It's stunning to see just how many people are put out of work when one of these Wall Street titans collapses. The numbers can look like the populations of small towns. In some cases, the companies are bigger. Lehman Brothers had 28,600 employees in 2007. That compares to 28,351 people in Jackson, Wyoming, 21,296 in Hood River, Oregon, and 13,227 in Ketchikan, Alaska. If Lehman Bros. was its own micropolitan statistical area, it would be the 100th largest in the U.S.
Merrill Lynch, being bought out by Bank of America, is estimated to have some 64,000 employees (437 American towns have fewer residents). How many of those will still be employed after the dust settles is unclear. If the Bear Stearns buyout is any indicator, though, more than half the Merrill Lynch workforce will be pounding the pavements soon. That's on top of some 83,000 former bank and brokerage employees who've been laid off already.
Bank of America, Merrill's new boss, already has a payroll more than triple the size, with 210,000 employees. They're bigger than Springfield, Illinois (pop. 207,361), Gainesville, Georgia (180,175) and Bangor, Maine (148,784).
AIG, rumored to be next in line for collapse, has 116,000 employees. Washington Mutual, another big bank at risk, comes in at 49,403 employees.
All this at a time when funding for our nation's workforce development system is being cut. Sure, some of these folks will be able to land jobs on their own. But not all of the people losing jobs are high flying MBA-trained traders. A lot of blue and pink collar workers will join the ranks of job hunters. That's not even counting the ripple effect through the rest of the economy.
If an entire American town were to go under, would the feds step in to help? If so, would they offer more than rapid response services?
Are we about to see a major restructuring of the American economy? Financial services has been promoted heavily as a high-growth job generator. As people leave that industry, what new jobs will they train for? And will we in the workforce system be ready?
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