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Layoffs to Continue, Report Says

Labor: More than 1.6million jobs will be lost in U.S. cities this year as a result of Sept. 11 attacks, study predicts.


The Sept. 11 terrorist attacks will cost the nation's cities more than 1.6 million jobs this year, according to a study of more than 300 metropolitan areas to be released today by the Milken Institute.

Big cities will lose the largest number of jobs, led by New York, projected to shed 150,000 more jobs this year than it otherwise would have in industries ranging from advertising to financial services. Los Angeles County is expected to log the second-highest number of attack-related job losses, with 69,000 positions disappearing in 2002. Orange County will be harder hit on a percentage basis according to the study, which the institute said is the first of its kind.

The report predicts that some smaller tourist destinations, though posting fewer job losses overall than their larger counterparts, will actually suffer more in relative terms, given their dependence on a single industry. Milken economists ranked Las Vegas as the nation's most vulnerable metropolitan economy because of its near-total reliance on tourism--the sector hit hardest by the fallout from the terrorist attacks.

Las Vegas is expected to lose 41,000 jobs this year, representing nearly 5% of total nonfarm employment, stemming from the falloff in travel and tourism following Sept. 11, according to the Milken figures. Myrtle Beach, S.C., with a projected 3,700 attack-related job losses--3.6% of its job base--ranks No. 2 among the most affected metro areas.

Likewise, Orange County is projected to feel the effect of attack-related job losses more keenly than Los Angeles County in 2002, given its smaller size and relatively greater dependence on tourism. According to the study, Orange County will lose nearly 27,000 jobs this year as a direct result of the attacks. Those losses represent a 1.83% decline in total nonfarm employment, compared with a 1.65% contraction in Los Angeles County.

However, tourism is expected to rebound faster than sectors such as aerospace and high technology. Thus, Milken economists expect Orange County and tourist magnets such as Las Vegas to recoup their jobs losses more quickly than Los Angeles County, which is facing a protracted slump in commercial aerospace.

"In the short term, Los Angeles isn't going to be harmed as much as places like Las Vegas or Orlando," said Ross C. DeVol, director of regional and demographic Studies at the Milken Institute and one of the study's authors. "But the impacts here are going to be longer lasting."

The report by the Santa Monica-based think tank is an attempt to isolate and quantify the effect of Sept. 11 on regional economies that already were experiencing a general slowdown. All told, metropolitan areas across the U.S. are projected to lose 1.64 million jobs in 2002, on top of the more than 1 million already reported to have been lost in the wake of the attacks on the World Trade Center and the Pentagon.

The study, which examined and ranked 315 metro areas, is an outgrowth of a report Milken researchers prepared for local officials in October to assess the potential effect of the terrorist attacks on Los Angeles County.

DeVol said the economic ripples from the tragedy have touched virtually every community in the country. But the degree of vulnerability is linked to the diversity of each region's industrial makeup. DeVol said Milken researchers calculated which industries have been hardest hit following the attacks, then projected job losses for each metro area based on the composition of that region's job base.

The most affected businesses include restaurants and bars, hotels, amusement parks, air transportation, advertising and aircraft production.

Los Angeles County ranked high in all of those categories, which led to its No. 2 ranking in projected job losses for 2002 stemming from the terrorist attacks. But the sheer size and diversity of L.A.'s economy rendered it less vulnerable in relative terms. When those losses are calculated as a percentage of its overall job base, Los Angeles County ranked 31st in the Milken study.

By contrast, Wichita, Kan., was ranked in the top 10 of most-affected metro areas in percentage terms, because of its heavy reliance on commercial aircraft production.




Effect of Terror

Projected job losses this year in metropolitan areas as a result of the terror attacks last fall.


Area job loss

1. Las Vegas -4.98%

2. Myrtle Beach, S.C. -3.60

3. New York-Newark -3.42

4. Reno -3.15

5. Atlantic City- Cape May, N.J. -2.98

6. Orlando, Fla. -2.85

7. Wichita, Kan. -2.81

8. Flagstaff, Ariz. -2.61

9. Honolulu -2.57

10. Fort Worth-Arlington -2.45

19. San Francisco -1.94

21. Orange County -1.83

31. Los Angeles-Long Beach -1.65

Source: Milken Institute

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