New York faces the loss of $1 trillion in wealth as a number of businesses have left the state in recent years. The news comes as a number of finance firms have left the Empire State for a number of other states, including Florida.
A recent survey found that New York has lost almost 1600 Wall Street firms since the end of 2019. The exits have cost the local economy $993 billion.
Among the firms to have left is Icahn Capital Management, which exited Manhattan for Miami in 2020. The loss of the company cost the New York economy more than $22 billion in assets.
Furthermore, Elliott Management also left New York City for West Palm Beach, Florida, bringing nearly $60 billion in assets with it.
Another management firm, ARK Investment Management, brought nearly $25 billion in assets to St. Petersburg, Florida.
All in all, more than 50 such firms have left the state for Florida. Other businesses left for a number of other states including Texas, North Carolina and South Carolina.
New York and California each lose $1 trillion due to the exodus of financial firms
— VOZ (@Voz_US) August 23, 2023
The loss of financial firms presents a difficult economic situation due to the large influence Wall Street plays in New York’s economy. Overall, the finance sector represented about 16% of New York City’s economy and more than 7% of the statewide total. This is significantly larger than the average in other states.
The state lost tax revenue and employment as well as wealth due to the businesses leaving. Overall, the has lost almost a third of its finance positions as an average of statewide jobs since 1990. Many of these jobs have also traveled southward, especially to Goldman Sachs’ planned new campus in Dallas, Texas.
The Empire State was not alone in losing capital to other more tax-friendly states. California also lost approximately $1 trillion in wealth in recent years as businesses move out, especially to Florida. Illinois also saw significant losses during the same period, including the migration of the hedge fund Citadel to Florida.
California saw Charles Shwab move its headquarters from San Francisco to Texas in 2020. The financial firm now operates a $100 million headquarters in the Lone Star State.