Bloomberg News

Occupy Wall Street Knows Not What It Does Hurting Local Jobs

November 02, 2011

(Updates with CBO report in sixth paragraph and Oakland arrests under ‘Not as Tolerant’ subhead.)

Oct. 25 (Bloomberg) -- Occupy Wall Street protests assailing income inequality, joblessness and big banks may have some unintended consequences. They’re hurting nearby merchants as police barricades deter shoppers.

“If this doesn’t stop soon I will be out of business,” said Marc Epstein, 53, president of Milk Street Cafe on Wall Street, less than a block from the New York Stock Exchange.

Sales have dropped about 20 percent since the protests began last month and the 103 jobs created by the cafe’s opening in June are now at risk, said Epstein, who is not alone. Caroline Anderson, general manager of Boutique Tourbillon, a Wall Street jewelry store, said customer traffic is down about 20 percent, and Vincent Alessi, a managing partner at Bobby Van’s Steakhouse on Broad Street, said his lunch business has been cut in half.

The Occupy Wall Street movement that began in New York with about 1,000 people on Sept. 17 has spread to cities on four continents as demonstrators from London to Rome and Chicago to Sydney have pitched tents in public spaces. Police, whose displays of force also may be hurting business as they block access to tourist destinations, have arrested hundreds.

“These protesters don’t understand the consequences of their actions,” Epstein said. “Who’s going to create the jobs they’re banging their drums for?”

Income Inequality

Participants say they represent “the 99 percent,” a reference to Nobel Prize-winning economist Joseph Stiglitz’s study showing the richest 1 percent of Americans control 40 percent of U.S. wealth. A Congressional Budget Office report released today shows that from 1979 to 2007, after-tax income grew by 275 percent for the top 1 percent of households, compared with 18 percent for the bottom 20 percent.

As Wall Street banks reported earnings this month, financial executives made little or no mention of the protests’ impact on their business. Firms including Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. have their main New York offices in Midtown, about three miles from the protest epicenter in Lower Manhattan’s Zuccotti Park.

At Kenjo, a watch retailer adjacent to Milk Street Cafe, the barricades have killed the lunch-hour rush, Artice Jones, the manager, said yesterday as he looked around a store devoid of customers.

“If it stays this way for the rest of the month, it’s not going to look good going into November,” Jones said.

Sales Plunge

Sales have plunged 40 percent at Paternoster Chop House near the London Stock Exchange, said manager Gerhard Jacobs, whose waiters greet customers at the metal barricades and escort them through the square that police have cordoned off.

“Not only is it affecting my general trade, it’s also affecting my future business,” Jacobs said. “We’ve got inquiries for weddings and exclusive hirings who are now considering taking their business to other restaurants because of the uncertainty of how long this may carry on.”

Alessi, the steakhouse manager, said customers are “fed up” and are seeking out more convenient places to eat.

“We’re tired of being herded through barricades like cattle,” he said.

Paul Browne, a spokesman for the New York City Police Department, didn’t respond to e-mails inviting comment on how the barricades have hurt businesses in the area.

Too Early

It’s too early to tell whether the protests are damaging the real estate market in New York’s Financial District, where pending apartment sales have slumped 26 percent in the past month, compared with an 8.8 percent decline for all of Manhattan, said Noah Rosenblatt, founder of UrbanDigs.com, a real estate data and consulting firm.

Beth Bogart, 55, a documentary filmmaker from New York’s West Village who has volunteered at the Zuccotti Park press table for the past three weeks, said she has encouraged occupiers, visitors and journalists to help local businesses.

“It’s a fairness issue; this cart was here before we were here,” she said, pointing to the food and apparel vendors that line the park’s south border. “We have to make sure that since we are here he doesn’t go out of business. That would be an incredible injustice.”

Teashop, Tents

Some businesses have benefited from the influx of protesters and curious tourists.

A teashop that faces about 100 tents pitched in front of London’s St. Paul’s Cathedral has drawn lines of customers stretching to the door as people converged on the area to witness the protests, said waitress Zanete Cakane.

Some merchants near the European Central Bank headquarters in Frankfurt, where protesters have pitched about 80 tents, are benefiting from the movement.

“If anything, we are getting more business from the demonstrators,” said Isabelle Baelly, 54, who runs a newsstand across from the ECB. “They are very peaceful and we have been letting them use our bathroom facilities and Internet.”

Sales are up as much as $1,000 a day at the Pret A Manger sandwich shop a block and a half north of Zuccotti Park, said Shamirah Dillard, a store manager.

“It’s been good, definitely,” she said in an interview. Weekends and days with scheduled marches bring the greatest peaks in extra sales, especially for hot drinks, which more than cover the increased costs of toilet paper and maintenance to keep the two bathrooms clean, she said.

Not as Tolerant

About four in 10 Americans say they support the Occupy Wall Street movement, according to a Pew Research Center/Washington Post poll released yesterday. Almost as many, 35 percent, say they oppose the protests. The telephone survey of 1,009 adults was conducted Oct. 20-23 and had an error margin of plus or minus 4 percentage points.

While New York’s protesters are being allowed to stay at their encampment, officials in other cities haven’t been as tolerant. About 4:30 a.m. local time today, police in Oakland, California, arrested 85 protesters who’d been staying in a park near City Hall, said Sue Piper, a spokeswoman for Mayor Jean Quan. Demonstrators in Denver and Trenton, New Jersey, have also been evicted.

Protesters initially struggled to build momentum, drawing a fraction of the 20,000 participants that organizers such as Adbusters, a group promoting the movement, aimed to lure to lower Manhattan last month. Prior to the Occupy Wall Street movement, Adbusters gained attention for what critics called an anti-Semitic essay published in 2004.

Amos Winbush III, a Wall Street resident, said he has stopped frequenting a local Thai restaurant and started ordering groceries for delivery.

“I’m super passionate about the movement, but the frustration is feeling like you’re in a war zone with barricades in front of my apartment and cops with big guns standing around,” Winbush, 28, said inside a Brooks Brothers store across the street from Zuccotti Park. “We were okay being a little uncomfortable for a couple of weeks, but after six weeks it gets to be a little much.”

--With assistance from Namitha Jagadeesh in London, Alex Webb in Frankfurt and Katie Spencer in New York. Editors: Peter Eichenbaum, Dan Reichl, Mark Schoifet

To contact the reporters on this story: Charles Mead in New York at cmead11@bloomberg.net; Esme E. Deprez in New York at edeprez@bloomberg.net

To contact the editors responsible for this story: David Scheer at dscheer@bloomberg.net; Mark Tannenbaum at mtannen@bloomberg.net


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