A combination of high taxes, poor governance on the part of New York City Mayor Bill de Blasio, ever-increasing crime, capricious business and school shutdowns and a resurgence in Covid-19 cases may have contributed to Goldman Sachs considering to move a large money management division to Florida.
The absence of a state income tax, plus warm weather and a business-friendly mindset, has already prompted hedge fund billionaires and native New Yorkers Paul Singer and Carl Icahn to relocate their respective businesses to Florida.
Pre-Covid-19, Wall Street executives previously relocated thousands of jobs to states outside of New York, in an effort to cut costs. Deutsche Bank, Credit Suisse, Goldman Sachs, Morgan Stanley, Barclays, UBS, Citigroup, Alliance Bernstein and an array of other financial institutions have established and aggressively staffed hubs in Florida, North Carolina, Salt Lake City, Dallas, Nashville and other less expensive locations compared to New York.
Anyone who lives in New York—and loves the City—would also begrudgingly acknowledge that the schools, bridges, tunnels, trains, airports and hospitals are at poor levels and falling apart. The streets of New York are crowded, dirty and the weather can’t compare to the South and Southwest.
With the work-from-home trend, there is no longer the need to maintain costly Manhattan real estate. A recent study showed that at least 20% of Wall Street banks and financial services firms have thought about relocating workers to other locations outside of New York.
This trend will result in a hard hit to New York City’s budget, as the securities industry accounts for a substantial amount of tax revenue. The white-collar employees tend to earn larger salaries and bonuses compared to people in other sectors. Their departure would worsen the situation for restaurants, retail stores and other businesses that are already reeling from the effects of the pandemic.
As the disease keeps raging on, with de Blasio raising taxes and the quality of living declining, the migration out of New York City will continue unabated until there is a change of leadership.
Source: Forbes
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