The financial tsunami that started on Wall Street 15 months ago has become a global crisis. Wall Street titans like Lehman Brothers, Merrill Lynch, American Insurance Group (AIG) and many others collapsed like a house of cards. The crisis is taking its toll on financial firms leaving many people out of work and many more uncertain whether they will lose their jobs or not in the coming months. It is likely to have an adverse impact on the job market as financial markets in the US are weakening even before the historic meltdown of the last couple of weeks. According to US government estimates so far, more than 600,000 jobs have already been lost this year and there are currently over 9.4 million people looking for work in the US. While the prospects for job seekers are looking dimmer day by day. The US government $700 bn (7% of US GDP) bailout of the financial system has brought a ray of hope to workers that it may signal at least the end of the beginning of the credit crunch.
However, employees are still deeply worried about the looming uncertainty in their jobs. A survey by Employment Law Alliance found that more than half of American workers were worried about whether they would be able to find a new job if they become unemployed. As banks get tough on lending, companies are finding it harder to get financing, which could hinder their growth and lead to more lay-offs in the near future. This, in turn, compels consumers to curtail their spending, slowing down the economic activity even more. Meanwhile, the crisis is not only affecting those who have lost their jobs but also fresh recruitment. |
