LOS ANGELES — The recent transit strike in the San Francisco Bay Area highlights potential credit risks that the area is exposed to, Fitch Ratings said in a report Wednesday.

"Public employee unions in the San Francisco Bay Area have become increasingly vocal in the aftermath of the recession, challenging local governments with job actions and strikes in an effort to achieve compensation increases," said Stephen Walsh, a director at Fitch. "These recent labor demands pose a risk to local government financial flexibility where revenues continue their slow recovery and benefit costs continue to rise."

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