New York City's economic dependence on Wall Street

Wall Street's growth in real salary per worker averaged 3.3 percent annually between 1992 and 1997, helping to drive the industry's average salary to over $175,900 by the end of that period (see Table 3). Since real total wages for New York City declined early in the decade when Wall Street had already started to rebound, Wall Street's share of real wage growth over the 199097 period is 87 percent.

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Wall Street average salaries are almost 4.5 times greater than the average nonfinancial salary of $39,600. Besides Wall Street, only three sectors - hotels, banking, and other finance - had average annual per-worker real wage growth of more than 2 percent in the 1992-97 period. Outside the financial sector, real average wages have grown by only 0.5 percent a year in New York City during this expansion. In the local market sector, where real average wages have actually fallen 0.7 percent a year, annual wages average less than half those in the export sector. Job growth during these years was concentrated in the local market sector, with the bulk of it occurring in industries such as retail trade and social services that pay much less than the citywide average, and have not kept pace with inflation.

Still, it is noteworthy that nonfinancial workers in New York City fared slightly better than their counterparts nationally between 1992 and 1996, the latest period for which comparable data are available at the national level. Nationally, the average real wage for nonfinancial workers has declined 0.2 percent a year, while New York City has seen an average increase of 0.5 percent.

Table 3

Wall Street Has Highest Salaries in New York City

                                                   Real average
                           Average salary,     annual salary growth,
Sector                       1997 ($)               1992-97 (%)

Export sector                 69,600                  3.0
Securities                   175,900                  3.3
Business services             42,700                  1.7
Other finance                 60,600                  3.0
Culture & media(*)            57,900                  1.1
Professional services         65,500                  0.9
Banking                       88,500                  5.8
Hotels                        33,400                  2.4
Manufacturing(*)              39,900                  1.3

Local market sector           33,400                 -0.7
Health services               38,500                 -0.7
Retail trade                  21,000                 -0.6
Construction/mining           44,300                 -0.7
Social services               21,500                 -0.6
Other services                27,000                 -1.3
Wholesale trade               54,700                  0.7
Transportation(**)            43,000                 -0.4

Government                   $42,600                  1.8
Total, all industries        $49,000                  1.6
Nonfinancial industries      $39,600                  0.5

Sources: U.S. Department of Commerce, New York State Department of
Labor, OSDC analysis.

* Publishing is in Culture & media, not Manufacturing.

** Transportation includes Telephone, but other communications
function are included in Culture and media.