Wall Street may lose 36,000 jobs

By Joan Gralla

NEW YORK (Reuters) - Wall Street, the lifeblood of New York City's economy, could lose over 36,000 jobs because the financial credit crisis has rocked markets and stunned the U.S. economy, estimated James Brown, a labor market analyst with New York state's labor department.

"History suggests it's going to be something of that magnitude," Brown told Reuters, noting Wall Street employment peaked at 200,300 in December 2000, nine months before the September 11, 2001 air attacks.

Losing one in five jobs on Wall Street could have dire consequences for the city's economy.

Brown's estimate was almost double the 20,000 job loss over the next two years that the city's Independent Budget Office forecast in March.

At the end of last month, there were 182,300 people working at banks and brokerages, down more than 5,000 jobs since September. The smaller scope of the layoffs seen so far, however, likely reflects the lag between the end of severance payments and when job hunters file for unemployment benefits, Brown explained.

Unlike much of the nation, layoffs and falling profits on Wall Street pose a bigger risk to New York City's economy than the housing-led downturn that threatens the nation, according to economists and Mayor Michael Bloomberg.

Bankers, brokers and traders earned an average salary and bonus of $340,312 a year in 2006, Brown said.

Wall Street's total compensation amounts to almost 35 percent of all salaries and wages earned in the city, according to city officials. The taxes that Wall Street's denizens and their employers pay mean the city's finances mirror this sector's roller-coaster cycles.