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Wednesday, September 17, 2008


40,000 New York Jobs Could Be Lost, Says Governor

According to state Governor David Paterson, as many as 40,000 New York jobs on Wall Street could be lost as a result of issues in the state’s financial activities industry.

The problems he discussed at a recent news conference included Lehman Brother’s filing for Chapter 11 bankruptcy and Bank of America’s purchase of Merrill Lynch at a drastically lower price than the it company was valued at this time last year. On top of this insurer American International Group is suffering from lack of funds.

In hopes of saving AIG, Paterson announced a plan that will enable the insurer to transfer money from it’s subsidiaries to the parent company in New York, thus creating a type of bridge loan. Altogether AIG is expected to use $20 billion of its own capital to protect itself from more problems and help to keep New York jobs safe.

If the Governor’s worst case scenario comes true, the 40,000 Wall Street jobs wouldn’t be the only employment opportunities the state losses. According to his estimation, there are as many as 120,000 jobs that are dependent on Wall Street that could be effected. According to Ross DeVol, who is the director of regional economics for the Milken Institute based in Santa Monica, California, these positions range from everything from sales to legal positions.

Paterson says that AIG currently employs 8,500 people in the state, 6,000 of which work in in New York City. The recently purchased Merrill Lynch has 60,000 employees world wide and the bankrupted Lehman Brothers has somewhere around 26,000 individuals on their payroll.

According to New York City officials, the money received by Wall Street workers equals nearly 35 percent of all of the salaries and wages earned in the city. James Brown, who is a labor market analyst for the state Labor Department, told Reuters that bankers, brokers and traders earn an average salary combined with bonuses of $340,312 a year as of 2006. He went on to say that Wall Street’s entire workforce was 181,000 this July. This figure was down by 11,000 jobs when compared to the same month in 2007. The most individuals ever employed on Wall Street was in December 2000, when 200,3000 people worked there.


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