Forbes: Finance Jobs Moving From Wall Street?
I came across this Forbes column this morning that obviously caught my attention: The Cities That Are Stealing Finance Jobs From Wall Street. The author claims that NY fell into 52nd place on their chart of the fastest growing cities for finance-related jobs, and SF falling to 37th (even though it was rated #1 on their 2013 List of The Best Cities For Jobs). I found this to be really interesting, considering that on this site it is (almost) everyone's dream to make it to "the street" in NYC. Is this changing?
Their fastest growing cities for finance-related jobs are respectively as follows: Richmond, VA; Pittsburgh, PA; Fort-Arlingworth, TX; San Antonio, TX; & Jacksonville, FL. Reasons listed for this shift is lower fixed costs, and lower salary demand.
What are your guys' thoughts on the topic? Are finance jobs diluting throughout the US, or will Wall Street always have the largest hand in the pot?
I thought this was particularly interesting because I'm just starting my journey into finance, and if this author is accurate, then there's more opportunity around me that I originally thought.
Another thought: if any of you were given the opportunity of NY and another "2nd tier" city, would you choose the latter?
From Forbes:
Over the past 60 years, financial services’ share of the economy has exploded from 2.5% to 8.5% of GDP. Even if you believe, as we do, that financialization is not a healthy trend, the sector boasts a high number of relatively well-paid jobs that most cities would welcome.Yet our list of the fastest-growing finance economies is a surprising one that includes many “second-tier” cities that most would not associate with banking.
All those cities fucking suck NYC or bust bitches
Is it surprising? Cheaper real estate, lower salaries, same quality of work...
Almost all of this is BO work, with a few exceptions like some DB IBD analysts in FL.
DB has a big trading floor in Jacksonville, apparently around 2,000 employees (FO, MO, BO) all there. It is the shortest flight in the nation from NYC to a city in a state with no state income tax at about an hour and a half.
Everyone knows that the majority of top finance opportunities still exist in the major financial hubs.
Just because there are a ton of people working at Capital One in Virginia making $100K+ and paying $800/mo rent doesn't change the fact that NYC is and will continue to be the finance capital of the world (unless the whole island of Manhattan sinks, but I don't see that happening soon).
Most front office roles (with the exception of wealth management) will continue to be in the major cities such as NYC and SF, while the middle- and back-office roles will be pushed out to cities where the payscale can be lower (and they won't see a drop off in applications)
From the article:
"So what gives here? A key factor is cost-cutting. As firms look to move back office and some sales functions to less expensive locales, the traditional financial centers are losing out. Between 2007 and 2012, New York, Boston, Los Angeles, Chicago and San Francisco lost a combined 40,000 finance jobs.
In addition to lower rents in the cities that rank highly on our list, workers come cheaper, too: the average annual salary for securities industry jobs in St. Louis is $102,000, according to the Wall Street Journal, compared with $343,000 in New York"
So in short - most of the money will still be made in the major cities.
And I would choose NYC over every other city every day (but I am very biased).
@WallStreetStandard - No, it isn't surprising that there is a movement because of costs. That's one of the more obvious reasons. Its a similar idea to outsourcing labor, but it's still in the US.
@DBCooper - Yea it doesn't really specify where these numbers are coming from. If JPM moves an accounting office to Pitt does that count as moving a "financial sector job"?
@idragmazda - I don't think that NYC will fall from its finance throne any time soon either. Really what I was thinking about was if it was possible that the financial sector could become more diluted across the US and have it not be, as Michael Lewis would put it, such a catastrophic failure to end up in Equities at Dallas? Agreed that the top, more attractive/higher paying, opportunities will still stay at the major hubs still - Wall Street will just begin outsourcing more of its BO work to cheaper areas!
These are not front-office banking or trading roles so who cares.
Well if you are able to buy and pay off a house by the time you're 25 despite the lower salaries in these cities that sounds pretty darn good.
In the end Wall Street will reign supreme for upper end finance jobs.
The roles being created in these cities are in all parts of the office, FO MO BO. You have to carefully read the article to understand what is being said. If Austin has 10 finance jobs and creates 10 new finance jobs they have a 100% growth rate. If NY has 100k finance jobs and creates 1,000 finance jobs that is a 1% growth rate.
If you're fighting over a candidate, good look getting him/ her to take your offer when you're asking them to move to Jacksonville or Pittsburgh (nothing against those places, just tryna make a point). They justify their increased office rent with the HR leverage it gives them.
Buying and paying off a house by the age of 25 doesn't sound half bad, but then again is there going to be places to move up when these other cites become more populated with finance jobs? Or will it still be limited compared to NY? Obviously the opportunities are greater in NYC right now then anywhere else in the world - and has the highest probability of staying atop #1 in the future.
@heister - % change is always something that needs the absolute numbers beside it for exact reasons you stated.
From the end of the article:
"Historically financial services clustered in big cities, but increasingly cost is leading financial institutions to focus on smaller metropolitan areas. With the connectivity of the Internet and growth of educated workforces in many smaller metros, it has become increasingly possible for financial firms to locate many key functions outside of the traditional money centers...
...As we saw in manufacturing and information sectors, the financial services industry appears to be undergoing a profound geographic shift. Once identified largely with such storied locales as Wall Street, Chicago’s LaSalle Street or San Francisco’s Montgomery, the financial sector — like much of the economy — is dispersing, perhaps even more rapidly. Over time, this could accelerate the process of economic decentralization that has been occurring, fairly steadily, for the better part of a half century."
Also, since NYC is already the center of the finance world, it shouldn't be expected to be the fastest growing... Isn't it already at its carrying capacity so to speak and couldn't sustain high growth?
If working in custodian at BNY Mellon really gets you going then I guess Pittsburgh is a great finance city for you.
if i could paid like in NYC with similar advancement opportunities i would take any of those cities over it. lower cost of living and lower taxes trump whatever perceived prestige NY fuck prestige, get money.
WTF?
I saw that it mentions Denver as the number 10 city. Any ideas why? Also suprised Salt Lake is not part of the top 10.
There's definitely more money in NYC, but unless you're at the very top, your real after tax income is going to be lower. Coming out of college I worked in sell side equity research in Nashville, and bought a two bedroom condo in the city with money I saved up working during school plus a small loan from my folks that I could easily pay back by my first semi-annual bonus. Zero state and city income tax. 50 - 60 hour weeks on average.
Didn't have any difficulty in doing the job due to the location - the vast majority of the work is easily done with a phone and internet connection, and if I need to visit clients or management teams, the northeast is a two hour flight, the west coast four hours. Now of course if you really value being able to have the experience of living in New York that's completely understandable, but you are paying up for it - don't think that you'll be better off in a financial sense simply because salaries are a lot higher there.
It's because the industry is shrinking, so you see the biggest impact on the largest (based on head count) and most expensive pay areas I.e. NYC
That, and the fact that many of the areas that show up on this list are merely there because of high percentage increases, which is just a small denominator effect.
Banking in Somalia > Banking on Wall Street
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