In a groundbreaking move, JPMorgan Chase (JPM) is constructing a massive headquarters in midtown Manhattan, yet it’s Texas, not New York, where the bank now employs the most people, with 31,500 employees. The Lone Star State’s rise in finance employment has seen it surpass New York for the first time in a 33-year period, with Texas boasting 384,900 banking-related workers in December 2023, edging out New York by a margin of 100.
The shift in finance employment from New York to Texas is part of a broader trend observed in the banking sector. Factors such as Texas’ lack of income tax, lower cost of living, ample building sites, and convenient transportation access have made it an attractive destination for financial giants seeking to optimize their workforce.
Financial institutions are capitalizing on the cost savings associated with relocating employees to Texas. While there’s a 10-15% pay discount for financial workers in Dallas compared to New York, the lower cost of living in Dallas, which is 55% less than Manhattan, makes the move financially advantageous, especially for junior, clerical, or back-office positions.
The emergence of Texas as a banking center has been decades in the making, accelerated by the post-9/11 shift of financial institutions looking to cut costs and manage risks. Dallas, in particular, has become a hub for finance giants attracted by the state’s business-friendly environment.
Major banks, including Goldman Sachs, Bank of America, and Wells Fargo, are investing in new campuses or headquarters in the Dallas area, contributing to the state’s status as a burgeoning finance hub. However, operating in Texas comes with challenges, such as state-level efforts to restrict certain banks based on their policies.
Despite potential hurdles, financial leaders like JPMorgan Chase’s CEO Jamie Dimon appreciate the business-friendly environment in Texas but caution against potential pitfalls, urging the state not to become like Washington, D.C. Talks on the matter have yet to yield an agreement, with negotiations scheduled for the coming weeks.
