The Story of the Economic Collapse From Main Street

Sinking_ship The following news stories from the Associated Press this past Friday confirm that that Wall Street financial meltdown is also being felt throughout the country on Main Street.

From the Associated Press on September 19th:

Florida’s unemployment rate rose to 6.5 percent in August. According to the state labor department that’s the highest the state has seen in more than 13 years. The number is up from 6.2 percent in July, and up from 4.2 percent since August 2007. The state’s total number of jobs lost in the past year rose to 99,100. According to federal numbers, that’s the largest loss in the nation for the third month running. 606,000 residents are currently without work in the state. In Miami-Dade County, the unemployment rate is 5.5 percent, up from 3.8 a year ago, according to the U.S. Bureau of Labor Statistics.

Adjusted numbers are not available for other Florida counties, but Broward’s unadjusted number is 6.1 percent, up from 3.9 a year ago. Monroe County is at 4.8 percent, and was at only 3 percent in August 2007. Florida’s unemployment numbers are being pushed by job losses in the construction industry and related fields. The current national rate is 6.1 percent. Only Rhode Island saw a larger unemployment spike in the past year.

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Disability Fraud at the LIRR

Lirr_logo_2 Here is a disturbing report from the New York Times yesterday concerning the awarding of disability benefits to former workers at the Long Island Rail Road:

During the workweek, it is not uncommon to find retired L.I.R.R. employees, sometimes dozens of them, golfing there. A few even walk the course. Yet this is not your typical retiree outing.

These golfers are considered disabled. At an age when most people still work, they get a pension and tens of thousands of dollars in annual disability payments — a sum roughly equal to the base salary of their old jobs. Even the golf is free, courtesy of New York State taxpayers.

With incentives like these, occupational disabilities at the L.I.R.R. have become a full-blown epidemic.

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Wall Street Collapse = ERISA Stock Drop Litigation

Graphup Not a surprising development at all. From BNA Daily Labor Report (subscription required):

As several heavy hitters in the financial world have come under pressure or have gone bankrupt in the past couple of months because of the subprime mortgage and lending crisis that has battered investment firms and banks, the employer “stock drop” cases that proliferated in the post-Enron Corp. and post-WorldCom Inc. age are on the rise.

Although the Employee Retirement Income Security Act claims raised in these stock drop cases have not been identical, there are two central claims that arise in these cases. The first claim typically raised is that the plan fiduciaries breached their duties by offering company stock as a plan investment option when the stock was an imprudent or unwise investment. The second claim focuses on the disclosure obligations of the plan fiduciaries and often alleges that the fiduciaries breached their duties by not telling plan participants of financial matters of the plan sponsor that made the sponsor’s stock an imprudent investment.

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