Wall Street Issues Effect New Jersey Jobs

Although New Jersey jobs will be lost due to the most recent problems on Wall Street, officials expect that the state’s economy will fair better than many others. According to Governor Jon Corzine, a third of New Jersey’s economy is dependent on Wall Street either directly or indirectly, but others believe the employment situation is somewhat more stable.

“I’m worried about the state budget, the state economy in the context of the very dramatic restructuring that is taking place on Wall Street,” Corzine said at an appearance in Ewing Township. “The northern half of the state, there are many, many people who are involved with that industry. That’s one of the reasons you have high level of income in the state.”

With 1,700 New Jersey residents employed by Lehman Brothers and an unknown number working for Merrill Lynch, state Treasurer David Rousseau said that the economy will take a hit. Despite this, he believes that New Jersey’s diversified assets will protect the state from being hurt too badly.

“We have exposure to every sector; when financial stocks suffer the most severe shocks in decades, we will lose market value in that sector,” said Rousseau. “While we owned a small position in Lehman Brothers, we note as well that New Jersey, unlike most peers, completely avoided exposure to market losses because we did not own any Freddie or Fannie common stock when they were seized by the U.S. Treasury.”

Fewer New Jersey jobs isn’t the only problem that may arise from Wall Street’s latest problem. Joseph Seneca, who is an economics professor at Rutgers University, says that the merger of Bank of America and Merrill Lynch and Lehman Brothers bankruptcy could also cause more credit issues, which would in turn make it more difficult for companies and individuals to borrow money.