(MENAFN) Despite the imposing skyscrapers of financial titans along Wall Street, New York City is confronting a subtle decline in its financial dominance.

Experts describe this trend as "definancialization," a shift that endangers the city’s welfare programs, funded by high taxes, while attracting employment opportunities and affluent individuals to other regions.

The proportion of city employees working in finance and insurance has dropped from 11.5% in 1990 to just 7.7% as of August 2025.

This analysis, conducted by a media outlet using official data from multiple sources, highlights the shrinking influence of finance in the city’s labor market.

Of the 233,000 finance positions created across the United States over the past five years, New York State secured only 19,000. This lags behind states such as Texas, Florida, North Carolina, and Georgia. Even JPMorgan, with its iconic tower in New York, employs more staff in Texas than in the city itself.
Kathryn Wylde, president of the business organization Partnership for New York City, attributes the decline to a "double-whammy" of high costs and taxation.

New York State’s 7.25% corporate income tax, combined with the city’s additional tax and a regional transit surcharge, can push local business tax rates above 18%, creating a strong incentive for relocation.

Moreover, stringent regulations — including requirements for independent audits of AI hiring tools and prohibitions on asking about criminal or salary history — add further financial burdens, encouraging firms to move operations elsewhere.

Global investment firm Goldman Sachs has directed managers toward Dallas and Salt Lake City, while Morgan Stanley now ranks as the largest employer in Alpharetta, Georgia, a suburb of Atlanta.

In July, Citigroup announced plans to hire 510 new staff in Charlotte, North Carolina, signaling a continued shift of financial jobs away from New York City.

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