Bad for Wall Street, bad for New York

Amy Scott Oct 4, 2007

TEXT OF STORY

Scott Jagow: They won’t be talking about gigantic bonuses on Wall Street this holiday season, that’s for sure. A lot of people will be lucky to have a job.

The job losses are mounting by the day, thanks to the mortgage meltdown. This week, Bear Stearns, Credit Suisse and Morgan Stanley announced cuts. Wall Street’s now up to 130,000 layoffs for the year — that’s four times as many as last year. And a new report says things are only gonna get worse. Here’s Amy Scott.


Amy Scott: A report by the Manhattan Institute says each time the ax falls on Wall Street, other industries in New York City take an even bigger blow.

Nicole Gelinas is a fellow at the public policy think tank:

Nicole Gelinas: What happens is that these well-paid jobs create so much demand in New York City’s local economy that the state’s comptroller estimates that each of these jobs creates two additional jobs outside of Wall Street.

So far, many of the layoffs have affected jobs outside New York. UBS recently let go of 200 back-office workers in Weehawken, New Jersey.

But Gelinas says it’s just a matter of time before losses from the credit crunch hit brokerage and investment banking jobs in New York. Wall Street bonuses are projected to take a dive this year. They’ve been a major driver of the local real estate boom.

The report says without a Wall Street or housing miracle, the city faces a deficit of 5 percent or more of its budget this year.

In New York, I’m Amy Scott for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.