Wall Street is no longer New York City’s biggest job engine.
The city counted on the finance sector to fuel economic growth during recoveries and expansions in the past, New York Federal Reserve President William Dudley said in a speech on Thursday.
But it has lost that throne to Silicon Alley.
“One that is especially noteworthy is the City’s burgeoning technology sector, which has been creating jobs in industries such as internet publishing, online shopping, and scientific research and development,” Dudley said.
“Growth in these high-paying jobs is picking up much of the slack created by the softness of the securities industry.”
Since peaking in the 1990s, finance jobs in New York City have steadily declined, according to the Bureau of Labor Statistics.
And more recently, financial volatility in the first quarter of 2016 — the worst period for investment banking since the recession — triggered layoffs at firms from Goldman Sachs to Deutsche Bank.
Dudley told reporters that the financial sector may have “overexpanded and overheated” leading up to the financial crisis, according to Bloomberg. Tighter regulation of the industry to prevent another crash is hurting Wall Street’s profits, he said.
Dudley noted that overall job growth in New York City has helped surrounding areas like Long Island and New Jersey. But some parts of New York state, particularly the manufacturing-heavy city of Binghamton, have not meaningfully recovered since the Great Recession.