Election Section

Fallout from attacks expected to obliterate 1.6 million jobs

By Simon Avery The Associated Press
Friday January 11, 2002

LOS ANGELES — The Sept. 11 attacks will obliterate an estimated 1.6 million jobs in major U.S. cities this year, a new study says. 

The losses will spread across industries, from tourism and dining to aerospace and financial services, according to a report to be released Friday by the Milken Institute, an economic think-tank in Santa Monica. 

New York City will lose nearly 150,000 jobs, more than any other city. Los Angeles will rank second with 69,000 positions lost. Chicago, in third place, is projected to lose more than 68,000 jobs. 

“The consequences of Sept. 11 for individuals and unique localities have been profound,” the report concludes. 

Las Vegas will prove the single most vulnerable metropolitan area, likely to see nearly 5 percent fewer jobs this year because of the attacks. 

Casino workers have taken some of the toughest blows, with one of every 20 casino jobs in the Las Vegas Valley lost in the first six weeks after the attacks. 

John Parker, a former housekeeping employee at the Rio hotel-casino, has been laid off since October and was at the Catholic Charities social services office Thursday looking for help with his $800-a-month rent. 

“I sold everything I had in my house to pay for the rent in November and December,” said Parker, 39, a single father of two children. That included his furniture and television. 

The Milken study estimates that 760,000 jobs will be lost in 2002 as a direct result of the attacks, with most of those coming in the travel and tourism sectors. The remaining 840,000 positions will come from ripple effects on other industries such as retail. 

The losses will come in addition to the 248,000 jobs lost in 2001 as a result of the attacks, the study says. 

Most cities are expected to begin to recover in 2003, with the exception of New York, which should start its rebound a year later, the study says. 

“The good news is that many of those jobs should come back,” said Ross DeVol, director of regional studies at the Milken Institute and principal author of the report. 

However, he expects the economic damage to linger into 2004. 

The study examined 315 cities, using economic models to extrapolate employment losses based on each area’s economic trends prior to Sept. 11. 

Nationally, the largest falloff in jobs will occur in the air transportation sector, which will account for about 20 percent of the 1.6 million lost positions. The amusement, recreational services and hotel sectors will be next hardest hit. 

Spending on airline travel dropped 38 percent in September, a decline of $12.5 billion, and improved only modestly in October. The airline industry responded in October and November by cutting 81,000 jobs, or 6.2 percent of its total work force, and more deep cuts are on the way, the study says. 

The impact of Sept. 11 will extend well beyond travel-related industries. The entertainment and advertising sectors will lose 150,000 jobs as a result of the attacks, primarily because companies are slashing advertising budgets. 

Across the country, the financial services industry will likely lose 96,000 positions through the year. Part of the losses relate to compensation payments made to victims’ families that have hit the profits of insurance companies. 

As the scene of the World Trade Center attack, New York lost billions of dollars worth of assets and thousands of jobs directly related to the shutdown of the financial district for a week. In addition, the city’s economy has yet to benefit from any reconstruction. 

Los Angeles is predicted to lose 69,000 jobs. 

“That is one big number,” said Jack Kyser, chief economist at the Los Angeles Economic Development Corp. 

Even though the attacks had a huge initial impact on travel, tourism and related industries, Kyser is convinced the city will prove resilient and rebound by the end of the year as tourism and trade pick up. 

Las Vegas will take one of the biggest hits. 

“We do feel the impact, and it hurts,” said Erika Brandvik, a spokeswoman for the Las Vegas Convention and Visitors Authority. “But nobody ever gets a long-term feeling of doom and gloom about the Las Vegas economy. We have a record of recovery.” 

Las Vegas hotels have managed to maintain high occupancy rates by offering discounts. In mid-week, more than 80 percent of its 125,000 hotel rooms remain booked, and on weekends that figure tops 90 percent, she said. 

But great deals will not be enough to stem further job losses in travel-related industries this year, the Milken study says. 


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