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Financial Services Employment Still Under 2008 Levels in 90 Percent of States

Employment prospects in the financial services industry tanked in the wake of the crisis in the financial sector several years ago and during the severe recession that followed. According to the U.S. Bureau of Labor Statistics, the number of jobs in the U.S. financial services industry so far has yet to recover to 2008 levels.

In late March, the Bureau reported that 45 states and the District of Columbia still had fewer people employed in the financial services sector as of January than they did four years earlier in January 2008. Of the few states with net increases – Louisiana, North Dakota, Texas and Nebraska – only one, Texas, is a sizeable player in the financial services industry. And the increases are meager, too; all four states combined had an aggregate net increase of only 4,600 jobs.

The state of Alaska alone had no net change in its number of financial services employees, and all remaining states, along with the nation’s capital, showed reductions compared to 2008 that ranged from about 2 percent to almost 18 percent.

The financial services employment sector includes people in a wide variety of occupations working for companies that range from large banks, brokerages and insurance companies to smaller accounting and tax preparation firms. The sector employs millions of people in the United States, particularly in the Northeast.

Comparing the number of financial jobs in January 2008 to January of this year, the Bureau of Labor Statistics found that California experienced the largest loss, with a net reduction of more than 100,000 financial jobs over the four-year period. In percentage terms, the Golden State suffered the third-highest reduction, losing nearly 12 percent of its financial jobs. The only states to experience a higher percentage reduction in financial services employment were Washington, down slightly more than 12 percent compared to 2008, and Nevada, with a whopping loss of almost 18 percent.

In raw number terms, no other state can even compare to California’s financial sector employment losses over the last four years. The second-biggest loser, Florida, shed just under 55,000 financial services employees since 2008. Other states bearing the brunt of the losses included traditional financial services centers such as New York, Illinois, New Jersey, Pennsylvania and Massachusetts.

According to The Business Journals online, three states count on financial services activity for 10 percent or more of all their private-sector jobs – New York, Connecticut (the nation’s insurance capital) and Delaware (home to credit card giant FIA Card Services). Compared to 2008, Connecticut lost 8 percent of its financial services jobs while Delaware’s lost nearly 6 percent.

Business consultants don’t think that the shakeout in the financial services sector will be over any time soon. Last year, financial services companies worldwide announced plans to trim their payrolls by a combined total of about 200,000 employees during 2012 and 2013, according to Bloomberg News. Four large companies alone have plans to cut a total of about 80,000 jobs as financial reporting from the sector continues to bring dismal news such as severe earnings shortfalls.

In challenging economic times, Padgett Business Services® is an ally of small businesses across all of the U.S. and Canada. With more than 400 offices in North America, we help small business owners with specialized bookkeeping, payroll and business tax services.