05/05/2008

Not from Wall Street to Main Street?

Hello:

Economists were surprised last week when US employment numbers dropped by only approximately 1/4 of what was expected. In addition, the jobless rate, which was expected to increase, instead fell by 1/10%. Where are the massive layoffs anticipated in a garden variety economic slow down?

We have witnessed layoffs on Wall Street (and I am including the mortgage industry in this category due to what could be considered a great deal of influence in the mortgage industry from Wall Street during this economic cycle) but only limited employee downsizing in the rest of the country, let's call it Main Street. Is it still to come? Is there another unemployment shoe to drop?

I would venture to suggest that in the face of Baby Boomers retiring en masse in the next 5-10 years as they turn 60-65, employers are hesitating to send out pink slips. If companies lose key personnel now, who will they hire as the economy recovers over the next few years? High Performance/High Maintenance Millennnials (born between 1978-1994)? Those flip flop wearing, IM-ing, texting overachievers, not to mention their overprotective helicopter parents, are enough to scare any middle-aged middle manager.

So it could be, that this economic slowdown, we may see that the layoffs that happen in Wall Street may stay (for the most part) in Wall Street.

Remember, good times or bad, it is important for an organization to have a fund of 3 - 6 months expenses readily available in case of emergencies.

 

Terri G. Millson, CIMA, CIMC President

Ray Dicius, CSA, GEPC LPL Branch Manager