Despite Pandemic, Wall Street Profits Spike in First Half of 2020

Despite the COVID-19 pandemic in New York, the securities industry on Wall Street reported pretax profits of $27.6 billion during the first half of the year, an increase of 82 percent over the same time last year, according to a report released Thursday by the state comptroller’s office.

That means Wall Street generated nearly as much in profit in the first six months of the year as the industry made during the entirety of 2019, according to the report.

State Comptroller Tom DiNapoli said the industry’s success is good news for the state’s finances, since the securities industry generates revenue for the state, but that the news is in stark contrast to what’s happening with small business owners in New York.

“The rising profits on Wall Street are disconnected from the pain being felt on Main Street,” DiNapoli said. “Our economy, and Main Street’s businesses and workers, are badly in need of additional support, including action in Washington on a new round of stimulus and relief.”

The catalyst for the rise in profits on Wall Street this year, DiNapoli said, was $2.4 trillion in stimulus funds from the federal government paired with low interest rates.

But it’s not all good news for the industry, DiNapoli said. The securities industry could lose 7,300 jobs by the end of the year, according to the report. If that pans out, the industry will have lost nearly half of the jobs it’s gained since 2013, at the tail end of the Great Recession.

That’s bad news for Wall Street, but DiNapoli also predicts it could be bad for other sectors as well. According to the report, he predicts that each job lost on Wall Street will lead to three additional jobs lost in other industries.

Data from last year shows that employees in the securities industry earned, on average, more than $400,000, with an average bonus of $164,100. The average salary for the rest of the private sector in New York City was $82,938, according to the report.

Read the full report here: https://www.osc.state.ny.us/files/reports/osdc/2020/pdf/report-6-2021.pdf