20 years ago today, on the morning of September 11th, 2001, four commercial airlines were hijacked mid-flight by alQaeda terrorists. This terrorists attack would ultimately kill 3,000 Americans, injure another 25,000 and send shockwaves throughout a whole nation. On the 20th anniversary of this attack, we dive inside the immediate economic affects that took place.
For New York- In Manhattan, New York the World Trade Center buildings, more commonly known as the Twin Towers were directly hit by aircrafts resulting in their collapse soon after. These 110 story buildings were home to financial firms and 400+ other top-tier businesses. So how did this tragedy more specifically affect the New York economy? It did so in a variety of ways. First, through the cost of the loss of life. The value of life lost in 9/11 was valued at $24 billion, that includes the $10 billion the people who died at the World Trade Center would’ve received in income. Next, was the cost to rebuild. To replace New York’s lost and destroyed infrastructure costed $21.8 billion. Overall, when factoring in the lost supplies, utilities, equipment and cleanup on top of the mentioned infrastructure and value of life, the direct toll of the attacks costs $55 billion.
For Airlines - The terrorists compelled their attacks with the use of American commercial flights, which were unfortunately full of civilian life. This immediately inserted fear in all Americans when it came to flying. As a result, the airline industry immediately took a massive hit. From 2001 to 2002, the U.S. air industry reported $19.6 billion in losses. While from 2001 to 2010, the airline industry suffered $74 billion in loses. In order to prevent future attacks and create a sense of security to the American people, airlines needed to add extra security at airports. The TSA, (Transportation Security Administration) took control of this mission with the aid of increased funding, which comes from American taxpayers. Their 2020 proposed budget was $7.79 billion. With this extra security comes longer waiting, which was reported to cause a loss of $10 billion a year in lost time following 9/11/2001. To counter lost time and flying all-together Americans started to drive more instead of flying. With an abundance of increased drivers, comes increased driving deaths. It’s reported that as many as 2,300 driving deaths could be attributed to the terrorist attacks. The estimated death total costs from increased driving is reportedly $19 billion. Fear was evident following the attacks, as 9/11 was estimated to bring $61 billion in losses to the travel industry- excluding airline travel.
For the Nation - The attacks on 9/11 sent a shockwave throughout the entire nation, despite it only directly appearing in a few parts. This shockwave brought fear, distraught, and loss with it. The economic loss it brought was significant in various aspects. The US real GDP saw a 0.5% decrease instantly after the attacks, as the increased external war and internal conflict proceeded to negatively affect the GDP growth in the year of the event. The job market too was impacted as 9/11 reportedly resulted in an 0.11% increase in the unemployment rate, which amounts to 598,000 jobs lost. The attacks also fueled debt creation and assets inflation, particularly in real estate, while simultaneously extending the March recession by causing the economy to retract by 1.7%. The Department of Homeland Security gained traction following the attacks of 9/11, and then exploded. Increases in defense spending related to the 9/11 attacks costs $589 billion by 2011 alone. Within that cost of $589 billion, is $110 billion of national intelligence spending for domestic intelligence efforts only. Meanwhile, the cost of war and terrorism skyrocketed for the United States as well.
The horrific attacks on 9/11 will never be forgotten. Meanwhile the economic affects of 9/11 will never go uncounted for.
Undoubtedly, as said by Former United States Secretary of State Colin Powell, “You can be sure that the American spirit will prevail over this tragedy.”
