Cash-poor Street can affect city, study says

Wall Street’s recent round of layoffs could ripple through the rest of New York City, impacting jobs and tax revenue, according to a report from the Manhattan Institute. A cash-rich Wall Street creates jobs and revenue for the rest of New York City – but a cash-poor Street will likely have the opposite effect. If Wall Street were to lose 10,000 jobs, some 20,000 posts across the city will be eliminated, according to the Manhattan Institute’s report “Market, Economic Turmoil May Finally Bust Up New York’s Record Tax Boom.” The study also notes that the city faces a potential 5% deficit of city-funded spending next year, and a 7% to 12% deficit of city-funded spending the year after. Between 2003 and late 2006, the 20,000 jobs that were created on Wall Street spawned 40,000 other jobs throughout the city. As Bear Stearns and Morgan Stanley report dismal quarterly earnings figures, with profits falling 61% and 17%, respectively, workers on the Street will probably lose a few zeroes on their bonuses this year, the report found. Last year’s bonuses hit a record of $24 million, and as the employees spent their money, they generated $500 million in taxes for the city. Both firms, along with Credit Suisse and Lehman Brothers, have announced numerous layoffs in recent weeks.