New York City’s Financial Sector Is in Trouble as Jobs Flee to Red States

New York City’s role as the nation’s leading financial center is showing signs of strain, according to new data and warnings from one of the city’s top business leaders.

Kathryn Wylde, president and CEO of the Partnership for New York City, said in an interview Sunday on WABC 770 AM’s “Cats Roundtable” that the city faces a critical challenge in maintaining its status.

“Right now, the big challenge is are we going to remain competitive for jobs?” Wylde said.

She emphasized that the financial services industry, long a cornerstone of the city’s economy, is shrinking in New York.

“They’re our biggest taxpayers and major employers – and that industry is shrinking in New York,” she told host John Catsimatidis.

Figures compiled by the Partnership for New York City and shared with FOX Business show that Texas has now overtaken New York in the size of its financial services workforce.

In 2024, Texas recorded 519,000 financial sector employees compared to New York’s 507,000.

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The data includes banking and finance roles but excludes insurance and real estate jobs.

Within New York City, the industry shed 8,400 jobs from January through August of this year.

That contrasts with the same period last year, when the sector added 6,400 jobs.

Since 2019, New York City’s financial services workforce has expanded by just 4 percent.

By comparison, Austin’s sector grew 27 percent, Charlotte rose 21 percent, and Dallas increased 11 percent over the same period.

Major employers have followed the broader migration trend. JPMorgan Chase now employs more workers in Texas than in New York.

The bank reported a workforce of about 31,500 in Texas last year, making it the state with the company’s largest employee base.

JPMorgan still has 24,000 employees in New York City, compared with 18,000 in the Dallas-Fort Worth area, but the momentum is shifting.

Goldman Sachs employs 7,800 people in New York City, while its Dallas hub is expected to expand from 4,000 employees to more than 5,000.

“We are seeing an acceleration of financial services jobs relocating to states where the cost of living and doing business is far lower than New York,” Wylde told FOX Business.

She said headquarters are still based in New York, but the erosion of the workforce threatens the tax base.

“Low taxes are the biggest competitive advantage of other states, allowing financial professionals to go from giving 55% of their earnings to government in New York City to 38% in Texas or Florida,” she added.

Despite the declines, New York City remains the leader in overall banking employment, though competitors are narrowing the gap.

Wylde said stemming the losses will require significant changes.

“We have to stop the drain. The only way we can do that is we’ve got to manage our budget in a way that we control spending and control taxes and keep public safety and improve affordability,” she said during the interview.

Wylde also commented on the political climate in New York, where Assemblyman Zohran Mamdani, a democratic socialist, is considered a frontrunner in the city’s upcoming mayoral race.

“I’m trying to assure people that New York is bigger than one person,” Wylde said.

“We absolutely are going to save New York. New York is full of leaders… In the nonprofit sector, in the cultural sector, business… No one person, no one leader is a threat to New York as long as we all stick with the city.”

The data highlights a broader national trend of financial institutions expanding into lower-tax states, where the cost of doing business and living is considerably less than in New York.

For the city, the challenge remains whether it can adapt quickly enough to retain its role as the country’s economic center while facing growing competition from rising financial hubs across the nation.