Katrina's Aftershock: Jobless in the Diaspora

Guest Blogger Jared Bernstein is a senior economist at the Economic Policy Institute and the author of the book All Together Now: Common Sense for a Fair Economy.

August 29 marks the one-year anniversary of Hurricane Katrina’s landfall.  In New Orleans, the storm not only scattered homes and belongings, but also thousands of residents who now represent a diaspora of Katrina survivors around the country.

For those of us following the economic numbers coming out of New Orleans and the diaspora, two lessons have become clear over the last twelve months: that race still makes a difference in the opportunity people enjoy, and that our government still has an important role to play in ensuring opportunity for all.

The Bureau of Labor Statistics has been tracking the labor market status of Katrina evacuees.  Its data have some limitations, the biggest of which is that the BLS survey covers only households, and thus misses people still living in shelters, hotels, and churches.  But even with that drawback, the data tell a compelling story about the hardship that African-American evacuees have encountered in starting over.

For African Americans who remain away from home, the share with jobs is extremely low, 32 percent, and unemployment rates are at recessionary levels.   In the most recent quarter, April-June of 2006, the jobless rate for African-American evacuees was 46.5 percent, about where it has been since the Bureau began tracking evacuees a few months after the storm.  In contrast, most blacks who have returned to the city are working: their employment rate was 60 percent last quarter, comparable to the national average for black workers. 

For whites, however, relocation has had virtually no effect on job opportunities.  Sixty percent of white evacuees are working, regardless of whether they stayed in their new communities or returned home.

What explains this vastly different experience for whites and blacks?  The characteristics of black non-returnees are slightly less favorable than those of returnees—they’re a bit younger with somewhat fewer skills—but not enough to explain the 28-point employment-rate gap.

Given the size of that racial difference, it’s hard to avoid the conclusion that whites have simply faced fewer hurdles than blacks integrating into their new communities.

Whatever the causes, it’s apparent that government intervention is needed to clear the pathway home for evacuees of all races, and to address the labor market hurdles that disproportionately face displaced African Americans.   Otherwise, this trend of unequal opportunity will only continue, shutting out hundreds of thousands of storm survivors who have already lost everything.

In the short term, Congress should restore unemployment benefits to the 80,000 Katrina victims who lost their jobs because of the hurricane yet saw their disaster-related unemployment benefits end last month.  That effort should be coupled with incentives to rebuild the most disadvantaged communities rapidly, as well as job training and other services for groups that face the steepest employment barriers.

The promise of America is that opportunity should not depend on where you live or what color you are.  As we mark the one-year anniversary of Katrina, Congress should act to fulfill that promise for those who have lost so much over the last twelve months.