Is New York really losing 400 million dollars a day?

December 20, 2005 5:43 AM

What does it mean when they give an estimate of a financial loss to a city? Bloomberg has given an estimate that the strike will cost the city $400 million a day. But . . .

does that mean money that does not come in to the city and money that leaves the city? Or are they being shifty and calculating some revenue and not others. That is, money still circulates, is it really lost or is its path being altered?

posted by kingfisher, his musclebound cat to work & money (8 comments total)

Estimates like that are always inflated/deflated to suit the speaker's purpose. So, Bloomberg is probably including things like "lost productivity" at NYC employers, which is BS. However, all those trips to Starbucks by people who can't get into the city do add up...
posted by MrZero at 5:53 AM on December 20, 2005

There are expenses that the city would not incur but for the strike as well as spending that does not occur because of the strike: delis in midtown and the financial district are probably doing lower than normal business as people work from home. Bars on the lower east side will do less than the usual business as people won't travel from uptown or brooklyn. Stores will do less business than expected as people do last minute shopping online. Less money than usual will circulate as people travel less within the city or just stay home.
posted by andrewraff at 6:28 AM on December 20, 2005

This estimate is calculated every bit as scientifically and reliably as the estimates of lost productivity on the opening day of a Star Wars movie, and the RIAA's estimates of lost proceeds due to P2P file sharing.
posted by Faint of Butt at 6:31 AM on December 20, 2005

Yeah, I'm sure it's inflated and/or ass-pulled. But this is a huge couple of weeks for NYC tourism, and if a substantial number of tourists decide it's not worth the hassle of coming with a strike on, or leave early, they won't be spending their money in the city one way or another.
posted by staggernation at 6:39 AM on December 20, 2005

I agree the numbers a fudged. So why doesn't any reporter, instead of repeating it, ask how they arrived at those numbers. In other words, "prove it."
Staggernation, I agree this is one place the city does lose money, people who would come but don't. But people here either defer or displace spending, right?
posted by kingfisher, his musclebound cat at 7:00 AM on December 20, 2005

This article says "The estimate includes overtime, lost sales during the holiday shopping season and lost productivity, according to a news report."

I too am skeptical that the number is exact, but I think it is meant to communicate the scale of the cost of the strike, not the exact figure. Does anybody actually doubt that the actual cost will be in the 100's of millions dollars?
posted by ericost at 7:38 AM on December 20, 2005

Beyond the mere question of the number's fabrication, one also needs some sort of base number to compare this against. Such as, "How much does the city normally "make" in an average day?"
This is what I hate about blind numbers just thrown out without context. 400 million sounds huge to the average Joe. But, if the average day normally sees an intake of, for instance, a couple of billion, then 400 million isn't quite as impressive.
posted by Thorzdad at 7:43 AM on December 20, 2005

I don't think most people relaize how freaking huge NYC is, or how many people actually come in and out of the city each day. The figure thrown about is 7 million people. Do most people even realize how many people that is? Hint: it's a lot.

It's easy to imagine that $400 million is lost each day the strike is on when you consider the amount spent each day by New Yorkers on lunches, dinners, entertainment, transportation, starbucks, snacks, and a zillion other things. With a large percentage of people opting to stay home instead of contracting pneumonia during the 5-10 mile walk or bike ride into the city, much of this revenue/money is not spent or is spent elsewhere.
posted by camworld at 10:10 AM on December 20, 2005