First World country collides with Third World labour problem. That might be a good way to describe the current face-off, which threatens to cripple New York City, between the Metropolitan Transportation Authority and the workers union represented by Local 100.

As the midnight deadline approached, the worker's union announced that it is stopping the clock to a proposed strike.

After marathon negotiations at the Grand Hyatt hotel in Manhattan over the contract for subway workers, the union said significant progress has been made.

However, it clarified that progress has been made only in the non-economic areas, and that the negotiations are going to continue.

The contract will decide a host of issues, from pay raises to leave for MTA workers. The union had demanded a raise of 24 per cent in raises over three years, which was scaled down last week to 18 per cent. But the MTA has refused any raise for the next year and has linked any future increments to productivity.

However, at a press conference on Sunday afternoon, Mayor Michael Bloomberg exhorted New Yorkers to plan for a strike while Governor George Pataki announced that he would not enter negotiations.

Though many people didn't talk about it openly, the strike was on their minds. "I think I will cycle to work," joked Prakash Kaur, a cashier at a grocery story in Queens. Never mind that the matronly Kaur is an unlikely candidate for cycling from Ozone Park, near Kennedy airport. "If my husband was here, he could have dropped me since he's drives a cab, but he's visiting India," Kaur told rediff.com. "And I can't even drive it here since it has a TLC badge on it and I will have more trouble parking it than driving here." But she will continue to come to work.

A K M Liton has already scaled back production at his bakery in Manhattan. "It's going to be very tough for my workers," said Liton, who drives to work. "I will have to personally drop them off wherever they stay." He runs two more bakeries in Queens and Brooklyn. "I don't know how they are going to manage."

Liton, though, said the union needs to be more flexible. "They know that the economy is in a bad shape," he argued. "This is not the right time to ask for a raise."

The strike, besides bringing the city to a grinding halt, is also expected to hurt the already struggling economy. Over 7 million people ride the subway and buses every day. Estimates have put daily losses to the city owing to the strike at anywhere between $100 million and $350 million.

Contributing to that figure is Rajeshbhai Patel, who works at one of the many newspaper-and-candy stores that dot New York's labyrinthine subway network. Completely reliant on the underground population of the subways, these stores are going to be hit the worst. "Our daily take averages about $1,700," revealed Patel. "A strike means that income goes for a toss. Fortunately, they have a return policy with the newspapers so they will take back whatever we don't sell."

But the overriding question for those whose lifeline is the MTA is how they will get to work. "I haven't thought about it. I guess I will just call my office and tell them I can't make it," said Zakir Khan. "It's going to be difficult for me to get to work from East Elmhurst to Manhattan."

For others like construction worker Ghafoor Choudhary, the decision is just as tough. "I guess I'll just take a break and stay at home," said Choudhary, who lives in Jamaica but whose work takes him to any of the boroughs. "Otherwise, I'll end up paying whatever I make in taxi fare!"

Transit workers were tightlipped about what might happen. "Wait until midnight," suggested a track worker, who declined to give his name.