A New York Nightmare

Posted In: Banking Crisis, Bankruptcies, Brokerages, Budget Deficit, Employment, Financial Sector, Financial Services, Investment Banks, Politicians, State Government, Unemployment, Wall Street

Wall Streeters and New Yorkers, you may want to skip reading the following post if you don’t want to ruin a good day. Reuters’ Joan Gralla reported Monday:

New York Gov. David Paterson on Monday said Wall Street might lay off 40,000 workers in a worst-case scenario following Lehman Brother’s bankruptcy filing and problems at other big financial firms…

New York’s banks and brokerages generate one of every five tax dollars in the state. The state’s budget is already suffering from declines on Wall Street, and Paterson last month had said that tax revenues would be hurt by declines in Wall Street bonuses.

Paterson, who got lawmakers to cut the state’s budget by more than $400 million in August in an emergency session, on Monday said he might have to recall lawmakers again, saying he would not be surprised if the deficit spiraled back up.

In addition to job cuts on Wall Street, Paterson said as many as 120,000 jobs might be cut if positions in service industries that rely on Wall Street are included…

Financial sector jobs help create as many as four other positions in services ranging from legal to sales, according to Ross DeVol, director of regional economics, for the Santa Monica, California-based Milken Institute.

Gralla also noted that:

Bankers, brokers and traders earned an average salary and bonus of $340,312 a year in 2006, according to James Brown, a labor market analyst with the state Labor Department…

Wall Street’s job force totaled 181,000 in July, which was down 11,000 from July 2007, Brown said. Employment on Wall Street peaked at 200,300 in December 2000.

Sounds like there’ll be a lot of used Maseratis for sale soon…