Jul

24

I have a lot of friends on Wall Street who are losing their jobs and/or are concerned they will lose their jobs imminently. Most of these people are 30-50 and have financial responsibilities, wives, kids, etc. Most seem to hang on and try to find jobs but the time to find work has been growing and growing and hearing someone is out of work for 12 or more months isn't that shocking anymore. The business is shrinking. Regulation is expanding. Jobs are scarce. Qualified applicants are plentiful. Incomes are dropping. Technology is replacing the need for people. Arguing the financial industry is in a jobs depression is not that far fetched. Reports are that for every opening there are thousands of applicants.

What do you think? Will the industry rebound or is this the end of Wall Street as we have known it. How does this jobs environment compare to the 70s recession or before, were those times equally as daunting? What are alternatives for people who are forced out of the business?

David Lilienfeld writes: 

Are you sure you're not talking about the 1930s? or perhaps the 1970s? Or the 1890s? or the 1850s? (See the pattern here?) There will always be a need for financial services in a capitalistic economy. The problem these bankers are having is that given the oversupply of them (or relative lack of demand, if you prefer), and given their lack of wealth creation in the society (industry creates wealth, services create QoL), I don't see where the problem is. Financial services is overstaffed the same way retail is. 7/11s and digging graves sounds like it has more value-add. Maybe they'd like to work picking crops in central California? I understand that since the crackdown on the border took hold, the San Joaquin Valley farms are short-handed. The wages aren't great, the sun's a bitch, and occupational hazards abound, but there are jobs, and those holding them do get paid. But I grant you, it's hard to pay for a Porsche SUV on a farm-picker's wage.

Leo Jia writes: 

Perhaps I can offer some sort of soothing message.

They at least have some very good unemployment benefits.

I remember years ago (perhaps the same now) the state regulation on the unemployment benefit for all domestic people working at so-called "wholly foreign owned enterprises" (WFOE's) in China is as follows. All of one's personnel issues are registered at one of the state-owned so-called "personnel management companies". The company withholds a certain percentage from the employee's salary every month. By regulation, the unemployment benefits it offers to the employee are: 1) it first tries to find a job for the person if unemployed; 2) if no job can be found, it pays the person certain percentage of his original salary (for 3 months?); and 3) if one doesn't want to take the job it finds, then no unemployment payment. Sounds not too bad. But the key is the job it find you. It literally could be a street sweeping job, and they always find one for you. 

Dan Grossman writes:

A person knowledgeable about business (and as talented as most finance professionals seem to regard themselves) can think of a needed product or service and start his own business to provide same. I am always surprised how few do, even after many months of unemployment.

Or, instead of just "looking for a job", a person with such background and talent should think of the way he could bring new or significantly increased profits to an existing business, large or small. And then go to that business with a proposal that he be engaged (whether as an employee or at-risk contractor) to bring about those new or significantly increased profits. As a business owner, I would be very interested in such a proposal, far more interested than in "giving someone a job".


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