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Small Businesses in Big Apple Hit Hard by Strike
 

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Dec. 21, 2005--They carpooled, peddled their bikes, or legged it out.

Or stayed home.

Yet even as owners and employees of New York's 200,000 small businesses quickly adapted to a second day without public transportation, getting to and from the workplace has already started eating into sales, productivity, and morale, business and city officials said Wednesday.

Since early Tuesday, the nation's largest mass transit system has sat idle after contract negotiations broke down between the Metropolitan Transportation Authority and the Transit Workers Union, representing about 34,000 subway and bus workers.

The first day of the strike alone cost $400 million in lost economic activity, estimates released Tuesday by the comptroller's office showed.

Citing reports from the Department of Small Business Service at a press conference on Tuesday, New York Mayor Michael Bloomberg said the economic consequences "range from severe to devastating, depending on the business."

Retailers in Lower Manhattan will be hardest hit, the mayor said. At the peak of the holiday shopping season, "hundreds of stores haven't been able to open, and some that did have had practically no business," he said. Along one stretch of Eighth Avenue, almost half the stores were closed, he added. "Businesses are struggling to get their people to work," Bloomberg said -- let alone bring in customers.

Early Wednesday, Bloomingdale's was forced to close its Lexington Avenue store. Federated Department Stores, which runs both Bloomingdale's and Macy's, said sales were off by 40% on Friday, when the transit union first threatened to walkout.

But with fewer resources than larger companies, small businesses are expected to bare the brunt of a protracted strike, the Manhattan Chamber of Commerce said, pointing to the high cost of shuttling workers around the city, coupled with smaller internal computer networks ill-equipped for telecommuting.

Still others said technology -- from cell phones to wireless laptops -- might cushion the blow compared to 1980, the last time the city was gripped by a transit strike.

At Mimeo.com, an online printing firm in Manhattan, technology and a local workforce has helped make it business as usual since Tuesday, according to marketing director Matt Johnston.

"That's partially because we have a high number of local workers living within 20 blocks or so of the office," Johnston said, adding that almost all of its 60 workers have made it into work since the strike began. As early as last week, he said, the company began organizing employee carpools for those living in the outer boroughs, in anticipation of a possible strike. And with a national costumer base served entirely online, and production facilities in Memphis, Tenn., Johnson said the strike hasn't dealt his company a blow.

But for most small firms, the impact will come from lost business and cancellations that can't be replaced, New York Comptroller William Thompson said in a statement Tuesday.

By his estimates, the city stands to lose some $1.6 billion in the first week alone. On a normal day, total economic output is about $1.5 billion, according to City Hall.

On top of cutting working hours and lowering productivity, a transit shutdown could see small businesses lose a substantial downtown costumer base if larger corporations start moving workers to regional offices for the duration of the strike, Thompson said.

Still, the worst impact will come within the first few days, he said, when "many people will just take the day off." After that, average costs should trail off as businesses arrange better commuting options for their workers, he said.

With most employees on vacation the week after Dec. 25, losses would be considerably less, Thompson added.

Last updated: Dec 21, 2005




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