"In the case of New Orleans, the model we used was the housing situation," says Scott. "The initial Red Cross estimate of houses destroyed was 267,000, and 75 percent of them are in New Orleans. So we argue that the strength and speed of the recovery will be limited by the availability of housing. If someone has eight restaurants, even if they open them back up again right now, they can't staff them because the workers don't have housing."
The housing formula generates sobering statistics on the post-Katrina economic outlook for the state. Even as Scott and his team of economists added 20,000-30,000 jobs for relief workers living in or commuting to New Orleans to their data, they arrived at a total of 337,000 jobs ' a number that effectively wipes out four decades of growth and puts the Crescent City at its 1963 employment levels.
Scott's estimates were also informed by personal experience. He has a townhouse in Old Metairie that took on more than 4 feet of water and has been back to the city numerous times to try and sort out insurance issues. And like so many other Louisiana residents, he has a hard time seeing a clear picture of the timetable for rebuilding efforts. "There's a limit on flood insurance, there's a shortage of contractors, problems with mold remediation â?¦ so when you look at the total number of homes damaged, it boggles the mind. Some people have asked what the margin of error is for this forecast, and we tried to hold our hands apart as far as we could. There's just so much uncertainty."
Even the staggering mid-80s Louisiana recession caused by the oil industry's downturn doesn't compare to Katrina's damage to the economy. "The size and geographic impact are the two main differences," says Scott. "The [oil] recession occurred over a six-year period, and we lost 9 percent of our jobs ' about 148,000 in the state. That's a huge hit, and it hit virtually every metro area in the state. Now we've lost twice as many jobs in about two months, but it's been like a rifle shot aimed directly at New Orleans."
With so much of the damage concentrated in the New Orleans region, Scott emphatically warns of a false sense of economic security in areas such as Baton Rouge, Acadiana and north Louisiana, which mostly emerged physically unscathed from hurricanes Katrina and Rita. "We're already doing surveys in Baton Rouge on how much business there relies on New Orleans, and it's a lot," he says. Suppliers from multiple industries have lost their New Orleans customer base, and the flip side is also true; restaurateurs in particular have scrambled to try and replace goods they bought from New Orleans. The overall ripple effect is significant. (Scott, for example, had four speaking engagements in New Orleans cancelled, and the status of his consulting contract with the city of Kenner is up in the air.)
While the metro New Orleans area staggers to get back on its feet, Scott says displaced residents and businesses will spur economic growth in other regions of the state. He estimates that Baton Rouge will be able to accommodate up to 50,000 new residents and 23,000 jobs, making the capital city the state's largest metropolitan area in 2006. Retail operations in Houma should also increase. Statewide, the already-booming construction industry will make further gains. And oil industry infrastructure repairs will bring increased employment in the Lafayette region.
"[Lafayette] has the servicing firms that are going to be charged with repairing structures in the Gulf of Mexico," he says. "As a result, we bumped up Lafayette by 4,000 jobs in 2006. It's going to take a minimum of one year to repair some of these pipelines and platforms. The Chevron Typhoon, a billion dollar facility, has been inverted. So if you're a fisherman, imagine a $1 billion bobber turned upside down."
While those repairs are under way, Scott says New Orleans' main economic engines ' the petrochemical industry, tourism, shipbuilding and the port system ' can only recover as fast as the housing situation in New Orleans improves. "Bollinger and Avondale ship yards and Lockheed Martin will come back, but they're struggling because they're labor-intensive and workers need places to live.
"The most problematic area is tourism," he adds. "Jazz Fest and Mardi Gras will come back at a smaller level to start, but the biggest problem is convention business. In the past, if you were a convention planner looking at dates between June and November [during hurricane season], there was always a little red flag. Now it's a big red flag."
Ultimately, Scott says federal relief money is the biggest question mark ' and he's discouraged by recent developments. "There are some recent proposals like the Louisiana Recovery Act, where the federal government will buy property and people will then get some of their wealth back. For some people, injection of federal money is going to be critical, because at least part of their wealth is built up in their homes. And we have to do something about the levee system. If you do want to rebuild, who's going to loan you money in an area that's been flooded when the levee system hasn't been fixed? But the unnerving thing is to watch the change [at the federal level] since we've gotten further and further away from the hurricane. The drop in sympathy level is palpable."
The fight to clean up Lafayette Parish could get some added ammunition with two ordinances up for votes Tuesday by the City-Parish Council targeting litter-bugs.
By striking a deal to lessen the blow of health insurance changes on state workers, school employees and retirees, Gov. Bobby Jindal's administration lowered the volume of criticism but gave itself and local school boards a new budget headache.
With the airport tax coming up for a parishwide vote in about a week, the Broussard City Council and its mayor have come out in support of the proposal.
Protesters rallied peacefully in several Louisiana cities in the wake of the Missouri grand jury decision not to indict a police officer in the fatal shooting of Michal Brown.
US cities bidding on Olympics; Guard prevents more Ferguson riots; storm threatens travel and more national and international news for Wednesday, November 26, 2014.
Wednesday's Blogs from the Bog!
The U.S. rep billed LSU for work allegedly performed on the same days Congress voted on major legislation and held important committee hearings on energy and the ACA.
Abysmally low participation by the public has prompted the council to scuttle the 2014 survey with plans to simplify it and try again next year.
The village now says the ordinance will likely be overturned and authorities will more vigorously enforce existing leash laws.
Bill Cassidy cast an early ballot Tuesday, seeking to draw renewed attention to a race that has fallen off newspaper front pages and away from people's minds as they plan holiday meals and shopping schedules.
Battered all night by Baltimore's relentless pass rush, Drew Brees could feel his protection collapsing and Terrell Suggs getting ahold of him as he urgently unloaded a pass to the right flat toward tight end Jimmy Graham.
After a convincing defeat at the polls on Nov. 4, Earl “Nickey” Picard has decided to let bygones be bygones with his former right-hand man Brian Pope, announcing his support for his former employee’s runoff bid to become Lafayette’s next city marshal.
Saturday the athletic department did everything possible to ensure the 2014 Ragin’ Cajun seniors remembered fondly their last home game. Rain and lightning never arrived but turbulence did in the form of the Appalachian State Mountaineers.
Even stranger than the Republican Party’s decision to hold a “unity rally” earlier this month for Congressman Bill Cassidy in a Baton Rouge bar, Huey’s Bar, was the fact that the establishment was named after Louisiana’s most famous Democrat.
Bar Code is not a gay bar.
After failing to pass a medical marijuana bill last year, state Sen. Fred Mills, R-Parks, is telling supporters he will return in 2015 with legislation that focuses on different applications like oils and pills.
Voters, obviously, are not yet tuned into the 2015 ballot, despite the intriguing races it will host.
By now, the story of how longtime LSU coach Dale Brown discovered Shaquille O'Neal has been told many times: Brown happened upon a massive 13-year-old at an army base in Germany, stayed in touch with him and eventually became like a second father.
Fate simply wasn't ready to give the New Orleans Saints a break from longtime nemesis Steve Smith.
Lafayette Police have had a busy day.
Gov. Bobby Jindal's administration will use $130 million in patchwork financing from a tax amnesty program, insurance settlement, uninsured motorist penalties and other excess funds to close most of the state's midyear budget deficit.
Democratic U.S. Sen. Mary Landrieu said she disagrees with President Barack Obama's actions on immigration, hoping the latest controversy doesn't worsen her campaign difficulties.
Gay-rights advocates challenging Louisiana's same-sex marriage ban announced Thursday that they have asked the U.S. Supreme Court to review their case before it is heard by a federal appeals court.
Thinking himself the “son of God,” the man charged with the 2013 killing of an officer of the Chitimacha Tribal Police will not stand trial following a ruling Thursday on his mental competency.
Either Saints coach Sean Payton doesn't want to tip Baltimore off as to who'll start in New Orleans' secondary on Monday night, or he really doesn't know yet.