The way people talk about unemployment, it’s as though it were a form of death. Lose your job and off you go into the abyss of hopelessness. In the real world, of course, people adjust to new circumstances, and in some cases, emerge happier and healthier for the change. Such is the experience of Guy Irace, a former trader for Bear Stearns. When he lost his job, the best he could do was to fill in for a math teacher at a school out on Long Island. It paid squat, and he had to pack his own lunch. Not so long ago, he used to keep an apartment near Gramercy Park and attend Knicks games all the time. Now he stays in most nights to grade homework. But you know what? He doesn’t really miss his former life. In fact, Irace enjoys his new job and has no plans to return to Wall Street. Also, he lost 40 pounds!
Of course, there are other businesses that used to rely on guys like Irace spending their vast quantities of discretionary income, and they have to adjust also. So the deli near the former Bear Stearns building had to appeal to their landlord to shave $4,000 off the monthly rent, and they also cut their food order by a third. The good times aren’t exactly rolling, but it’s far from a nightmare.
In 2007, the financial industry paid $32.4 billion in bonuses. That dropped to $18.2 billion in 2008. Where it will be in 2009 is hard to say, but it’s going to be well above zero, more than enough for plenty of smart business owners to to do well, provided they aren’t counting on a snapback to 2007.
And with that, we’re out until Tuesday. Happy Memorial Day!