Wall Street's Crisis Wipes Out Jobs and Pay on Main Street

Discussion in 'Wall St. News' started by ByLoSellHi, May 22, 2009.

  1. Wall Street's Crisis Wipes Out Jobs and Pay on Main Street

    The contraction in the financial industry may erase $185 billion in wages and profits, or $600 for every man, woman and child in the U.S.

    The trail of reduced income affects car mechanics, waiters, sports teams, small shopowners and many other businesses.




    By Peter Robison

    May 22 (Bloomberg) --
    After former Bear Stearns Cos. trader Guy Irace lost his job on the bond desk a year ago, he moved back to Long Island to teach high school math and dropped 40 pounds. Jack Yang’s deli in Manhattan cut three employees.

    Cavonberry’s, Yang’s 46th Street shop near the headquarters of the New York firm taken over by JPMorgan Chase & Co., once bustled with finance workers jostling to buy a barbeque chicken chopped salad and bottled water for $12. “They used to be turning them away at the door,” Irace said.

    Last week, slow enough that one cashier instead of the usual two operated the register at midday, Yang tallied up the ripple effect of the financial slump that cost Bear Stearns its independence: He negotiated a $4,000 monthly decrease in rent with Sierra Realty Corp., to $17,000, and is spending 35 percent less a week with Fischer Foods of New York Inc. for such things as artichokes and ham.

    “Since January, everything’s dead,” said Yang, 52.

    The biggest Wall Street crisis since the Great Depression isn’t just a setback for New York or bankers. The finance industry’s contraction may wipe out $185 billion in wages and profits, or $600 for every man, woman and child in the U.S., according to Thomas Philippon, a finance professor at New York University’s Stern School of Business. The trail of reduced income affects car mechanics, waiters, sports teams, hair stylists, jewelers, housecleaners and watch repair shops.

    Largest Absolute Drop

    “We’re seeing lots of lives derailed,” said Simon Johnson, professor of entrepreneurship at the Massachusetts Institute of Technology.

    Irace, who worked at Bear Stearns for 19 years and is now a teacher in Uniondale, New York, is one of 255,441 people who’ve lost U.S. finance jobs since January 2008, according to data compiled by Bloomberg. Thousands more have seen cutbacks in pay....

    -MORE- http://www.bloomberg.com/apps/news?pid=20601109&sid=aQJzd0DkdWuQ&refer=home
     
  2. Jack Yang's NYC can't be the same one surf inhabits, can it?
     
  3. Let them be homeless, I can't care less.

    They should all have been jailed for ripping off innocent people in the first place. Goldman Sachs is the #1 mob in the world if you ask me.