NYC Mayor: City Is Functioning

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.

New Yorkers carpooled, shared taxis, rode bicycles, roller-skated or walked in 20-degree temperatures. Mayor Michael Bloomberg joined the throngs of people crossing the Brooklyn Bridge by foot.

"Hey, can I get a ride?" Jay Plastino asked a neighbor near his home in the northern tip of Manhattan. Plastino, who was headed to his midtown job, was angry at the union: "This is a big city. Don't they realize that?"

By Tuesday's evening rush hour, crowds were thick at both Penn Station and Grand Central Terminal as commuters waited for trains on the two suburban rail lines, where ridership had soared earlier in the day. The Long Island Rail Road, operating out of Penn Station, carried 50,000 more passengers above its usual 100,000.

Gov. George Pataki said the union acted illegally and "will suffer the consequences." But union attorney Arthur Schwartz accused the MTA of provoking the strike.

The MTA has asked the Public Employment Relations Board to formally declare an impasse, the first step toward forcing binding arbitration of the contract, said James Edgar, the board's executive director.

This is the city's first transit strike since an 11-day walkout in 1980, which happened in much warmer April weather. The effect this time, however, was tempered by the advent of personal computers, which enabled many commuters to stay home and work via the Internet.

The strike comes at the worst possible time: in the final few days before Christmas, the peak of the holiday shopping season. Bloomberg angrily admonished the union during an afternoon press conference, saying the strike has caused severe to devastating harm to city businesses, as food service business are not receiving deliveries, tourists were canceling at hotels, and many stores remain closed.

The last time the transit workers walked out, it cost the city $100 million dollars a day, but that was in the spring, not the prime business season.

Some people boarded water taxis along the Hudson River; others rode bikes, walked, roller-bladed, formed impromptu carpools with neighbors and strangers, shared cabs, or lined up in the cold to await private buses chartered by employers.

"The city is functioning, and functioning well considering the severe circumstances," the mayor said. The union "shamefully decided they don't care about the people they work for, and they have no respect for the law. Their leadership thuggishly turned its back on New York City. This strike is costing us."

Jack Akameiza, 66, was trying to figure out a way to go the nine miles from Manhattan to Coney Island. "I cannot go to work," he said. "I cannot take care of my family."

Some commuters were upset at the union, others with management. Some, as they made their way to work, blamed both sides.

"It's two arrogant groups not caring that 7 million people are inconvenienced," said Kenny Herbert, 45, of Brooklyn, who took the train to work Monday night but needed a water taxi across the East River to get home.

CBS News station WCBS-TV in New York reports the international arm of the Transport Workers Union is stunned and angry that its Local 100 turned down the contract offer and walked off their jobs, and international leadership is considering taking over and seeking a settlement with the MTA.

The first day of the strike was expected to cost the city $400 million in revenue, with an additional loss of $300 million per day afterward, according to the city comptroller's office. Countless stores and restaurants were affected.

The mayor put into effect a sweeping emergency plan, including a requirement that cars entering Manhattan below 96th Street have at least four occupants.

Lorraine Hall came to New York expecting a lighthearted celebration of her 65th birthday, but the lack of mass transit put a damper on the occasion. She was determined to make the best of it until her departure on Friday.

"I didn't come up here to sit in a hotel room, and as long as my two feet are letting me push it, I'm going to push it," said Hall, who lives in Lancaster, S.C.