’s not sufficient to get New York on a sound economic and fiscal footing. The governor, in particular, needs to get his pension reform done, even as DiNapoli thwarts him.
Both the city and state need to pare back health-benefit costs for state and city workers and to look at Medicaid costs, too.
Otherwise, the poorer public services they’ll provide residents and companies will drive away our good new jobs.
This piece originally appeared in New York Post
This piece originally appeared in New York Post