Transit Strike Could Deliver Blow to NYC Economy

A strike by transit workers in New York City has entered its second day, and city officials warn that its economy could take a big hit. A state judge declared the strike illegal Tuesday, imposing a fine of $1 million a day on the transit union. The union has promised to appeal.

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RENEE MONTAGNE, host:

This is MORNING EDITION from NPR News. I'm Renee Montagne.

Millions of commuters in New York City face another day figuring out alternative ways of getting to work. A strike by subway and bus workers is in its second day. Yesterday, a state judge ruled that the strike was illegal and imposed a million-dollar fine per day on the transit union. The union called the fine excessive and promised to appeal. The strike has made it much harder for people to get around the city, and city officials warn that New York's economy could take a big hit. NPR's Jim Zarroli reports.

JIM ZARROLI reporting:

With subway trains and buses sitting idle, New York officials worried that a lot of people would drive into the city, creating huge traffic jams, and so they barred vehicles carrying fewer than four passengers from entering parts of Manhattan during the morning. Hubert Fonville(ph), a construction worker, got around the restriction by agreeing to give three of his co-workers a ride to work. It took a lot of driving.

Mr. HUBERT FONVILLE (Construction Worker): Well, I had to get up at about 3:30, leave my house at 4:00, go to Queens then come back to East New York, then go to Flatbush, then go to Coney Island, then come back to the city.

ZARROLI: But Fonville, who works on an apartment building that's going up near Central Park, says a lot of his co-workers didn't make it in yesterday.

Mr. FONVILLE: Out of 45, maybe 20 within my crew. You know, there's nobody there. Look, the building isn't moving.

ZARROLI: It was the same in other parts of New York yesterday. Mayor Michael Bloomberg warned at a press conference that a lot of companies had trouble getting their employees to work. Many retail stores stayed closed, he said, and those that opened did less business. The mayor said the strike could end up costing the city about $400 million a day, about a third of its daily output. He said the figure was based on, quote, "modeling and some people's guess.'

Mayor MICHAEL BLOOMBERG (Republican, New York City): From what we have been able to learn, the economic consequences of the strike range from severe to devastating, depending on the business.

ZARROLI: One economist with the Federal Reserve Bank of New York said the $400 million figure could be on the high side. Many companies took steps to prepare for the strike, hiring buses and car services to shuttle their employees to work. That included most of the big firms on Wall Street, which is by far the most important sector of the city's economy. A spokesman for Goldman Sachs said despite the strike, yesterday turned out to be a remarkably normal day. The New York Stock Exchange stayed open, as did Broadway theaters. One of the city's biggest hospitals, St. Luke's-Roosevelt, put up employees in empty patient beds. But for a lot of small businesses, the picture was different.

Dwayne Smothers(ph) was unloading flats of sodas from his van in front of a store on West 48th Street. Because delivery trucks are barred from Manhattan between 5 and 11 AM, Smothers had to get into the city an hour and a half earlier than normal. He doesn't mind losing a little sleep, but what does worry him is the strike's impact on the soft drinks his company sells.

Mr. DWAYNE SMOTHERS (Delivery Employee): A lot of people are not going to be able to make it to the city. That means that a lot of people are not going to be at work and I'm going to see a lot less sales in my vending machines.

ZARROLI: Some economists say the strike could also hit the city's tourism industry especially hard. The hotel business has been strong in New York this year, but with buses and subway trains not working, a lot of tourists could stay home. Hours after the strike was called yesterday, some hotels lowered their rates. The Milford Plaza, which caters to tourists, advertised a strike special of $180 a night, below its usual price.

At Frankie and Johnnie's Steakhouse, a former speakeasy in the Theater District, owner Peter Chimos is worried about how much business he'll do this week.

Mr. PETER CHIMOS (Owner, Frankie and Johnnie's Steakhouse): Actually, this week's supposed to be a very big week, you know, the holiday, just before Christmas and Christmas falls on the weekend. So now with this strike, who knows what's going to happen?

ZARROLI: Chimos worries that his employees won't be able to make it into work and that the delivery trucks that bring food to his restaurant won't be able to make it into the city.

Mr. CHIMOS: And it's ridiculous. You know, it's going to be a mess, no question about it.

ZARROLI: The last time there was a transit strike, Chimos said, a lot of companies put their employees up in hotels. And with so many people lodged in the city, restaurant business was good. But these days, with telecommuting and computers, he says, people may not need to be in New York to do their jobs. Like a lot of people in the city right now, Chimos isn't really sure what kind of impact this strike is really going to have. Jim Zarroli, NPR News, New York.

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