Management & Operations

N.Y. transit strike said to cost city $1 billion

Posted on January 1, 2006

The pre-Christmas transit strike that crippled transportation in New York City for nearly three days took an unhealthy toll on the local economy during the holiday season’s busiest days. Mayor Michael Bloomberg estimated the city’s lost revenue at $1 billion, about $400 million per day, although others said it might have been far less. The city’s third-ever transit strike ended on Dec. 22, a little less than 60 hours after it was called by the Transport Workers Union Local 100 against the Metropolitan Transportation Authority (MTA). Union officials voted to send 33,000 members back to work after being threatened with fines and criminal charges. They also had incurred the wrath of millions of commuters and holiday shoppers. Bloomberg said the strike was especially tough on the city’s retailers, restaurants, museums and cultural institutions. In addition, he said, the city spent $10 million a day on police overtime and strike-related costs. With the strike occurring during the height of the Christmas shopping season, millions more were lost in sales tax revenue. After the strike was called at 3 a.m. on Dec. 20, the city implemented a contingency plan that required carpooling and imposed travel restrictions. At press time, contract talks between the union and the MTA were continuing under a media blackout. Disagreements over the MTA’s three-year contract proposal’s retirement benefits and wage increases were the cause of the walkout, which effectively ended all service on the subway and buses in the city. An estimated 7 million people use the trains and buses daily. In its last offer on Dec. 19, the MTA had proposed wage increases of 3%, 4% and 3.5% over the next three years, but had withdrawn a proposal to raise the retirement age for full-pension eligibility to 62 from the current 55. Another central conflict in the talks was the MTA’s proposal to raise the pension contribution to 6% of earnings for new workers, from the current rate of 2%.

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