Not surprisingly, when a person goes from making $750k as a bond trader, to $60k as a high school teacher, their spending habits change.
That is the obvious but nonetheless interesting point of a Bloomberg article on the impact of Wall Street’s meltdown beyond lost finance jobs. The net result is less business, revenue and jobs for everyone in NY from deli owners to dry cleaners to suburban lawn cutters.
“In New York City alone, bonuses fell to $18.4 billion last year from $32.9 billion in 2007, the largest absolute drop ever, according to the state comptroller’s office.
The consumer discretionary and industrial sectors — dependent on people who buy refrigerators, restaurant meals or cars — are the only areas that have shrunk more than finance, with 383,340 and 270,278 job losses, according to the data. For each finance post eliminated, 3.3 in other industries will vanish, the comptroller’s office estimated.”
Bear Stearns to Algebra I Means Lost Dollars in Trickle-Down
Bloomberg, May 22 2009