Cigar Weekly

All told, Wall Street firms, which employ about 178,000 people in the city, have announced thousands of layoffs in the last year. One of the seven largest financial companies in the city, Bear Stearns, nearly failed in March before it was acquired by JPMorgan Chase& Company.

It is already clear that employees whose jobs survive the deep cutbacks will, as a group, take home much less money than they did last year or the year before. The latest financial statements from the remaining six of the seven largest firms show that their compensation costs declined by a total of $9.5 billion in the first half of this year, compared with the first half of 2007. Along with JPMorgan Chase, they are Citigroup Incorporated, Goldman Sachs, Morgan Stanley, Merrill Lynch and Lehman Brothers.

Analysts familiar with those companies said the cuts so far implied an aggregate decline in pay and benefits, including bonuses, of more than $18 billion for the full year. About half of that amount would have gone to people employed in New York City, they said.

The impact on the state and city budgets is likely to be severe because the financial-services industry provides almost one-fourth of all income earned in the city. That pay accounts for about 10 percent of the city's tax revenue and about 20 percent of the state's, said Kenneth B. Bleiwas, deputy state comptroller for New York City.

''One of the things that highly compensated people do is they spend money,'' Mr. Bleiwas said. ''So when Wall Street suffers, the pain ripples through the rest of the economy.''

The impending decrease in the personal income of so many New York-area residents, Mr. Bleiwas said, ''is a significant reduction which will affect not only state and city coffers but also have a direct impact on other sectors.'' He said the jobs on Wall Street pay so well that on average, each one spawns two jobs in other fields in the city and a third in the surrounding region.

The state's budget department estimated that the projected decline in bonuses would reduce state tax revenue by about $700 million this fiscal year, which ends March 31, said Jeffrey Gordon, a spokesman for the department.

The city comptroller's office is forecasting a drop in bonuses this year ''in excess of 30 percent,'' according to Frank Braconi, the chief economist in the comptroller's office. That would amount to a decline of about $10 billion, based on the $33 billion that the state comptroller estimated was paid out in Wall Street bonuses in each of the last two years.

Marcia J. Van Wagner, the deputy city comptroller, said the steep decline in pay on Wall Street brought an end to a period when the city's growth outpaced the nation's.

''The local economy was propelled longer by the fact that there's been such enormous bonuses,'' Ms. Van Wagner said. ''There was a lot of income kind of zinging around the local economy and keeping us afloat.''

Ms. Van Wagner described her outlook for the city economy as ''gloomy but not bleak.'' But some compensation consultants said they were beginning to think their forecasts had not been bleak enough.

Alan Johnson, who as president of Johnson Associates has tracked pay on Wall Street for more than 20 years, said he had been expecting a decline in bonuses of 30 percent to 40 percent this year. But lately, he said, the debate among his colleagues has been: ''Is it actually going to get even worse?''

With a steadily spreading credit crisis, Wall Street executives are no longer hoping for a rebound this year, Mr. Johnson said. Nor are they worrying about competitors hiring away their best employees, as they still were when they paid out surprisingly large bonuses at the end of last year, he added.

Chris Marcello, who uses complex formulas to trade large investments, said he got a preview of the pay drought on Wall Street at the end of last year, when he received a ''token'' bonus of $1,000 from his boss at Bear Stearns. After Bear nearly collapsed, Mr. Marcello, 35, found work at a smaller firm downtown, which pays him monthly bonuses of $1,000 or $2,000, he said.

For traders accustomed to receiving bonuses of as much as $500,000, the ramifications of the pay cuts are ''huge,'' Mr. Marcello said. ''That's the base of most people's compensation.''

Down the street at William Barthman, a jewelry boutique that has served the financial district since 1884, the manager, Joel Kopel, lamented the loss of customers.

''The top market is fine. Upper-end people can still afford their Rolexes,'' Mr. Kopel said. The marked drop-off has come in sales of items priced between $500 and $2,500, which he described as midrange.

Gesturing toward the luxury-goods stores lining Wall Street, John Russo, who has worked in commercial insurance for 35 years, said the steep fall in pay was bound to cause disruption in the financial district.

''Look across the street: BMW, Tumi luggage, apartments,'' Mr. Russo said. ''When things get bad, the moving trucks come.''