Report: LI, NYC workers lost estimated $8.2B in 3 days after Sandy
UnsOund Surf shop in Long Beach, seen here on Nov. 1, 2012, after suffering damage from superstorm Sandy. Empire State Development calculated the economic impact of the storm on businesses and workers. Credit: UnsOund / Mike Nelson
Superstorm Sandy’s impact on the economies of Long Island and New York City in the first three days after the storm was equal to 135,000 people being out of work for an entire year.
That was according to state estimates used in the initial response to Sandy and obtained by Newsday this month. The estimates cover the three weekdays following the storm’s landfall on Monday, Oct. 29, 2012.
Empire State Development, the state’s primary business-aid agency, calculated that the millions of workers affected by Sandy together lost an estimated $8.2 billion in wages and other personal income.
Sandy flooded thousands of businesses in the metropolitan area and left many without electricity. Commuters were stranded, with the Long Island Rail Road and other mass transit shut down in the days following the storm.
Personal income includes salaries, investment earnings and the proceeds of owning a business.
The initial estimates of Sandy’s economic impact haven’t been made public before and were released in response to a Newsday request.
They are based on formulas from Regional Economic Models Inc., an Amherst, Massachusetts-based forecasting firm that studies the fiscal impacts of hurricanes and other natural disasters. The two-page state report presents a dramatic picture of Sandy’s first effects on jobs and business activity.
Production of goods and services in the metro area fell by $16 billion in the three weekdays after the storm, Oct. 30 through Nov. 1.
“This initial analysis of the scope of the economic impact of the storm served as a starting point for our response,” said an ESD spokeswoman. “The report was used in our efforts to help businesses recover, in the request for aid from the federal government and many other efforts.”
Local economists said Sandy’s economic impact lessened after a couple of weeks as mass transit and electricity services were restored and companies reopened.
The ESD estimates “most likely overstate some of the impacts . . . because most individuals did go back to work after the immediate emergency period ended,” said Richard Vogel, an economist who studies the impact of disasters and is dean of Farmingdale State College’s business school. “What we are talking about are temporary losses.”
John A. Rizzo, chief economist for the Long Island Association business group and a Stony Brook University professor, agreed, saying most workers who were idled by the storm didn’t lose their jobs.
CORRECTION: Superstorm Sandy’s economic impact in the first three days following the storm equaled 135,000 people being unable to work for one year, according to additional information provided by Empire State Development after the story was posted online Tuesday morning. An earlier version of this story misstated the impact.
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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