November 29, 2001 NY TIMES
As the Rich Do Without Extras, Service Workers Do Without
By STEVEN GREENHOUSE
A nanny on the Upper East Side had her work schedule cut
to three days a week from five because the wife in the household lost her job
on Wall Street. Limousine drivers complain of carrying fewer passengers and
earning 40 percent less than they did before.
At
many top restaurants, waiters are working just three days a week instead of
five. And bellhops at Manhattan's five-star hotels say their tips, which often
account for half their income, have plummeted by half.
These
workers are part of a huge yet largely overlooked segment of New York City's
ailing economy — estimated by economists to number 75,000 workers —
who have suffered badly since the Sept. 11 terrorist attack on the World Trade
Center. These 75,000 workers — separate from the 80,000 who have been
thrown out of work since the attack, according to state figures — have
experienced a painful drop in income because, while holding onto their jobs,
they are working fewer hours, carrying fewer passengers and receiving lower
tips.
Economists
assessing the ripple effects of the Sept. 11 attack originally focused on the
surge in unemployment, but they are now beginning to examine this other large
group of workers, studying how their shrunken incomes will add to New York's
steep economic losses. The financial troubles faced by these workers will go
far to reverse the good times that many low-income workers experienced over the
past decade. Despite their economic suffering, many of these workers fail to
qualify for any assistance, and their declining incomes will have a cascading
effect, hurting retailers and landlords alike.
"There's
a whole level of hardship that's not being captured by the employment data,
including the unemployment numbers," said Mark Levitan, a senior policy
analyst at the Community Service Society of New York. "It's going to have
a fiscal impact because there will be less tax money going into the city
treasury. And there's going to be a severe impact on low-income neighborhoods,
like Downtown Brooklyn and 125th Street, that have had significant gains in the
last five good years we had."
Nazir
Khan, a limousine driver, complains about a plunge in business because his
company is receiving fewer calls to pick up Goldman Sachs and Morgan Stanley
bankers, or passengers on the US Airways shuttle. His weekly gross has fallen
to $600 from $1,000, out of which he pays more than $200 a week for gas,
insurance and car payments.
Wealthy
passengers, Mr. Khan said, have grown more tightfisted. "Fewer people are
giving tips by far," he said. "Let's say on the average I would get
$20 to $30 a day in tips. Now if you get $5 to $10, that's a lot."
Many
financially squeezed workers — limousine drivers, butlers, housekeepers,
waiters, nannies, bellhops — have been hurt by a wholesale
belt-tightening by the city's well- to-do. Wealthy New Yorkers were badly
shaken by Sept. 11 and the subsequent economic slump, so not surprisingly they
cut back their spending.
"New
York, like London and other global cities, has always had a luxury service
class that relied on a healthy upper class," said Joshua B. Freeman, a
historian at Queens College. "When that upper class catches a cold, those
who rely on them catch pneumonia."
Mr.
Khan is a prime example. To make ends meet he now often works 18-hour days,
from 6 a.m. until midnight, instead of 14 hours as he did before Sept. 11. He
has told his two teenagers to forget about buying the latest Nike styles and
the hottest CD's, advising them that they do not have to buy name brands and
should buy only what they need.
"This
is the hardest period that I've ever had here," said Mr. Khan, who immigrated
from Guyana 10 years ago.
Luis
Molina, a taxi driver from Puerto Rico, faces a similar squeeze. He said his
financial district business has fallen most, helping drag down his daily gross
to $170 from $250 — before he pays $75 a day to lease his cab.
"I
used to have a slew of stockbrokers," Mr. Molina said. "They were
good tippers. A lot of them brought their mistresses along. They'd want me to
take them to the nearest hotel. That's changed. I think they've stopped
partying."
Some
of the 50,000 taxi and limousine drivers in the city say they are making only
slightly more than half what they were before Sept. 11 but working longer
hours. Add to that the thousands of waiters, bellhops, nannies and others
suffering from shrunken paychecks, and some economists say the estimate of
75,000 people in this group may be conservative.
Many
of these workers complain about slipping through the safety net and being
unable to qualify for aid like unemployment insurance, usually half of their
weekly pay. And this group also complains that the unemployed have an easier
time obtaining government health insurance, like Medicaid.
"The
safety net that we have isn't designed for this gray area," Mr. Levitan
said. "We have this new twilight zone of people who are formally employed.
They work too many hours for unemployment insurance, and their incomes are too
high for public assistance or food stamps, yet their incomes have been hurt
severely."
Mike
Wallace, co-author of "Gotham," the Pulitzer-winning history of New
York City, sees parallels between today's downturn and the Great Depression,
when many humbled financiers fired their chauffeurs, butlers and laundrywomen.
Since there are fewer personal chauffeurs nowadays, he said, many of the
wealthy are instead cutting back on their use of limousine companies. Now, as
in the 1930's, Mr. Wallace said, those cutting back first are not the
"rich rich" but the merely rich and the upper middle class.
Roseana
Thomas, a nanny on the Upper East Side, recently saw her schedule cut to three
days a week from five, reducing her weekly pay to $250 from $400. Noting that
the husband and wife had not lost their jobs, she said their worries about a
downturn had evidently persuaded them to trim their spending.
With
two teenage daughters at home in Brooklyn and monthly rent of $750, Ms. Thomas
said she would have to share an apartment unless she found more work soon. To
economize, she does laundry in her bathtub instead of at a coin laundry. She is
also baking and cooking a lot more instead of buying prepared foods.
Her
hard times are fueling tensions with her teenagers. "I believe in talking
to them and letting them know reality, and I told them until I do better, I
don't think Santa will be visiting here at all," she said.
The
primary business at Royal Airline Laundry, washing linens for airlines, is down
40 percent since Sept. 11. Having laid off a fourth of the 300 workers at his
plant in Far Rockaway, Queens, Sherwin Glabman, Royal's chief executive, said,
"I've never seen anything like this, even in the Iraqi war."
La
Côte Basque, the restaurant on 55th Street, has lost business, including
many corporate banquets. As a result, Ricardo Cerdeira, a banquet captain, has
worked just three or four days a week the last six weeks. But at least he is
working now; for the preceding month, from mid-September to mid-October, Mr.
Cerdeira was laid off because of the plunge in business after Sept. 11.
"September
through December is traditionally the best time for New York's restaurant
industry," Mr. Cerdeira said. "We're in November, and things haven't
gotten much better. January, February and March, they're usually the worst
months for the industry, and there's a lot of fear about what happens
then."
At
the Palace Hotel, 5 of the 19 bellhops were laid off in mid-September. Those
who stayed agreed to their union's suggestion to give up one day of work each
week to minimize the number of layoffs.
Brendan
Daly said that not only did he lose 20 percent of his pay by giving up that
day's work, but also tips fell 50 percent because the hotel's vacancy rate
soared while the generosity of clients plummeted. In good times, tips often run
to $400 a week, on top of his $440 in wages. So the weekly income for many
bellhops has plunged from about $840 to about $540.
"Tips are basically where we get the butter for the bread," he said. "The butter is running a little dry."