I participated in a cognitive technologies conference a few days after the November 8 election, and much of the talk at breaks (and some on the stage) was about the election results and the reasons behind them. There was a general feeling that the “Rust Belt” had been largely responsible for Donald Trump’s victory, and a growing, if belated, understanding of the economic plight of some citizens from that Midwestern region.
Some conference participants were concerned that this beleaguered region might grow. In fact, one attendee — an old friend who strategizes about technology for a big New York bank — commented that perhaps Wall Street would become “the new Rust Belt.” His concern was that automation of the finance industry would hollow out jobs in that field in the same way that robotics and other technologies have reduced manufacturing employment.
This is a sobering prospect, but there is plenty of evidence that it’s a real possibility. Key aspects of the finance industry have already been automated to a substantial degree. Jobs in the New York finance field have been declining for several years. According to data from research firm Coalition Ltd., more than 10,000 “front-office producer” jobs have been lost within the top 10 banks since 2011. Coalition also suggests that global fixed-income headcount has fallen 31% since 2011.
Floor trader, of course, has long been the archetypal job on stock exchanges. But there are precious few left of them. As the Financial Times notes, in 2000 there were over 5,500 floor traders on the New York Stock Exchange; now there are fewer than 400. Many of the remaining traders work only part-time. Most trading jobs have been taken over by servers running trading algorithms.
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