The effects of Hurricane Katrina on the New Orleans economy

Monthly Labor Review

Volumn 130, Issue 6, 2007, Pages 3-18

  Dolfman, Michael L ^a   Wasser, Solidelle Fortier ^a   Bergman, Bruce ^a  

^a Bureau of Labor Statistics   (United States)

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EID: 35048898698     PISSN: 00981818     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (15)

1. For the purposes of this article, "New Orleans" refers to the city of New Orleans (Orleans Parish), as opposed to the larger metropolitan area composed of 12 parishes. The city's employment and wage losses were just part of the total economic damage caused by Katrina. The analytic framework presented herein will focus on second-quarter data to maintain consistency with the latest quarter (the second quarter of 2006) for which data are available for New Orleans.
2. Roger D. Congleton, "The Story of Katrina: New Orleans and the Political Economy of Catastrophe," Public Choice, vol. 127, April 2006, pp. 5-30, especially pp. 5, 6.
3. Congressional Research Service, Library of Congress, May 16, 2006, RS22239.
4. See Congleton, "Story of Katrina," p. 5.
5. To avoid the effects of seasonal fluctuation, estimates of employment and wage loss were based on year-to-year differences in monthly employment before and after Hurricane Katrina. Within a given quarter, monthly employment differences were multiplied by the base quarter's average weekly wage. In evaluating the relative shares of the private-sector loss among industry sectors, this analysis was performed at the North American Industry Classification System (NAICS) sector level. Because the over-the-year loss spanned into higher employment in previous years (annual levels of employment had been declining in New Orleans every year since 2001), this method may have slightly overstated the overall employment loss. The wage loss, however, may have been understated, because it was based on year-old average wage levels. The base-quarter average wage, as opposed to the more recent wage, more accurately reflects the occupation and industry mix of the prehurricane economy. Therefore, estimates of employment and wages lost to the hurricane are likely conservative.
6. en.wikipedia.org/wild/New_Orleans,_Louisiana, visited July 5, 2007.
7. Statistical Abstract of the United States: 2006, 125th ed. (U.S. Census Bureau, 2007), table 1, p. 8.
8. The wage figures are from the BLS QCEW program.
9. Ibid.
10. Ibid.
11. The trend line represents the least square fit based on values from January 2004 to August 2005, assuming that over-the-year employment change is linear. Linear trend lines were used throughout this analysis, for both total and sector employment.
12. Location quotients are from the BLS QCEW Program.
13. See Career Guide to Industries, 2006-2007, Bulletin 2601 (Bureau of Labor Statistics, 2007). The arts, entertainment, and recreation sector is projected to increase by 25 percent (p. 248), food services and drinking places by 16 percent (p.255), and educational services by 17 percent With an increase of more than 12 percent, the port facility operations sector is projected within the average range of 14 percent for all industries. Oil and gas extraction is projected to grow worldwide, with the U.S. contribution heavily dependent on relative supplies and prices.
14. Projections data are for 2004-14 and are from the BLS Employment Projections Program.
15. Employment levels from January 2004 through August 2005 and from January 2006 through June 2006 were projected forward with the use of simple linear trend lines.