Ever since he began driving taxis a few years ago, Mohammed Chowdhury has started his 5 p.m. shift the same way, steering off the Brooklyn Bridge to lower Manhattan's Water Street in search of his first fare. Upon finding a passenger, he would coast up the FDR Drive usually to an Upper East Side destination. It was an easy $20 to start the night.
People used to go "crazy" trying to catch a cab in the financial district, Chowdhury said, gliding through light, rush-hour traffic a few weeks ago. But now that more than 13,000 finance jobs have been lost and another 18,000 are expected to disappear before Wall Street revives, things feel different.
The routes are less predictable, and the passengers are harder to find, Chowdhury said. "Every time I start working from there, I don't see that many people. It's really hard to find a passenger," he said. "This financial crisis is like a chain system. If the passengers lose their jobs now, they don't take cabs that much, or if they do maybe they do once in a week. Now we're losing those passengers, so ... we're making less money."
In other words, the effects of the turmoil on Wall Street extend far beyond investment bankers. As the recession's effects deepen and spread many people will turn to the city for help. But given the government's own strained circumstances, how much can - and should it do?
In looking at the current economic turmoil, the New York City comptroller's office has focused on the financial sector's "multiplier effect," the process by which one job lost on Wall Street leads to an estimated one and a half lost jobs elsewhere in the city. As firms dismiss staff, they "don't require as much in terms of support, like from an outside legal counsel or from a consultant, or in terms of office supplies," said Marcia Van Wagner, deputy comptroller for the budget. Less business for the supporting industries sparks additional layoffs, all linked in a chain through their own multiplier effects. Moreover, said Van Wagner, as people lose income, "they're not spending their money in restaurants, they're not going out and buying their new apartment, they have to fire the babysitter."
The economic downturn is national - earlier this month, the National Bureau of Economic Research confirmed that the country was in a recession and the U.S. Department of Labor announced an overwhelming 533,000 jobs lost in November. Although New York's economy initially seemed immune, expanding while the nation's began to contract, a report released last week by the Fiscal Policy Institute showed that the city is catching up. Initial unemployment filings for the 12 weeks ending November 21 increased almost 42 percent over the same period last year. The institute predicts an unemployment rate between 8.5 and 9 percent in 2009 and Comptroller William Thompson announced Thursday that job losses could reach 170,000 by late 2010. For its part, the city's Office of Management and Budget expects a loss of 147,000 jobs.
New York suffers from a "double whammy" given the weight of the securities industry in the local economy, said Van Wagner. "The finance sector has such a disproportionate impact. There may be some other [city] sector that has unusually high wages but they're just not anywhere near as big as the finance sector," she said. According to a 2007 osc.state.ny.us/osdc/rpt5-2008.pdf report by the New York State comptroller, the securities industry accounts for 23 percent of the city's wages and 9 percent of its tax revenue.
Wall Street employs only 5 per cent of the city's workers, and the Office of Management and Budget expects it will absorb only 31,000, or roughly one fifth, of the city's layoffs. But the generous year-end bonuses and lavish spending that accompanied the boom have faded, affecting businesses throughout the city and weakening city tax revenues. In short, it has taken little time for the fallout to trickle down to people like Mohammed Chowdhury.
Taxi rides in October, the latest month for which data is available, averaged approximately 425,000 per day, including weekends, a level that Commissioner Matthew W. Daus of the Taxi and Limousine Commission characterized as "consistent" with previous levels. And while the commission did not have data readily available, it dismissed the idea that there has been a significant change in the duration of the average ride.
Nonetheless, Chowdhury maintains that passengers are scarcer than they were last year and that trips are not as long. He said he has also had customers short the fare. "I ask them, 'What happened?'" he said. "'They say, 'I don't have enough money, is that OK?' Forget about the tips! ... They're giving me $3 less [than the fare.]" In total, Chowdhury estimates that he is earning roughly $100 less per weeknight this winter than he did in 2007. Weekend business remains fairly stable, he said: "Lots of kids going out, they don't care if they don't have a job, they still going to the bar."
With less income, Chowdhury and his fellow drivers are cutting back on the same luxuries that other New Yorkers are eschewing, such as eating out. "Most of the yellow cab drivers, they used to sit down, take their sweet time eating and gossiping, because they make enough money," he said. "Now I think they work more, and they bring their food from home."
The trend is widespread. According to Nina and Tim Zagat, creators of the restaurant guide, one third of respondents to their most recent survey are eating out less, and one fifth say they're ordering less alcohol and fewer appetizers and desserts. Restaurant openings in New York City fell from 163 last year to 119 this year.
The Zagats believe that the nation's restaurant industry will prove resilient, though, as they wrote in an October Wall Street Journal op-ed. One reason for optimism is the emergence of what they call BATH, or Better Alternatives to Home, establishments. These are "modestly priced eateries," including "noodle shops and myriad ethnic places," that can be a more efficient choice than home-cooked meals, they wrote. But even some of those restaurants are feeling the effects of the downturn, if one, Tribeca's renowned Pakistan Tea House, is any indication.
The restaurant offers combination plates of South Asian fare, including fresh-baked bread, for less than $10. Its lunch crowd is dominated by businesspeople, while the late shift hosts the restaurant's taxi-driver clientele, for whom the kitchen concocts an extra-spicy chicken curry. Business during both shifts is slower this year than last. "Before, at lunchtime, after 12, it used to be really good, the line was outside the door on the sidewalk," said 18-year old Umar Irshad, whose father owns the Tea House. "Now, it's not like that."
Although drivers still stop by, they order less, Irshad said. "They buy a tea, or a samosa. They won't take a whole plate," he said. To try to increase business, Irshad has begun making deliveries on his own and passing out business cards to friends from school. While business remains slow, Irshad insists that his family would take money from their own pockets to keep employees on the payroll.
Not all employers can promise the same. Irshad said he has overheard business people at the Tea House lamenting being fired and taxi drivers wishing they could find different work. Job insecurity has become a recurrent theme in headlines and water-cooler talk around the city: the production company that fell short of its projected budget, the writing workshop whose recently laid-off participants needed to pay the class fee in installments, the non-profit that might close its doors entirely.
Chowdhury worries that job losses in other sectors might lead to an over-supply of taxi drivers, as people look for new, or additional, sources of employment. "Before, they don't have enough drivers, they're looking for the drivers," he said. "Now, the garage has enough drivers, more than enough." His fears of heightened competition may be well founded. According to Commissioner Daus, 23.9 percent more licenses were issued between August and November of this year than during the same period in 2007.
While workers in the finance industry may have felt the recession's effects first, they also are more likely to be able to weather the downturn. According to the state comptroller's report, the average securities-industry salary in 2006 was $339,310, while the city estimates that roughly 44 percent of New Yorkers live below 150 percent of the poverty line (or a little more than $39,000 for a family of four). Many of those caught in the wake of the crisis have had to turn to charities and other safety nets.
Unfortunately, a decrease in donations and corporate giving has constricted the budgets of many of the city's charitable organizations, causing safety nets to wear thin. (See Gotham Gazette's slide show, "Feeling the Pinch Despite the Season.") City Harvest, which collects unwanted food from New York's restaurants and redistributes it to emergency food providers, is experiencing a $315,000, or 9 percent, shortfall in its annual budget. But demand for its services is growing. "Not only are we a charity affected by financial downturn, but we're also trying to help the people who are affected by the financial downturn," said City Harvest's vice president of operations, Jennifer McLean.
According to a survey that City Harvest conducted this fall, 75 percent of responding emergency food providers said that they were serving first-time clients, and 60 percent said that their clients were traveling farther to receive emergency food. At the Mobile Market in the South Bronx, one of two sites where City Harvest distributes produce directly to individuals, McLean estimates that demand has increased by 20 percent since August. "Ever since mid-summer, all of a sudden the numbers just started climbing at every single market," she said. "We're not giving away anything that's super tantalizing, like a finished good," she continued. "They're lining up for cabbage! ...They're lining up for carrots! And they're getting there at six in the morning!"
The city has taken some steps to address the problem. In October, Mayor Michael Bloomberg announced 18 initiatives to ameliorate the crisis, including providing $1.3 million in frozen vegetables for the city's emergency food providers. "We can't eliminate the burden many will feel and we can't act as a substitute for failing or missing federal assistance in every case, but by creating real jobs and providing targeted assistance to small businesses, homeowners and vulnerable New Yorkers, we can provide meaningful help to those who need it most," Bloomberg stated in a press release.
City Hall plans to use federal and state funds to support the initiatives, which include investing in local infrastructure to create 25,000 jobs, expanding the city's loan guarantee program to 400 small businesses and non-profits, enhancing job training and placement services, and funding the acquisition of up to 115 foreclosed properties to develop more than 250 affordable homes.
Advocacy organizations like the New York City Coalition Against Hunger praised the plan. In particular they applauded proposals to expand the city's in-classroom breakfast program and to ease the food stamp application process for eligible seniors.
Some advocates, though, think the city should be doing more. "Though Bloomberg's initiatives will help some struggling New Yorkers, we call on the city to support the very poor by fighting for raising welfare benefit and affordable housing," said Veda Myers, hunger and food stamp coordinator at Hunger Action Network of New York State, in an email.
On the other hand, some critics worry the city is spending money it does not have. An editorial in the New York Post faulted the mayor's plan for "shoveling out the cash like Halloween candy." It warned that the initiative would make it harder to "convince the public that the city's money spigot is dry."
Certainly, it may become increasingly difficult for the city to provide assistance. The Office of Management and Budget predicts that the tax revenues collected in 2009 and 2010 will fall shy of the amount collected in 2008 by $2.6 and $3.1 billion, respectively. As a result, the city faces having to cut billions in spending. In September, the mayor ordered that city agencies cut their 2009 and 2010 annual budgets by 2.5 percent and 5 percent, respectively. And last week he called for an additional 7 percent reduction in spending for the 2010 fiscal year, to begin July 1, 2009. Bloomberg has promised that the city's quality of life will not suffer as a result, but Van Wagner warned that sweeping budget cuts would inevitably lead to the deterioration of public services, such as policing and education.
Fiscal constraints presumably also preclude the city from taking sweeping steps to help the newly unemployed or underemployed, and could cause the city to cut programs aimed at helping low income New Yorkers.
City Harvest's McClean remains concerned about the future. "At what rate are people going to have to start needing help?" she wondered, adding that she didn't think New York had felt the full effect of the crisis yet. "That's my biggest concern," she continued, "where's it going to stop and will we have enough to do something meaningful about it?"
Nevertheless, Van Wagner believes the city is doing it's best. "You can quibble about particulars, but generally, under these circumstances, what do you do? You have to cut spending and you have to find ways to raise revenue. Given a problem of this scale, one or the other really isn't going to do the trick. You really have to have a multi-faceted approach to get the situation under control."
In the meantime, the city problems continue to affect lives even beyond its and the nation's borders. According to Chowdhury, the most significant reduction in his expenditures is the amount he sends home to his family in Bangladesh. "I used to send them every month like $600. Now I'm sending them like $300, $320" he said. "Maybe before they used to eat better, now they have to cut back, they have to eat something different because I cannot afford it." According to the World Bank, the global flow of remittances to developing countries began to slow in the third quarter of 2008, and is expected to decelerate further in 2009.
But while funds may be limited, sympathy is not. "They're very used to taking a cab, going to the Upper East Side," said Chowdhury of his passengers. "Now I feel bad for them because they have to go to the subway and fight with other people, standing up."
Across the country, evidence of the need to invest in America's transportation infrastructure abounds. From the tragic collapse of the I-35 bridge in Minneapolis last year, to the plans for a new Tappan Zee Bridge in New York, major road projects need serious attention and federal support. The American Society of Civil Engineers has reported that the nation's infrastructure deserves an overall grade of D and set the price tag for repair at $1.6 trillion.
America's public transit system needs support as well. Gas prices are high, purse strings cinched and environmental consciousness as broad as ever. Accordingly, more American's are using transit and regional rail along with biking and walking. The American Public Transportation Association found that Americans took 88 million more transit trips in the first three months of this year than in the same time period last year. In New York City, overall public transit use rose by between 1 percent and 13 percent in the first quarter of this year compared to the first quarter of last year.
In short, both New York City and the United States are experiencing a transit boom and a roadway bust. Dealing with both will take thoughtful planning and serious commitment from city, state and federal government. It will also take a president committed to addressing the myriad issues facing the nation's ailing highways and over-crowded buses and trains in new and creative ways.
So what can New York commuters expect from the two major party presidential candidates? Sen. Barack Obama has often spoken of the need for better transit funding, smarter development and more infrastructure investment by the federal government, while Sen. John McCain has long preached the gospel of fiscal responsibility and a hands-off role for Washington. Both men have made statements about their inclinations and plans, and both have transportation-related legislative records that indicate what their administration might mean for the nation in the next four years.
A key test for the new president could come with the reauthorization of the next federal transportation bill in 2009. While many critics have problems with this omnibus approach to transportation spending, and the planning that results, for about two decades the bill and its predecessors have played a key role in shaping the transportation landscape in the nation and New York City.
The current version of the bill, dubbed SAFETEA-LU, which was passed in 2005 and is active through 2009, is a $286.4 billion piece of legislation that primarily shapes transportation planning through funding specific projects in specific areas.
Although generally considered a highway bill -- about 85 percent of it goes to roads -- it also includes a good deal of start-up transit funding and even some money for non-motorized transportation (bicycles and pedestrians), although that amount is less than 1 percent of the total. Critics claim that it is loaded with pork projects and earmarks for certain key legislative districts that have been traded for "yes" votes.
McCain, who, judging by his campaign Website, has never met an earmark he liked, was one of only four senators to vote against SAFETEA-LU. His official statement on the legislation read: "This monstrosity of a conference report which costs an astounding $286.4 billion is both terrifying in its fiscal consequences and disappointing for the lack of fiscal discipline it represents."
Certainly, SAFETEA-LU is a huge spending bill filled with earmarks and potential pork barrel projects, but pork is often in the eye of the beholder. SAFETEA-LU money funded a number New York City projects from better buses and subways and bike lanes to the Safe Routes to School program. There is no way of knowing what McCain thought of any of those particular items -- his Website says little to nothing about specific transportation projects -- but his emphasis on fiscal consequences and fiscal discipline would seem to imply that if he were president, a do-more-with-less approach to transportation funding, with private companies taking up more of the responsibility, would be the model.
Obama, on the other hand, not only attended the SAFETEA-LU bill signing but also praised the work of the Illinois delegation in winning its passage. He hailed the nearly $2.1 billion secured for mass transit in his home state of Illinois and over $500 million for major road and bridge projects in the state. Perhaps a President Obama would deliver more transportation funding to urban areas. Both his energy and environment platform and his urban policy say as much. He pledges to "reform the tax code to make benefits for driving and public transit or ridesharing equal," and to alter the "transportation funding process to ensure that smart growth considerations are taken into account."
Any reauthorization of the federal transportation bill would be very significant for New York City. The Metropolitan Transportation Authority needs money to help pay for its capital plan, which includes projects like the Second Avenue Subway, the extension of the Number 7 train and East Side access for the Long Island Rail Road. Other major projects, like the cross-harbor freight tunnel and the new Tappan Zee Bridge, require funding too.
With five New York Democrats on the House Transportation Committee, it seems likely that a good amount of federal dollars will be headed toward New York City, at least in early drafts of the next Transportation Equity Act. Whether those fund make it here or not, of course, depends to a great extent on the inclinations of our next president.
Not surprisingly, Democratic Rep. Jerrold Nadler, the New York delegation's senior member on the House Transportation Committee, thinks an Obama administration would help the city more than a McCain one. "Sen. Obama has been very supportive of public transportation programs and improving our flagging national infrastructure for the sake of safety and efficiency," Nadler said. Nadler criticized McCain's opposition to the transportation act, SAFETEA-LU, calling it "arguably one of the country's most valuable and effective programs." "McCain also opposes giving members the ability to help direct SAFETEA-LU funds toward projects they know are essential to their own districts," Nadler said.
The debate over each candidate's stands on the next transportation bill assumes that Washington continues to dole out transportation dollars the way it has for years. This might not be the case in the near future. Many advocates, economists and policy makers would like to see a major shift in the way transportation funds are allocated and federal transportation planning is conducted.
The National Surface Transportation Policy and Revenue Study Commission has called for a "new beginning" for the nation's transportation policy. It supports a system that moves away from the piecemeal process of earmarks and pet projects in favor of a holistic approach that corresponds with interrelated federal concerns like oil independence, greenhouse gas reductions, creation of green-collar jobs, public health and safety, and even national security.
America 2050, a joint venture of the Regional Plan Association, a New York City based research, planning and advocacy group, and the Lincoln Land Institute, a research organization focused on the use, regulation and taxation of land, has called for a "new, more active role of the federal government in establishing principles, priorities and plans to guide transportation investment in the dawning 21st century."
Jonathan D. Miller of the Urban Land Institute has echoed this call and suggested that one way to do this would be to "set federal funding guidelines to force states and regions to integrate their highway, mass transit, rail and airport planning, combined with local initiatives to reduce car dependency." He contnued, "We need smart, multi-modal, inter-regional solutions - no more single-shot 'Roads to Nowhere.' The huge government deficits we face make the case for strong federal incentives - perhaps a national infrastructure 'czar' to insist on integrated, economical approaches - all the more compelling."
There are also calls for a National Infrastructure Bank that would rigorously evaluate specific project proposals from local and state government to assess their regional and national benefits, and then compile an investment portfolio to pay for the selected programs. A bill currently in both houses of Congress could help create that kind of entity, and Obama has spoken out in favor of such a bank.
All of these new approaches seem to run counter to McCain's general reluctance to increase the role of the federal government in any sphere -- although he has made few specific comments this election cycle. Obama, on the other hand, has a transportation policy position that seems much more likely to bolster a national-and-regional approach instead of the ad hoc strategy used today. In addition to supporting the idea of a National Infrastructure Bank, he has pledged to "unlock the potential of all our regions by connecting them with a 21st century infrastructure."
This new approach to structuring transportation funding would greatly benefit metropolitan areas like New York City. If money were allocated based on the number of users instead of by earmark, dense population centers almost certainly would see much more funding for transit and roads. Furthermore, as public transit can help meet the country's broader strategic goals, such as achieving energy independence and reducing greenhouse gas emissions reductions, the region's under-funded commuter rail lines, buses and subways could well see an increase in federal dollars.
No matter who the American people elect on Nov. 4, the next president will have to address our nation's -- and New York City's -- transportation infrastructure. Whether that will mean double-checking every line item in the 2009 reauthorization bill or boldly laying new tracks for a new century is anyone's guess and every voter's choice.
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On a recent Wednesday evening, Erin Brown waited for the Fung Wah bus to Boston with a dozen or so other people on a crowded Canal Street sidewalk. "It's such a crush - the people, the vendors, the cars, narrow sidewalks, narrow streets. I don't know why they leave from here, but the price is right," she said.
Brown is not alone in her sentiment. It often feels as though every inch of Chinatown is jam-packed. Cars clogs street from the Manhattan Bridge to the Holland Tunnel. Sidewalks overflow with tourists, workers and neighborhood residents. Stalls spill out from shops, and lately it seems that every few blocks there is a line of 20 or so people queuing up for an interstate bus.
The buses are nothing new. Since 1998, companies like Fung Wah, using spaces reserved for tour buses or agreed upon spots in the neighborhood, have run curbside operations, picking up and dropping off passengers. The recent surge in travel costs, though, has made more outfits see the benefits of such a low-overhead way of doing business. This means more buses jamming city streets and curbsides and more bus queues on already crowded sidewalks.
It has reached the point, according to City Councilmember Alan Gerson, where there now are more interstate bus pick-ups and drop-offs in Chinatown each day than there are at the Port Authority. Although the competition has driven down prices for travelers, it has created some difficult situations for neighborhood residents, passing pedestrians and local businesses.
The trip from New York to Boston on Amtrak is $89. By car, at $4 for a gallon of gas, the 220-mile drive costs somewhere about $30, without tolls. The Fung Wah or Lucky Star bus leaving from Canal Street or Chrystie Street respectively is $15, and their upscale neighbor, the Bolt Bus, which departs from the sidewalk outside of Penn Station, is about $20 with a reserved seat and wireless internet. Given the economics, it's no surprise that the bus business is booming.
Eron Shosteck, a spokesperson for the American Bus Association, believes some travelers have started to see motorcoaches as a green alternative to driving. And at 184 passenger miles to the gallon - compared to 42 passenger miles to the gallon for domestic flights and about 28 miles to the gallon for average American automobiles - buses certainly seem like an environmentally friendly choice. People who live near the makeshift stops and staging areas, though, have a very different opinion.
Chinatown already has one of the highest childhood asthma rates in the city - one study estimates that one in five households has at least one person suffering from the condition. Some neighbors believe the increase in buses and the traffic they generate waiting and circling can only exacerbate the situation.
What's more, the multiple drop-off and pick-up points used by the various bus operators complicate the neighborhood's notoriously tricky traffic patterns. In a Chelsea Now article, police officers from the nearby Fifth Precinct report that it is difficult to maintain a steady flow of both pedestrian and automobile traffic because of the buses. The buses' multiple staging areas also make it difficult to regulate trash and parking.
"It's a part of the city where there is already an intense utilization of the curbside," said Wiley Norvell, a spokesman for Transportation Alternatives. "When things go wrong at the curb, nothing else on the street functions well. There is a definite need to consolidate and take stock of our curbside regulations: where buses are aloud to park and idle, and where passengers are allowed to queue."
In 2006, Michael Lau, the commanding officer of the Fifth Precinct, told the City Council Transportation Committee that the crowding of discount buses in Chinatown brings dangerously congested streets, the possibility of accidents and even violence as bus operators compete for parking spots and passengers. He claimed that 30 different bus companies dispatch more than 100 buses each day from Chinatown's curbsides
In response, city officials presented a plan to the local Community Board, Manhattan Board 3 that would have consolidated the interstate bus stops in a two-block area near where Pike Street meets the F.D.R. Drive. Residents of the nearby housing projects understandably were none too pleased and urged the board to vote down the proposal. It did 23 to 7.
For sometime now, the Department of Transportation has been working on a study of the bus traffic in Chinatown. Although a department spokesperson was unavailable for comment, judging by its efforts with Community Board 3, the department doe seem to be paying attention and listening to stakeholders.
Still, with gas prices high, air fare exorbitant and the expense of Amtrak tickets, the curbside bus boom in Chinatown and elsewhere around the city seems likely to continue, pressing officials and bus operators to come up with ways to keep fares low and streets and sidewalks clear.
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