Has the financial sector fully recovered from the Great Recession?

So says NYT financial columnist Neil Irwin.  The evidence:

• Employment has returned to 2007 levels
• The pay gap between financial services and the rest of the economy has recovered; it is now a 3.6:1 ratio!
• Entry level pay for Ivy League grads at investment banks went from $70k to $85k this spring
• Vacancy rates at prime Wall St real estate are down to 5%

This is obviously good news for those with aspirations of working in this sector.  But is it good news or bad news for the economy?  The article cites research by economists at the Brandeis, Chicago and NYU b-schools which suggests that the size of the financial services sector does not appear correlated with economic performance.  Financial markets are supposed to reallocate capital to firms with profit-making opportunity from those that are tapped-out.  In theory this should lead to increased productivity, but in practice the data show that a large financial sector leads to weaker productivity growth.  

One fear is that the recent rebound in employment is associated with regulatory compliance in an industry that now bears a more than striking resemblance to a public utility, thanks to Dodd-Frank.  If so, then the allocation of more resources to financial services should be lamented, not cheered.  

Near-sourcing finance jobs

Front pager in today's NYT about the growing trend in the financial services industry to near-source jobs out of New York City to places like Raleigh and Jacksonville.  This may be news to NYT, but it old hat to all of the Credit Suisse and Fidelity employees in NC State's MBA program.  Firms are moving functions that do not require a physical presence in NYC, especially those that are not client-facing.  NYT calls this a threat to "the vast middle tier of positions that form the backbone of employment on Wall Street."

Why the shift?  The article cites lower labor, land, and tax costs in NC and Florida.  Firms may be looking to move even more work out of NYC in the coming years to offset the regulatory burden of Dodd-Frank.  

What has happened to MBA jobs after the financial crisis?

Guess what, not only is Lehman Brothers gone, but CitiGroup, BofA, Goldman Sachs, and Morgan Stanley all have cut back as well according to this BW article.  Many of the remaining finance jobs are in corporate arena or private wealth management (where selling skills may trump CAPM skills). 

Employers who have helped picked up the slack include Apple, Amazon, and IBM.  Fuqua's Director of Career Services Sheryle Dirks also notes many new firms have showed up at her office including the FBI and local school systems.