Katrina +5: Jobs Lag and the Road Home Remains Uncertain

Katrina +5: Jobs Lag and the Road Home Remains Uncertain

If jobs and housing are the barometers by which recoveries are judged, five years after the storm, New Orleans is getting mixed reviews. The job market was initially brisk due to the inevitable uptick in construction and service trade jobs, which were accompanied by higher hourly wages. In many ways, observes Jefferson Parish Councilman Byron Lee, Louisiana was for a long time sheltered from the economic downturn going on just about everywhere else, because it was still in recovery mode.

Lately, however, it’s catching up with the rest of the nation, and “feeling the effects of layoffs and limited job growth,” Lee said. The city of New Orleans and its surrounding parishes have a very small corporate base and the healthcare sector jobs that once fueled a robust middle class sector no longer exist.

“The Charity Hospital system and some of our private hospitals in New Orleans East are still closed,” said Lee. “For the last five years, people have gone back and forth over the footprint of the city, debated the size of the hospitals, who should run them, and the number of beds they should have, but the jobs have not come back.” The state has shifted some of its own financial resources to the municipalities like Baton Rouge where the people with talent and means had relocated.

New Mayor Mitch Landrieu recently executed a deal to purchase Methodist Hospital, and Lee believes that the resulting jobs will play a significant role in furthering the city’s recovery. Indeed, it’s widely believed that Landrieu will be far more successful in leading New Orleans to a more complete recovery than former Mayor Ray Nagin was able to.

“Nagin was not the man for the moment. In many ways his leadership was erratic and over time he lost the confidence of the business community,” said Southern University political science professor Albert Samuels. Based on Nagin’s seemingly limited capacity to deal with many of the problems, a large chunk of recovery money was routed through the Louisiana Recovery Authority.

According to figures provided by the LRA, the state of Louisiana gave the city $200 million to pay for work that the Federal Emergency Management Agency wouldn’t reimburse; $100 million to it’s Sewerage and Water Board; and $372 million for the Road Home program.

Lee believes that Nagin lacked an inner circle of people who possessed the type of upper level management experience needed to help him make decisions. He often appeared to be operating in a chaotic vacuum, rather than as part of a cohesive team. And although Lee recognizes that New Orleans bore the hurricane’s biggest brunt, he also says that Jefferson Parish’s recovery process was much smoother and successful and is approximately 95% complete.
Working closely with its parish president, the parish council developed a plan that focused on bringing back both residents and businesses. It used federal and state loans to rebuild, and relied on FEMA reimbursements to get the parish government up and running again.