Wall Street mess: 40,000 jobs, $3 billion tax revenues at stake in New York

20 September 2008

The crisis on Wall Street has rocked the world, but New York stands to bear the hardest blow from the fallout as a new projection shows Wall Street's meltdown could cost New York up to 40,000 jobs and $3 billion in tax revenues over the next two years, according to two New York officials.

New York governor David Paterson had to hastily revise his earlier estimates of $1 billion revenue loss because of plummeting stock values and the need for federal bailouts in the financial sector. The new analysis has taken into account the stock market plunge, lost revenue from transactions and projected revenue loss from income tax emanating from Wall Street jobs.

Wall Street plays a vital role in the economy of New York state and provided thousands of high-paying jobs with average salaries of $280,000, generating one-fifth of the state's revenues each year and when a good amount of that money goes away, it will create huge craters in the city and state budgets.

Wall Street's employment force was 181,000 in July, which was down 11,000 from July 2007, peaking at over 200,300 in December 2000.

The state, which employs about 7.25 million in the private-sector, could lose another 30,000 jobs in the financial services industry over and above the 11,000 lost since last year, says governor Patterson.

He added that, apart from the loss of jobs on Wall Street, as many as 120,000 people might also be jobless if positions in service industries that rely on Wall Street are included.