The news that many evil bankers are fleeing New York City, pink slips in hand, will surely cheer the Occupy Wall Street crowd . But Salt Lake City has even more reason to be happy about this turn of events.
Reuters reports that Goldman Sachs is planning to add 300 new employees to its already growing office in the Utah state capital—and these new hires will earn at least 150 percent of the average local salary. Of course, Goldman isn’t doing this out of the goodness of its heart. The state government, seizing the opportunity to boost the city’s economy, has offered it millions of dollars in tax breaks to expand its operations there. Even without those incentives, the move arguably makes economic sense for the firm.
This is big news, going far beyond a few hundred bankers, Salt Lake City, or the Occupy encampments in New York. As we’ve noted, when bankers hurt, New York hurts. Sky-high salaries and bonuses in the financial sector have generated justified indignation, but they have also provided a significant chunk of city and state tax revenues. Without that money, it is hard to see how New York can continue to pay for the bloated blue institutions on which so many of the city’s poor and middle income workers rely.
In the ongoing aftermath of the financial crisis, Wall Street is already shrinking on its own, without any outside help. But as other cash-strapped states catch on to this fact and lay out the welcome mat for disgraced firms, the drain may accelerate accelerate.
Manhattan’s loss is Salt Lake City’s gain.