The September 11th attack
Economic shock waves speed relentlessly from ground zero
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New York
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San Francisco
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Miami
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Seattle
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New Orleans
Advertiser News Services
The city will lose 108,500 jobs in the first month since the Sept. 11 attacks on the World Trade Center and $17 billion in economic output over the next year, according to the Fiscal Policy Institute.
It's unlikely that those jobs will return to New York City, given the economic downturn, said James Parrott, the think tank's chief economist and deputy director. "I would expect since we are in a recession, that the employment outlook for New York City and the entire region will be on a downward trend," he said.
The institute's analysis paints a bleak picture of the economic ripples of the attacks in New York.
The city stands to lose 2.4 percent of its total employment as a direct result of the attacks, the report says. The lost jobs — full- and part-time, as well as among the self-employed — amount to $6.7 billion in lost compensation. Already the effects are being felt as unemployment claims in New York City grew by 10,000 in the first full week after the attacks, Parrott said.
In addition to being home to office workers, the trade center had a large underground mall beneath its plaza and supported several thousand people who worked in hotels and the building and food services industries.
The securities, retail and dining industries have been the hardest hit, losing 12,200, 12,200 and 11,900 jobs, respectively. Other sectors feeling the fallout: theatrical producers, with 7,800 affected; banking and building services, 5,400 each; and air transportation, 5,300.
The advertising industry in New York City will probably see a 3 percent drop in revenues and trim 1,000 jobs in the first month after the attack, the report said. Newspapers ran fewer ads; TV had round-the-clock news coverage with few breaks; airline and tourism ad budgets shrank.
The tremendous "human, emotional and psychological" toll of the events caused household discretionary spending to drop by 10 percent, affecting an estimated 9,600 jobs in the local service and retail sectors, the report said.
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Already reeling from the tech meltdown, residents here now worry that fallout from Sept. 11 will plunge the area into a recession.
"This is the first time we've seen such a drastic change," says Laureen Sabella of the A. Sabella's Restaurant at Fisherman's Wharf. "We've rebounded from the (1989) earthquake and the Gulf War ... (but) this has frightened people off." Since Sept. 11, the restaurant has stopped serving lunch and has laid off half its staff.
Tourism, a $7.6 billion driver of the San Francisco economy, is down about 50 percent since Sept. 11, executives say. About 25 percent of flights at the San Francisco airport have been slashed. Business is so slow that the airport is reducing rent for its shops because it is "more than they take in," spokesman Ron Wilson says.
Hotel occupancies, running at about 60 percent to 80 percent before the attacks, are now about 20 percent. That could lead to $1 million in lost revenue nightly.
The area's technology industry, too, is likely to be hurt as companies curtail tech spending. Already, tens of thousands of workers have lost jobs — driving the unemployment rate in Santa Clara County, in the heart of Silicon Valley, to 5.4 percent in August from 1.9 percent a year ago.
Venture capital financing, crucial to tech start-ups, is down 72 percent nationwide in the third quarter. Typically, Silicon Valley is the biggest regional recipient of venture capital. No turnaround is in sight, venture capitalists say.
Civic leaders are taking steps to assure the public that San Francisco is safe. The subway system has tripled the time its cars wait in the station before a six-minute ride under San Francisco Bay, giving police time to inspect cars.
Whether the fallout sends San Francisco into a recession remains to be seen.
Real estate prices are being watched. In August, the area's median home price was $475,830. The number of homes sold dropped 22 percent from the same period a year earlier. Rent in many cities is coming down. If real estate prices crater, homeowners may cut discretionary spending.
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A month ago, local tourism leaders fretted over Florida shark-bite attacks scaring a few beachgoers away.
Now they grimly wonder how many thousands of South Florida workers will lose jobs as U.S. and foreign tourists — this region's lifeblood — cancel vacations and stay home out of fear.
The terrorist attacks in New York and Washington have hit hard 1,000 miles to the south. While Florida's economy as a whole is visitor-dependent, tourism in South Florida — the region's No. 1 industry — is almost totally dependent on travelers who arrive by plane. The region's tourism leaders and hoteliers have cut rates and intensified marketing efforts.
Hotels, restaurants, airlines and aircraft servicers are laying off workers. In Miami-Dade County alone, 150,000 people, or 10 percent of the job base, work directly for airlines, hotels, restaurants, cruise lines and transportation services. But as much as 30 percent of the job base is directly or indirectly related to tourism and travel. Business leaders fear that 20,000 in Dade could be facing layoffs.
"Our unemployment rate could go to 8 percent very easily," says Frank Nero, president of Miami's Beacon Council, an economic development group. During the last week in September, Dade applications for unemployment benefits doubled, he said. A six-month drop-off in tourism could cost $3 billion in lost revenue.
"I've been through the riots and Hurricane Andrew," says Stuart Blumberg, head of a local hotels association. "But those things had a beginning and an end. We don't know where the end is this time."
Miami, with its airport serving as the leading gateway to Latin America, is an American Airlines hub. And American is laying off thousands.
In addition, Dade, Broward and Palm Beach counties are home to 50,000 workers who help maintain planes from U.S. and Latin American airlines. "The idea right now is to survive," says Henry Alvarez, president of Avborne Heavy Maintenance near Miami Airport, which let go 220 workers when airlines cut maintenance work.
Officials fear that the next round of layoffs could come atshopping malls, where generally 50 percent of sales come from tourists.
As revenue from sales and tourist taxes falls, government services will suffer. State officials are preparing to lop $1 billion from the Florida budget.
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A week after the terrorist attacks, Boeing said it would cut up to one-third of its aircraft jobs, perhaps as many as 30,000 workers, including up to 21,000 in Seattle, starting in mid-December.
Economists figure the region will lose an additional 1.7 jobs for every Boeing worker laid off. Because Boeing plans to deliver 100 fewer jets next year, aircraft parts suppliers must cut jobs, too. All told, Seattle could lose 57,000 jobs in the next two years.
Yet, Seattle residents are scouring for signs that the local economy, which has seen job growth for 19 years, might prove more resilient than anyone thought.
Thirty years ago, a Boeing layoff of this scale might mean lights out for Seattle. But the region has diversified into software, biotechnology and Pacific Rim trade. When Boeing cut 48,000 jobs in 1998, Seattle barely noticed.
"This time, we have a national recession and widespread weakness in our technology arena, so there's no saving grace," says Roberta Pauer, economist at the Washington State Employment Security Division.
In addition to Boeing, Seattle is keeping a close watch on:
• Real estate. The average price of a Seattle home hit $313,623 last year, up from $230,345 in 1997, according to the Northwest Multiple Listing Service. That 10 percent annual appreciation won't necessarily melt down, local real estate experts say, because the market had overheated to the point where there was a shortage of affordable homes — the kind laid-off factory workers might put up for sale.
• Microsoft. It has 23,943 Seattle-area employees and, while many tech firms are cutting jobs, it still plans to add 4,000 next year.
• Tourism. The number of tourists going to the top of Seattle's Space Needle and departing from Seattle-based Holland America cruise lines is down more than one-third since Sept. 11.
Local economists hope the government's bailout of the airline industry, combined with interest rate cuts and spending on war machinery, will help.
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This was to have been a turnaround year for New Orleans. The oil industry was doing well, and there were signs of the world economy perking up.
That would have bolstered tourism, a $4.7 billion industry that employs one in six workers with the lure of the French Quarter, jazz and restaurants. Super Bowl XXXVI was to kick off 2002 in late January.
A strong economy would also have been good for four ports at the mouth of the Mississippi river that handle a combined 427 million tons a year, more than Singapore, the world's largest port.
But the world economy has taken a surprise dive. Even oil and gas prices have slumped on lack of demand.
Nearby swamps are teeming with alligators. But visitors have dried up.
"I have no business anymore," says Danny Willingham, owner of Gator Swamp Tours, who is selling about 10 tickets a day ($20 adults, $10 children) instead of the normal 40.
Six of 10 New Orleans tourists arrive by air. Halloween is almost as busy as the spring Mardi Gras season.
Even the Super Bowl, worth $400 million to the local economy, was put at risk. NFL games were delayed a week, pushing the Super Bowl to Feb. 3, a date already booked in New Orleans by the National Automobile Dealers Association.
That is lhas been be resolved by the NFL offering the NADA more than $7.5 million to switch weekends. However, 20 other conventions between Sept. 12 and Oct. 26 have been canceled, including the National Retail Federation, with 4,000 delegates. Only four have been rescheduled.
Many of New Orleans' white-collar jobs in the energy industry had already left for Houston.
The city's 1.5 percent hotel tax generates about $1 million a month, and it gets about $3 million from sales taxes paid by tourists.
The city has launched a $250,000 "New Orleans for a Song" campaign to lure driving visitors.
