Wall Street employee bonuses dip 44%; NY tax revenues hit

The deepening financial crisis has hit employees of Wall Street, whose yearly bonuses were down 44 per cent last year. That, in turn, hit the New York state, which is estimated to lose $1 billion in tax revenues.

A report issued by State Comptroller Thomas DiNapoli yesterday showed that New York City employees' bonuses last year were $18.4 billion, down from $33 billion in 2007.

The decline will cost New York City $275 million, he said.

Besides, media reports have said several restaurants, which catered to Wall Street, too are feeling the pinch and even high-end ones are reducing their prices, cutting items and offering special to entice customers.

"The securities industry has already lost tens of thousands of jobs, and the industry is still continuing to write off toxic assets," DiNapoli said, projecting another painful year for the industry.

The decline, analysts say, is the largest percentage decline in more than 30 years.

Some analysts say that the companies cannot simply do away with bonuses if they are to retain talent but others do not agree, arguing that the employees would have nowhere else to go as the job market is already very tight.

The New York State used to get 20 per cent of its revenue from income tax collected from Wall Street and the city 20 per cent before the market meltdown.