Small businesses feel Wall Street's pain

Thu Nov 20, 2008 8:43am EST
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By Jim Finkle and Scott Malone

BOSTON (Reuters) - Wall Street's pain is rippling through U.S. small businesses, as bankers who once pulled in million-dollar bonuses lose their jobs and cut back spending on everything from parties to home improvements.

Among those hit is Felice Pomeranz, a Boston-based harpist who has weathered two major recessions in 26 years and has never seen times so tough.

"This is the worst. It's terrible," said Pomeranz, a performer who also books other musicians to perform at corporate events. "Musicians are dying to work."

Bookings for corporate events by her company, Gilded Harps, are down as much as 70 percent from a year ago, with work for financial firms practically nonexistent.

The major financial services firms that are not collapsing -- such as Goldman Sachs Group Inc, Bank of America Corp and Fidelity Investments -- are tightening up as they prepare for the worst, making headlines as they lay off thousands of workers.

"They are driving demand for all kinds of other industries -- whether it's home improvement, contracting, landscaping, furniture, entertainment, restaurants," says University of Massachusetts economist Michael Goodman. "Small business will bear more than its fair share of the pain."


Small businesses employing 49 or fewer people shed 25,000 jobs in October, the first time they had cut employment since 2002, according to figures from Automatic Data Processing Inc, the world's largest payroll processing company.   Continued...

<p>Musician Felice Pomeranz plays her harp at her studio in Sudbury, Massachusetts, November 17, 2008. REUTERS/Brian Snyder</p>