Big Bank Job Numbers Don’t Add Up
Merrill Lynch was handed $28 million worth in subsidies, including a $12.3 million tax break from the New York City IDA in 1997 to entice the company to conduct an expansion at the World Financial Center North in lower Manhattan. The company agreed to retain all of its 9,000 jobs and create 2,000 new jobs by June 2012. By the end of the deal, Merrill Lynch fell short of its job creation targets by nearly 6,000 jobs, and actually cut jobs. Although the deal with the NYCIDA contained a provision to “clawback” money if job creation goals were not met, the agency only recovered $379,000. It seems that according to the original agreement, they could have clawed back much more.
To top things off, Merrill Lynch recently announced they were moving from their current location into the Bank of America headquarters in midtown Manhattan. This location has benefited from a separate and more recent tax break deal of nearly $50 million. Bank of America promised to create 2,896 jobs, but has only created 352 in 8 years.
For some of the biggest, most profitable financial institutions in the world, these job creation numbers just don’t add up. New Yorkers should not be asked to pay for the richest corporations to cut jobs or move them around town.
Merrill Lynch is the wealth management division of Bank of America. Merrill Lynch is the world’s largest brokerage, with over $2.2 trillion in client assets. Merrill Lynch had $33 billion in annual sales in 2011, and the company is valued at $18.6 billion. Bank of America (BoA) is one of the world’s most profitable financial institutions. BoA made $189.4 billion in profits for the years 1996-2011. Meanwhile, a BoA bank teller wage averages $23,785/year or $11.44/hour. In 2010, BoA CEO Brian Moynihan received total pay of $10 million and a bonus of $9.5 million. BoA’s total bonuses and compensation pool for 2011 amounted to $34.4 billion. Total bonuses and compensation received by BoA’s top 5 executives in the last 10 years totals $518.8 million.
Industrial Development Agencies: Summary of Data, Office of the New York State Comptroller, at http://www.osc.state.ny.us/localgov/datanstat/findata/index_choice.htm
Bank of America Corporation, Financial data, at http://www.hoovers.com/
Report: Big Bank Bonuses in 2011, The New Bottom Line and Public Accountability Initiative, at http://www.newbottomline.com/report_big_bank_bonuses_in_2011
Bank of America is Bankrupting America, Rainforest Action Network and The New Bottom Line at http://bankruptingamerica.tumblr.com/whyboa
Big Bank Profile: Bank of America, Service Employees International Union, CTW, CLC, at http://www.seiu.org/a/profilebofa.php
PayScale: Bank of America, at http://www.payscale.com/research/US/Employer=Bank_of_America_Corp._(BOFA)/Hourly_Rate
Before the Bailout of 2008: New York City’s Experience with Tax Giveaways to Financial Giants, Good Jobs New York, February, 2009, at http://goodjobsny.org/sites/default/files/docs/gjny_bailout.pdf
NYCEDC FY2011 Project Info Spreadsheet, New York City Economic Development Corporation, available at http://www.nycedc.com/about-nycedc/financial-public-documents
Merrill Lynch to Hire 2,000 for Cash and Tax Incentives, by David M. Halbfinger, The New York Times, June 6, 1997, at http://www.nytimes.com/1997/06/06/nyregion/merrill-lynch-to-hire-2000-for-cash-and-tax-incentives.html
NYCIDA and Merrill Lynch and Co. Project Agreement, November 1, 1997, New York City Industrial Development Agency. Obtained through a FOIL request, on file at ALIGN.
New York Financial Towers Looking to Diversify, by Terry Pristin, The New York Times, July 31, 2012, at http://www.nytimes.com/2012/08/01/realestate/commercial/world-financial-center-undergoes-makeover.html?_r=1&adxnnl=1&pagewanted=all&adxnnlx=1344002926-EsCGF/5Yf0YXV9wBy6HW7A
Press Release, New York City Mayor Bloomberg, News from the Blue Room, PR- 211-04, August 2, 2004, at http://www.nyc.gov/portal/site/nycgov/menuitem.c0935b9a57bb4ef3daf2f1c701c789a0/index.jsp?pageID=mayor_press_release&catID=1194&doc_name=http%3A%2F%2Fwww.nyc.gov%2Fhtml%2Fom%2Fhtml%2F2004b%2Fpr211-04.html&cc=unused1978&rc=1194&ndi=1
New York Daily News: Watchdog group Getting Our Money’s Worth Coalition protest tax breaks for Merrill Lynch
August 16, 2012. A watchdog group is rolling out a new public awareness campaign to highlight corporate welfare gone wrong — starting with tax breaks for Merrill Lynch that failed to create jobs. The labor-backed Getting Our Money’s Worth Coalition launched the Corporate Tax Dodgers Hall of Shame campaign with a website this week and will “induct” Merrill Lynch during a protest Friday in midtown Manhattan.
WBAI Radio: Corporate Tax Dodgers Hall of Shame
August 15, 2012. For years corporations in New York State have gotten huge tax breaks for promising to create new jobs. But a new website, GettingOurMoney’sWorth.org, shows that these same corporations hardly ever create the promised jobs. WBAI’s Andrea Sears speaks with Natalie Alegre of ALIGN, the Alliance for a Greater New York, and a lead organizer of the Getting Our Money’s Worth Campaign. Continue reading