An angry New York entered the second day of its transport strike today, with millions of people pooling their cars, hitching lifts and taking to the streets to walk to work on a bright, freezing morning.

The newspapers complained. "Four days before holidays and we’re all Mad As Hell", read the headline on The Daily News. "You Rats," said The New York Post, referring to the city's 34,000 subway and bus workers who illegally walked out of work on Tuesday.

But The New York Times struck a different note, claiming that the strike, which has already cost the city $400 million (£227 million) and is forecast to cost $1.6 billion (£909 million) if it lasts for a week, was declared after the Metropolitan Transportation Authority (MTA) refused to compromise with its workers over a $20 million (£11.35 million) pension proposal.

The newspaper said that a demand that new workers contribute 6 per cent of their wages towards their pension, rather than the current 2 per cent, would save the MTA just $20 million over the next three years - less than what the police department will spend on overtime in the first 48 hours of the strike.

The MTA defended its negotiating tactics, saying that the pension plan, while initially small, would save the authority from "a tidal wave" of payouts in the coming years. Pension experts forecast the savings at around $160 million (£91 million) over the next decade. The MTA will enjoy a $1 billion (£569 million) surplus this year.

The news shifted the blame back and forth between the transit authority, a state body ultimately responsible to George Pataki, the Governor of New York, and the union, which, until now, has shouldered the majority of the city's frustration.

Local 100 of the Transport Worker's Union, the group that called the strike at 12.01am on Tuesday morning, is being fined $1 million-a-day for the illegal stoppage, the first to halt New York's buses and subways since 1980, when an 11 day strike paralysed the city. The union has even been criticised by its parent, the Transport Worker's Union of America, and urged to go back to work.

The union president, Roger Toussaint, has been criticised for failing to make any counter-offer to a range of compromises offered by the MTA in the closing hours of negotiations earlier this week.

Although Peter Kalikow, the chairman of the MTA, refused to budge on the now-contentious pension plan, he did agree to increase wages and dropped ideas to raise the retirement age from 55 to 62 and make workers contribute more to their health benefits plan.

According to Arthur Schwartz, the union's lawyer, the daily fine could bankrupt the union within the next two days. A Brooklyn court will decide today whether individual workers could also be fined.

Michael Bloomberg, the recently re-elected Mayor of New York, expressed his anger towards the union again today, with his second symbolic walk across the Brooklyn Bridge to work. As he did yesterday, the Mayor walked hatless with thousands of pedestrians into Lower Manhattan.

"All the transit workers have to do is listen to their international that’s urged them to go back to work, listen to the judge who ordered them back to work, and look at their families and their own economic interests," he said.

"They should go back to work. Nobody’s above the law, and everyone should obey the law."

Mr Bloomberg said that up to 40 per cent of retailers on Manhattan's 8th Avenue had shut during the strike. Shops and restaurants have been hit especially hard with sales decimated in the run-up to Christmas.

Throughout the rest of the city, most people just contended with the struggle of getting to work - and worrying about how to get home again.

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