Global Report on Human Settlements 2007 - PoA-ISS

80
Urban crime and violence
Table 3.6
Impact of the World
Trade Center attack on
New York City as of
June 2002
Source: Bram et al, 2002, p12
Impact Estimated magnitude Notes
Labour market
Loss of human life Estimated 2780 workers, Losses estimated as present discounted value of lifetime earnings;
US$7.8 billion lifetime-earnings loss
federal Victim Compensation Fund set up to help offset earnings
losses and psychological impacts on families
Net job losses 38,000–46,000 in October 2001, rising to Most of the employment losses related to the attack were in
49,000–71,000 by February 2002, diminishing to 28,000–55,000 finance, airlines, hotels and restaurants
by June 2002
Net earnings losses US$3.6 billion to US$6.4 billion between September 2001 Based on estimates of net job losses and reduced hours
and June 2002
Attack-related productivity effects Some increase in post-traumatic stress disorder and alcohol Difficult to quantify attack’s impact on workers’ mental and
and drug use three months after attack
physical disabilities
Total labour loss
US$11.4–14.2 billion
Physical capital
Cleanup and site restoration US$1.5 billion Completed June 2002; expenses covered by the Federal Emergency
Management Agency (FEMA)
Destroyed buildings in Approximately 14 million square feet, Book value of towers at $3.5 billion; complex privately insured
World Trade Center complex US$6.7 billion to rebuild Inclusion of damage to Class B and C space raises estimate to 21
Damaged buildings in Approximately 15 million square feet, US$4.5 billion million square feet
World Trade Center area
Contents of buildings in US$5.2 billion Significant offset from private insurance
World Trade Center complex
Public infrastructure
Subway US$850 million Estimated repair cost; significant offset from private insurance
PATH train station US$550 million and/or FEMA for repair to all three components of infrastructure
Utilities
US$2.3 billion
Total capital loss
US$21.6 billion
Total (labour, capital) loss
US$33–36 billion
Notes: The rounding of the total (labour and capital) loss figure acknowledges imprecision in the estimates. On the one hand, estimates of the labour loss may be understated, primarily
for two reasons: the June 2002 cutoff for estimating earnings impacts and the possible earnings reductions due to a drop in the number of hours worked (in industries other than
apparel and restaurants). In addition, attack-related declines in worker productivity (due, for example, to stress) may have affected employed workers and are not captured in our
estimated earnings losses associated with declines in employment and hours. On the other hand, estimates of the labour loss may be overstated, because of the double counting of
the earnings losses of some of the deceased workers and the assumption that the deceased workers would have worked in New York City until retirement. Furthermore, although
this earnings-loss tally corresponds to New York City proper, these figures will overstate the net impact on the broader metropolitan area and the nation because many of the job
‘losses’ reflect job relocations from the city to the suburbs – largely northern New Jersey. Because these are aggregate loss estimates, the issue of distributional impacts is not
addressed.
Terrorist attacks
have resulted in
new and tightened
security measures
on public
transportation
systems in cities
across the world
estimated magnitude of the loss of physical capital and infrastructure,
including the cost of cleanup and restoration, was
US$26.1 billion. A significant proportion of the cost of
destruction and damage has been offset by private insurance,
while the Federal Emergency Management Agency
covered the cost of cleanup and restoration. All these have
contributed to reducing the long-term effects of the destruction
of physical capital and infrastructure on New York City.
The impacts of terrorist attacks on physical infrastructure
in cities of developing countries are equally devastating
and the long-term effects are likely to be more pronounced,
given the inadequate condition of such infrastructure in the
first place. For example, it has been observed that the effects
of the various violent assaults on Baghdad’s infrastructure
have been to reduce what was once a fairly advanced
economy to ‘pre-industrial age’. 254 Furthermore, the poor
state of the economy of many developing countries and the
absence of indemnity to cover the cost of destruction on
such a massive scale imply that recovery from severe terrorist
attacks is likely to be very difficult, if not impossible.
The loss of urban employment on account of terrorist
attacks is more documented in the case of developed
countries, particularly in the aftermath of 9/11. Sources of
livelihood have also been lost in cities of developing
countries following terrorist attacks, and their effects are
likely to be exacerbated, given the relatively low levels of
formal sector employment. The events of 9/11 have had a
disruptive effect on employment in New York City. In particular,
Table 3.6 shows that the number of private sector job
losses varied between 38,000 and 46,000 in October 2001,
and had increased to between 49,000 and 71,000 by
February 2002. These job losses varied across industries, as
indicated in Box 3.6, with the most affected being financial
services, restaurant, hotel, and air transportation. Other
industries that were affected include business services,
apparel manufacturing, printing and publishing – due to
their strong concentration in Lower Manhattan.
Terrorist attacks have resulted in new and tightened
security measures on public transportation systems in cities
across the world. With respect to air transport in the US,
some of these measures include: 255
• About 5000 members of the US National Guard,
dressed in camouflage and with M-16 rifles in hand,
deployed to some 422 airports around the country.
• More (private) security personnel deployed at airports.
• Allowing only ticketed passengers in the departure gate
areas.
• Better screening of passengers at airport checkpoints,
for knives, cutting instruments, guns and other
weapons.
• More random checks of passengers, their shoes and
their carry-on luggage.
• X-raying of carry-on lap-top computers and other
baggage.
• More detailed background checks on all aviation