NYC Mayor: City Is Functioning

New Yorkers Don't Like It, But Lump It; Mass Transit Strike Continues

(CBS/AP)  The city that never sleeps is in emergency mode with no end in sight to a bus and subway strike that's stranded 7 million locals and tourists in frosty temperatures, punching a hole in the city's economy at the peak of the holiday shopping season.

Commuters are hoofing it despite the freezing cold, riding bicycles and sharing cabs and cars, in what is New York's first mass transit strike in over 25 years.

New Yorkers will have to hang tough, as no new negotiations are scheduled, despite increased pressure on the union in the form of a court-ordered $1 million-a-day fine.

The sanction was levied against the Transport Workers Union for violating a state law that bars public employees from going on strike. The city and state had asked that the union be hit with a "very potent fine."

"This is a very, very sad day in the history of labor relations for New York City," State Justice Theodore Jones said in imposing the fine.

The union, whose contract expired on Friday, is appealing the court-ordered fines, which it calls excessive.

The latest Metropolitan Transportation Authority contract offer, rejected by the TWU late Monday night, included annual raises of 3 percent, 4 percent and 3.5 percent. MTA workers typically earn from $35,000 as a starting salary, on up to about $55,000 annually.

Huge lines formed at ticket booths for the commuter railroads that stayed in operation, and Manhattan-bound traffic backed up at many bridges and tunnels as police turned away cars with fewer than four people.

Transit workers took to the picket lines with signs that read: "We Move NY. Respect Us!"

"I think they all should get fired," said Eddie Goncalves, a doorman trying to get home after his overnight shift. He said he expected to spend an extra $30 per day in cab and train fares.

"It doesn't seem right to tie up the cultural and investment center of the world," said Larry Scarinzi, 72, a retired engineer from Whippany, N.J., waiting for a cab outside Penn Station. "They're breaking the law. They're tearing the heart out of the nation's economy."

TWU local 100 president Roger Toussaint said the union wanted a better offer from the MTA, especially when the agency has a $1 billion surplus this year.

CBS News correspondent Sharyn Alfonsi reports pensions have been a major sticking point in the contract talks, particularly involving new employees. Critics argue transit workers' health and pension benefits are extravagant by private sector standards and government leaders are following corporate America's example and trying to cut back, Alfonsi says.

The strike over wages and pensions came just five days before Christmas, at a time when the city is especially busy with shoppers and tourists.

The heavy penalty could force the union off the picket lines and back on the job. Under the law, the union's 33,000 members will also lose two days' pay for every day they are on strike, and they could also be thrown in jail.

The courtroom drama came midway through a day in which the walkout fell far short of the all-out chaos that many had feared. With special traffic rules in place, the morning rush came and went without monumental gridlock. Manhattan streets are unusually quiet: some commuters just stayed home.

The nation's biggest mass transit system - fifth largest in the world - ground to a halt after 3 a.m., when the union called the strike after a late round of negotiations with the Metropolitan Transportation Authority broke down. The subways and buses provide more than 7 million rides per day.