By Edith Honan and Jonathan Allen

NEW YORK (Reuters) - New York City school bus drivers went on strike for the first time in 34 years, creating headaches for up to 152,000 students in the nation's largest public school system on a sleet-soaked Wednesday.

The strike was triggered by the city's decision to seek new, less expensive contracts for routes that serve children with special needs. The union representing bus drivers - who are employed by private contractors, not the city - says the city is unfairly blaming bus drivers for cost increases.

"What this is all about is that the mayor wants to bring down wages of people making less than $40,000 a year," said Larry Hanley, who heads the Amalgamated Transit Union.

New York Mayor Michael Bloomberg said the city had no choice but to seek cheaper alternatives.

"This strike is about job security this union just can't have," Mayor Michael Bloomberg told a news conference on Wednesday.

The city now pays $1.1 billion a year to school-bus contractors, roughly $6,900 for each student - more than any other U.S. city. Los Angeles, which pays the next highest rate, spends $3,100 for each student, Bloomberg said.

"It is irrational for us to keep spending this much money if there is an alternative," he said.

Bloomberg applauded parents for making sure their children made it to school, saying attendance on Wednesday was just slightly below average. About 11 percent of the city's 1.3 million school children were impacted.

Hanley said cost increases were due to the high cost of delivering special needs children to schools. Those children are often transported, curb-to-curb, in small numbers by two professionals - a driver and a matron - to out-the-way school facilities, Hanley said.

Hanley acknowledged his union has been "behind the curve" in explaining its perspective to the public.

"TAKE A HIKE!"

"Take a Hike, Kid!" reads the front page of Wednesday's New York Post, beside a picture of a glum young student with his thumb raised, hitch-hiker style.

Many students who rely on yellow bus service received free subway passes at school. Parents who drive their kids to school or take them in taxis can be reimbursed.

Contracts to provide school bus services had not been renegotiated in more than three decades before the city began seeking competitive bids in December.

New York City bus drivers last went on strike in 1979. The strike lasted three months. Continued...