Monthly Labor Review • June 2007 

Effects of Katrina on New Orleans

Hurricane Katrina devastated the New Orleans economy;

tourism, port operations, and educational services,

the foundation of the city’s economy,

survived, offering a base for recovery

The effects of Hurricane Katrina

on the New Orleans economy

Michael L. Dolfman,

Solidelle Fortier 

Wasser,

and

Bruce Bergman

Michael L. Dolfman is 

Regional Commissioner, 

Solidelle Fortier Wasser 

is a senior economist, 

and Bruce Bergman 

is an economist, all in 

the Bureau of Labor 

Statistics, New York 

regional office. E-mail: 

dolfman.michael@bls.

gov

On August 29, 2005, Hurricane 

Katrina made landfall on the gulf 

coast of the United States, east of 

New Orleans,1 with the storm’s eye passing 

within 10 to 15 miles of the city. The effect 

on New Orleans, as well as on the entire 

coastal region, was devastating.

In the aftermath of the storm, about 80 

percent of the city (much of which is below sea level) was flooded. A recent article 

estimated damages in excess of $200 billion, making Katrina one of the most economically costly hurricanes ever to strike the 

United States.2 Reacting to the widespread 

destruction, the 109th Congress enacted 

two supplementary appropriation bills totaling $62.3 billion for emergency response 

and recovery needs.3 The death toll has been 

estimated at more than 1,200.4 In addition, 

tens of thousands of citizens were evacuated 

to other parts of the Nation.

Besides taking its toll on the human, 

social, and psychological fabric of the city, 

the storm had a notable effect on the city’s 

economy, its labor market dynamics, and its 

individual businesses. Just what these effects 

were has been the subject of some discussion. This article joins the discussion in its 

analysis of employment and wage data.

In what follows, trends in employment and 

wage patterns based on data provided by the 

Quarterly Census of Employment and Wages 

(QCEW) program of the Bureau of Labor Statistics (BLS, the Bureau) are compared before 

and after the storm to measure the extent of the 

losses during the first 10 months (September 

2005 to June 2006) following Katrina.

The findings indicate the extensive effect of 

Katrina on the New Orleans labor market. The 

over-the-year loss to the city economy averaged 

95,000 jobs during the first 10 months after the 

hurricane. The job-loss trough occurred in November 2005, when the employment total was 

105,300 below what it had been a year earlier. 

Ten months after the hurricane, in June 2006, 

the over-the-year job loss had diminished 

to 92,900. The loss in wages during the 10 

months following Katrina was approximately 

$2.9 billion, with 76 percent of it, or $2.2 billion, associated with the private sector.5

The New Orleans economy

In order to understand fully the economic 

impact of Hurricane Katrina on New Orleans, it is important to assess the impact 

of the economic forces driving the city. In 

making this assessment, two approaches offer insights.

The first approach, which occupies the 

next section and to which the analysis returns 

at the end of the article, evaluates the diver-
Effects of Katrina on New Orleans

 Monthly Labor Review • June 2007

sity within the New Orleans economy compared with that 

of the Nation. This comparative and static approach uses 

location quotients based on employment concentration by 

industry sector; it points out which industrial sectors of 

the New Orleans economy have a higher concentration 

of jobs compared with those same industrial sectors of the 

national economy. (If a New Orleans industry has a greater 

share than expected, compared with the U.S. share of that 

industry, then the industry, with its “extra” employment, is 

assumed to be “basic,” or an export industry, because those 

additional jobs are above what a local economy needs to 

serve local needs. Basic New Orleans industries become 

particularly relevant in assessing New Orleans opportunities for recovery, because it is those industries which connect New Orleans to the rest of the Nation.)

Generalizing the analysis from industry concentration 

to include the total New Orleans economy, the second 

analytic approach is a time-focused comparison of changes in the total number of jobs, total wages, and average 

weekly wages, which together define the New Orleans’ 

labor market. Assessing these changes affords additional 

insights, because they represent New Orleans at two different points in time and underscore temporary population displacement and its effect on the local economy. 

This approach, which provides a basis for assessing the 

effects of Katrina, will be utilized throughout the rest of 

the article. 

Export industries of New Orleans

As can be seen in table 1, the New Orleans economy can 

be compared to a three-legged stool, with tourism, port 

operations, and education serving as the legs of the stool 

and thereby providing its foundation.

Tourism (arts, entertainment, and recreation; accommodation 

and food service). As is widely recognized, New Orleans 

is, or at least has been, among the most visited cities in the 

United States. Besides the attraction of its French Quarter, its internationally renowned restaurants, and its firstclass accommodations, a series of celebrations, including 

Mardi Gras, the New Orleans Bowl, the Sugar Bowl, and 

the New Orleans Jazz and Heritage Festival, has drawn 

thousands of tourists to the city.

Port operations (mining; transportation and warehousing). 

Less recognized than tourism is the importance of the 

Port of New Orleans. In combination with the Port of 

South Louisiana located in nearby LaPlace, the Port of 

New Orleans handles the most bulk tonnage in the world. 

About 5,000 ships from nearly 60 countries dock at the 

Port of New Orleans each year. Chief exports—to other 

countries and different regions of the Nation—include 

grain and foodstuffs produced by Midwestern farmers and 

petroleum products mined in the Gulf of Mexico. Among 

the port’s leading imports are chemicals, petroleum, coffee, and cocoa beans. The port handles more trade with 

Latin America than any other U.S. gateway.6

Educational services. Also less recognized than tourism is 

the role of New Orleans as a center of higher education. 

Located within the city are Tulane University, the University of New Orleans, Loyola University New Orleans, 

Xavier University of New Orleans, Southern University of 

New Orleans, Dillard University, and the Louisiana State 

University Medical School. In addition, a number of community colleges and technical schools lie within the city’s 

boundaries. Of special note is the fact that Dillard, Xavier, 

and Southern University—all serving predominantly African-American students—have educated significant numbers of professionals who have resided in the city.

Pre-Katrina

From 1990 to 2000, the U.S. economy, as measured by 

total employment, grew by 19.5 percent, or 21.4 million 

jobs. During the same period, the country’s population increased by 13.1 percent, or 32.7 million people.7

 In New 

Orleans, however, the results were different: during the 

decade, the city lost both jobs and population (as regards 

the latter, more than 12,000 residents, or 2.5 percent of 

the city’s population base).

In 1990, almost half of employment in New Orleans 

(48.5 percent) was associated with four sectors: accommodation and food services (10.9 percent), retail trade 

(9.3 percent), health care and social assistance (9.2 percent), and government (19.1 percent). In the aggregate, 

these four sectors provided 39.8 percent of the total wages 

generated in the city.

Accommodation and food services, a significant part of 

the “three-legged stool,” is also an export New Orleans industry. By contrast, in local industries, such as retail trade 

and health care and social assistance, job levels are related 

to the local population size and reflect the needs of that 

population.

The 1990 New Orleans average weekly wage in private 

industry, $424, was 2.1 percent below the national average of $433, due to fact that a high percentage of New 

Orleans jobs were in the lowest paying sectors, namely, accommodation and food services, and retail trade.8

 Despite 
Monthly Labor Review • June 2007 

 Second-quarter employment location quotients, Orleans Parish, 1990, 2000, and 2004

Industry 1990 2000 2004

			Total private industry (base).................................................. 1.00 1.00 1.00

Agriculture, forestry, fishing, and hunting................................... .02 .03 .03

Mining ........................................................................................ 6.66 6.64 4.62

Utilities ....................................................................................... 1.28 .75 1.00

 Construction .............................................................................. .52 .61 .51

 Manufacturing............................................................................ .38 .34 .30

 Wholesale trade......................................................................... .85 .78 .63

 Retail trade ................................................................................ .79 .73 .71

 Transportation and warehousing ............................................... 2.25 1.63 1.44

 Information................................................................................. 1.02 .78 .90

 Finance and insurance .............................................................. 1.07 .99 .93

 Real estate and rental leasing................................................... 1.14 1.10 .94

 Professional and technical services .......................................... 1.18 1.04 1.15

 Management of companies and enterprises ............................. .87 1.53 1.53

 Administrative and waste services............................................. 1.22 1.11 1.19

 Educational services.................................................................. 2.76 2.16 2.52

 Health care and social assistance............................................. 1.12 1.11 1.04

 Arts, entertainment, and recreation ........................................... .92 2.26 2.19

 Accommodation and food services............................................ 1.53 1.77 1.85

 Other services, except public administration............................. 1.06 1.09 .96

Port operations .......................................................................... 3.02 1.80 1.80

Tourism ...................................................................................... 1.43 1.52 1.90

this relatively low average wage, a defining strength of 

the city’s economy was its wide distribution of industries 

providing employment opportunities. Other than tourism, which represented 12.2 percent of employment, and 

government, which, as mentioned earlier, accounted for 

19.1 percent of jobs, no individual sector dominated the 

economic landscape.

By 2000, a shift had taken place in the New Orleans 

employment base: the city lost 2.3 percent of its 1990 private-sector job base. (See table 2.) But this loss was only 

part of the story. During the decade, the tourism industry increased in importance until, by 2000, it represented 

16.0 percent of employment and 8.0 percent of the total 

wages generated in the city. Government also increased in 

significance and represented 20.8 percent of all jobs and 

24.7 percent of total wages. In 2000, 1 out of 5 people 

working in New Orleans was employed by Federal, State 

or local government, 1 out of 6 in tourism, and 1 out of 

10 in health care.

In 10 years, the national average weekly wage in private 

industry had increased to $648, 13.1 percent higher than 

in New Orleans.9 Thus, in terms of average wages, the 

gap between New Orleans and the Nation had widened. 

Both the level and the change in average wage underscore 

the importance of the “three-legged stool” to the New 

Orleans economy. Although the average New Orleans 

wage was below that of the United States, the city did 

have an array of high-paying industries. Table 3 shows 

the 10 highest average weekly wages among New Orleans 

subsectors in 1990 and 2004. Oil and gas extraction, water 

transportation, and warehousing and storage—all important elements of the “three-legged stool”—were among 

the highest ranked industries in the city. 

Similarly, despite job losses and relatively low average 

wages in the city, a number of subsectors experienced notable increases in wages between 1990 and 2004. Five of the 

10 industries with the largest increases during this period 

were from the “three-legged stool” sectors, as indicated in 

table 4. In all of these subsectors, wages grew at a rate that 

was almost 2 times the all-industry average for the city.

Job and population losses in New Orleans, identified during the 1990s, continued into the 21st century. 

By 2004, the New Orleans economy had lost more than 

16,000 jobs (6.2 percent) since 2000. (See table 5.) The 

city’s population declined by an additional 23,000 residents, or 4.7 percent, during the same period.

By comparison, during this same timeframe U.S. population increased by 4.1 percent, or 11.5 million. Employment in the country, however, remained relatively fixed, 

declining by about 860,000 jobs, or less than 1 percent.10

The average weekly wage in New Orleans private industry 

increased to $643, while in the Nation the average weekly 

Table 1.
Effects of Katrina on New Orleans

 Monthly Labor Review • June 2007

Second-quarter employment and wages, Orleans Parish, 2000

wage rose to $712, about 11.0 percent higher than the 

New Orleans figure. Tourism maintained its importance 

in the city’s economy, representing 16.0 percent of jobs 

and 10.0 percent of total wages.

Despite the overall decrease in the city’s employment 

base compared with 2000, jobs in professional and technical services increased by 3.3 percent from 2000 to 2004. 

With average weekly wages of $964, this was one of the 

highest paying sectors among the city’s private establishments and represented 7.9 percent of total wages, second 

only to health care and social assistance.

By the end of June 2005, private-sector employment in 

New Orleans continued its decline. The second-quarter 

average figure of 191,701 jobs represented a further decrease of about 3,500 jobs, or 1.8 percent, compared with 

the figure for the same quarter the previous year.

Post-Katrina

To gain a clear picture of the effect of Katrina, this section 

presents a series of charts that display various monthly 

time series of over-the-year employment changes from 

2004 to 2006. Monthly data from January 2004 to June 

2006 summarize employment and total pay (exclusive of 

benefits) of workers covered by State and Federal unemployment insurance. Coverage is broad and is estimated at 

97.0 percent of all wage and salary employees working in 

New Orleans during the 2004–06 period.

The methodology presented compares employment 

levels in the current month with those of the same 

month in the previous year. (The 42 data points are thus 

reduced to 30 in each chart.) This approach overcomes 

problems associated with seasonal patterns in employ-

 

Average Percent of Percent Percent of 

monthly Orleans change in Orleans 

employment Parish employment, Parish total

(thousands) employment 1990–2000 wages

 All industries................................... 266.5 100.0 –0.1 $2,088.3 100.0 $603

Private................................................. 211.0 79.2 –2.3 1,572.8 75.3 573

 Agriculture, forestry, fishing, and 

 hunting ........................................... .1 (

1

) 45.1 .3 (

1

) 322

 Mining ............................................... 6.5 2.4 –38.3 109.0 5.2 1,298

 Utilities .............................................. .9 .3 –61.7 13.7 .7 1,217

 Construction...................................... 7.9 3.0 22.1 62.5 3.0 610

 Manufacturing ................................... 11.3 4.3 –30.4 107.5 5.1 730

 Wholesale trade................................ 8.6 3.2 –17.8 86.3 4.1 770

 Retail trade........................................ 21.2 8.0 –14.9 103.6 5.0 376

 Transportation and warehousing ...... 13.0 4.9 –22.7 116.9 5.6 692

 Information........................................ 5.4 2.0 –19.3 57.1 2.7 810

 Finance and insurance...................... 10.5 3.9 –18.0 117.2 5.6 857

 Real estate and rental leasing .......... 4.3 1.6 –8.8 26.5 1.3 475

 Professional and technical 

 services .......................................... 13.4 5.0 –1.2 150.2 7.2 861

 Management of companies and 

 enterprises ..................................... 5.2 2.0 145.1 62.2 3.0 916

 Administrative and waste services.... 17.2 6.4 29.3 75.8 3.6 340

 Educational services......................... 7.5 2.8 –15.1 79.9 3.8 818

 Health care and social assistance .... 26.6 10.0 8.1 185.4 8.9 536

 Arts, entertainment, and recreation... 8.3 3.1 144.0 42.3 2.0 392

 Accommodation and food services... 34.3 12.9 18.0 134.5 6.4 302

 Other services, except public 

 administration................................. 8.7 3.3 –.4 41.7 2.0 368

 Port operations.................................. 19.5 7.0 –28.7 225.9 11.0 893

 Tourism ............................................. 42.6 16.0 31.2 176.8 8.0 319

Federal government............................ 13.9 5.2 1.1 160.0 7.7 885

State government ............................... 18.5 6.9 21.4 153.3 7.3 637

Local government ............................... 23.1 8.7 5.4 202.1 9.7 673

1

 Less than 0.1 percent.

Table 2.

Industry

Total

wages

(millions)

Average

weekly

wage
Monthly Labor Review • June 2007

Average

weekly wage

ment data that are not seasonally adjusted.

Not all industries were affected to the same extent by 

the hurricane, because the economic circumstance of each 

sector varied. Before Katrina, some industries were growing and others were contracting. To evaluate the impact of 

Katrina on rates of growth (or decline), as well as to assess the magnitude of the loss, a trend line was inferred 

from January 2003 to August 2005. The deviation from 

this trend line during the subsequent months indicates the 

impact of Katrina, not only in terms of job loss, but also on 

the rate of sector growth, and both of these were considered 

in evaluating the economic effects of the hurricane.

Describing the loss

Chart 1 presents a picture of job losses in the New Orleans economy from January 2004 to June 2006. Both 

the gradual, but steady, loss of jobs—from January 2004 

to August 2005—and the dynamic and catastrophic loss 

of jobs—from September 2005 to June 2006—are represented. The trend line extrapolates what the New Orleans economy would likely have looked like had Katrina 

not occurred.11 As stated previously, the findings indicate 

Katrina’s devastating effect on New Orleans’ labor market. 

During the first 10 months after the hurricane, the city 

suffered an over-the-year average loss of 95,000 jobs. At 

the trough of the job loss, in November 2005, employment was 105,300 below the previous year’s November 

figure. By June 2006, the over-the-year job loss, though 

smaller, was still substantial (92,900). Lost wages over 

the 10-month period from September 2005 to June 2006 

were about $2.9 billion, with 76 percent of the loss attributable to the private sector. 

Job losses by sector: a visualization

To provide additional information about the effects of 

Katrina, this section examines separate sectors of the New 

Orleans economy to see how they responded to the storm 

and its aftermath.

Tourism. As noted earlier, tourism had been one of the 

bright spots in the New Orleans economy in terms of 

employment. Between 1990 and 2004, jobs grew by 33.0 

percent (10,715) in the sector, and they continued to grow 

in the months preceding the hurricane. As chart 2 shows, 

the industry was particularly hard hit by Katrina. First, 

tourism experienced the largest job loss among all sectors; second, tourism would have shown further gains in 

employment had the hurricane not struck the city.

During the 10-month period studied, the tourism 

industry lost approximately 22,900 jobs. Over the 10 

months following the hurricane, the loss in wages in the 

sector was about $382.7 million.

 Subsectors with the highest second-quarter 

average weekly wage, Orleans Parish, 1990

and 2004

1990

Private industry........................................... $424

 Securities, commodity contracts, and 

 investments ........................................... 931 

 Oil and gas extraction.............................. 926

 Utilities..................................................... 867

 Fabricated metal product manufacturing.. 759

 Chemical manufacturing.......................... 691

 Water transportation................................ 691

 Lessors of nonfinancial intangible assets 670

 Professional and technical services ........ 631

 Warehousing and storage ....................... 628

 Telecommunications................................ 624

 Insurance carriers and related activities.. 624

 2004

Private industry........................................... 643

 Oil and gas extraction.............................. 2,199

 Securities, commodity contracts, and 

 investments ........................................... 2,160

 Utilities..................................................... 1,528

 Water transportation................................ 1,328

 Lessors of nonfinancial intangible assets 1,303

 ISP’s, search portals, and data processing 1,228

 Management of companies and 

 enterprises............................................. 1,112

 Transportation equipment manufacturing 1,100

 Chemical manufacturing.......................... 1,096

 Broadcasting, except the Internet............ 994

Table 3.

Subsector

 Subsectors with the largest percent growth in 

second-quarter average weekly wages, Orleans 

Parish, 1990–2004

1990	 2004

Private industry ........................................... $424 $643 

 ISP’s, search portals, and data processing.. 235 1,228

 Performing arts and spectator sports........ 302 926

 Oil and gas extraction ............................... 926 2,199

 Amusements, gambling, and recreation.... 207 484

 Securities, commodity contracts, 

 investments ............................................. 931 2,160

 Management of companies and 

 enterprises .............................................. 508 1,112

 Educational services................................. 414 816

 Merchant wholesalers, nondurable goods 474 930

 Lessors of nonfinancial intangible assets . 670 1,303

 Water transportation ................................. 691 1,328

Table 4.

Subsector

Average

weekly wage
Effects of Katrina on New Orleans

 Monthly Labor Review • June 2007

Port operations. Chart 3 points up the effects of Katrina 

on port operations. As the chart shows, employment was 

severely affected by Katrina, the sector having added 

jobs prior to the hurricane. After a precipitous decline 

commencing in August 2005, the sector started to rebound. However, the rebound was short lived, and due to 

the higher wages paid in the sector, the overall financial 

impact of the jobs that were lost was disproportionately 

higher than the impact in the tourism sector. During the 

10-month period, port operations saw about 3,500 jobs 

disappear and lost wages amounted to approximately 

$136.1 million.

Professional, scientific, and technical services. In 2005, 

prior to the hurricane, the professional, scientific, and 

technical services sector recorded a loss of jobs during 

most of the year. Like the entire New Orleans economy, 

the sector experienced a precipitous decline after August 

2005, but demonstrated a marked improvement beginning in September. As chart 4 shows, the professional 

and technical services sector was one of the bright spots 

in the New Orleans economy, returning to its pre-Katrina employment trend line by mid-2006. During the 

10-month period, the sector lost approximately 1,680 

jobs overall. The loss of wages was about $84.6 million.

Construction. The construction sector has been the one 

industry registering job gains in the New Orleans economy. Immediately following the hurricane, job losses 

were registered, but as recovery efforts began and then 

took hold, there was an overall increase in employment 

during the 10-month period examined. (See chart 5.) 

The sector posted a net gain of 4,927 construction jobs, 

adding $1.8 million to the city’s economy.

Educational services. The educational services sector 

had experienced volatility in employment even before 

Katrina devastated the city. In the aftermath of the 

Second-quarter employment and wages, Orleans Parish, 2004

Average Percent of Percent Percent of 

monthly Orleans change in Orleans 

employment Parish employment, Parish total

(thousands) employment 2000–04 wages

			 All industries ............................... 249.9 100.0 –6.2 $2,192.3 100.0 $675

Private................................................ 195.2 78.1 –7.5 1,631.6 74.4 643

 Agriculture, forestry, fishing, and 

 hunting .......................................... .1 (

1

) –12.2 .3 (

1

) 352

 Mining .............................................. 4.3 1.7 –33.3 105.5 4.8 1,884

 Utilities ............................................. 1.0 .4 16.9 20.1 .9 1,528

 Construction..................................... 6.4 2.6 –18.6 59.5 2.7 714

 Manufacturing .................................. 7.6 3.0 –33.0 84.2 3.8 852

 Wholesale trade............................... 6.3 2.5 –26.5 72.9 3.3 885

 Retail trade....................................... 19.0 7.6 –10.4 105.4 4.8 426

 Transportation and 

 warehousing.................................. 10.3 4.1 –20.7 99.7 4.5 744

 Information....................................... 5.0 2.0 –7.2 47.9 2.2 733

 Finance and insurance..................... 9.7 3.9 –7.6 120.2 5.5 951

 Real estate and rental leasing ......... 3.5 1.4 –18.6 23.7 1.1 522

 Professional and technical services. 13.9 5.5 3.3 173.6 7.9 964

 Management of companies and 

 enterprises .................................... 4.7 1.9 –10.6 67.5 3.1 1,112

 Administrative and waste services... 16.8 6.7 –2.2 79.4 3.6 364

 Educational services........................ 9.5 3.8 26.1 100.4 4.6 816

 Health care and social assistance ... 26.1 10.5 –1.8 214.3 9.8 631

 Arts, entertainment, and recreation.. 7.7 3.1 –7.8 57.6 2.6 579

 Accommodation and food services.. 35.6 14.2 3.6 156.1 7.1 338

 Other services, except public 

 administration................................ 7.4 3.0 -15.0 40.6 1.9 421

 Port operations................................. 14.6 5.0 –1.8 205.2 9.0 1,080

 Tourism ............................................ 43.2 16.0 .2 213.8 10.0 381

Federal government........................... 12.8 5.1 –8.1 179.7 8.2 1,082

State government .............................. 19.4 7.7 4.5 190.1 8.7 756

Local government .............................. 22.6 9.0 –2.1 191.0 8.7 650

1

 Less than 0.1 percent.

Table 5.

Industry Total wages

(millions)

Average

weekly wage
Monthly Labor Review • June 2007 

c Chart 1. Over-the-year changes in employment, New Orleans, January 2004 to June

Change in

 employment

 –10,000

 –20,000

 –30,000

–110,000

–100,000

 –90,000

 –80,000

 –70,000

 –60,000

 –50,000

 –40,000

 0

 –10,000

 –20,000

 –30,000

–110,000

–100,000

 –90,000

 –80,000

 –70,000

 –60,000

 –50,000

 –40,000

 0

Change in

 employment

Chart 2. Over-the-year changes in employment in the tourism industry, New Orleans, Ja

Change in

 employment

 5,000

 –5,000

 –30,000

 –25,000

 –20,000

 –15,000

 –10,000

 0

Change in

 employment

Jan Mar May Jul Sep Nov Jan Mar May Jul Nov Jan Mar May

2004 2005 2006

Sep

Jan Mar May Jul Sep Nov Jan Mar May Jul Nov Jan Mar May

2004 2005 2006

Sep

 5,000

 –5,000

 –30,000

 –25,000

 –20,000

 –15,000

 –10,000

 0
Effects of Katrina on New Orleans

10 Monthly Labor Review • June 2007

Chart 3. Over-the-year changes in employment in the port operations industry, New Orl

Ja

Change in

 employment

Change in

 employment

Chart 4. Over-the-year changes in employment in the professional services sector, New Orl

Ja

Change in

 employment

Change in

 employment

Jan Mar May Jul Sep Nov Jan Mar May Jul Nov Jan Mar May

2004 2005 2006

Sep

 1,500

 1,000

 500

Jan Mar May Jul Sep Nov Jan Mar May Jul Nov Jan Mar May

2004 2005 2006

Sep

 1,500

 1,000

 500

 –4,000

 –3,500

 –3,000

 –2,500

 –2,000

 –1,500

 –500

 0 

 2,000

 –1,000

 –4,000

 –3,500

 –3,000

 –2,500

 –2,000

 –1,500

 –500

 0 

 2,000

 –1,000

 500

 –500

 –3,000

 –2,500

 –2,000

 –1,500

 –1,000

 0

 –3,500

 –4,000

500

 –500

 –3,000

 –2,500

 –2,000

 –1,500

 –1,000

 0

 –3,500

 –4,000
Monthly Labor Review • June 2007 11

hurricane, the sector reached its nadir in job losses in 

November 2005, after which it began a steady recovery. 

By May 2006, educational services had almost reached 

pre-Katrina employment levels; however, employment 

losses began again soon after. (See chart 6.) During the 

10-month period, educational services lost approximately 1,910 jobs, amounting to $66.4 million in lost 

wages.

Health care and social services. Job losses in the health 

care and social services sector mirrored those of the New 

Orleans economy as a whole. That is, precipitous losses 

occurred immediately following Katrina, and significant 

losses continued throughout the 10-month period studied. (See chart 7.) During that period, health care and 

social services posted a loss of 13,418 jobs, with $377.8 

million in lost wages.

Employment and wages

As shown in charts 2–7, Katrina’s devastating effect on 

the New Orleans economy was not shared equally by 

all sectors. In assessing the 10-month aftermath of the 

hurricane, it becomes apparent that sectors having the 

lowest average weekly wage were hardest hit. Besides 

eliminating jobs from the New Orleans economy, the 

loss of these lower paying jobs had an effect on the entire 

economic structure by raising the average weekly wage 

for the city. In order to further a more complete understanding of that effect, this section divides the post-Katrina period into three specific quarters and analyzes the 

economic impact of the storm during each quarter. 

Fourth quarter, 2005. For the months of October, 

November, and December 2005—the timeframe that 

immediately followed the hurricane—average overthe-year job losses were 103,316, or 41.7 percent of the 

city’s fourth-quarter, 2004, job base. (See table 6.) An 

examination of these job losses reveals that 46.1 percent 

were centered in just three sectors: retail trade, which lost 

12,140 jobs, or 62.8 percent of its job base; accommodation and food services, in which 21,133 jobs, or 59.3 percent of its job base, were eliminated; and health care and 

social assistance, which lost 14,330 jobs, or 56.4 percent 

Chart 5. Over-the-year changes in employment in the construction sector, New Orl

Ja

 1,500

 1,000

 500

 –3,500

 –3,000

 –2,500

 –2,000

 –1,500

 –500

 0 

 2,000

 –1,000

Jan Mar May Jul Sep Nov Jan Mar May Jul Nov Jan Mar May

2004 2005 2006

Sep

 1,500

 1,000

 500

 –3,500

 –3,000

 –2,500

 –2,000

 –1,500

 –500

 0 

 2,000

 –1,000

Change in

 employment

Change in

 employment
Effects of Katrina on New Orleans

12 Monthly Labor Review • June 2007

Chart 6. Over-the-year changes in employment in the educational services se

New Orleans, Ja

Change in

 employment

Change in

 employment

Chart 7. Over-the-year changes in employment in the health care and social assistance se

New Orleans, Ja

Change in

 employment

Change in

 employment

Jan Mar May Jul Sep Nov Jan Mar May Jul Nov Jan Mar May

2004 2005 2006

Sep

Jan Mar May Jul Sep Nov Jan Mar May Jul Nov Jan Mar May

2004 2005 2006

Sep

 500

 –4,000

 –3,500

 –3,000

 –2,500

 –2,000

 –1,500

 –500

 0 

 –1,000

 500

 –4,000

 –3,500

 –3,000

 –2,500

 –2,000

 –1,500

 –500

 0 

 –1,000

 2,000

 –2,000

 –12,000

 –10,000

 –8,000

 –6,000

 –4,000

 0

 –14,000

 –16,000

 –18,000

2,000

 –2,000

 –12,000

 –10,000

 –8,000

 –6,000

 –4,000

 0

 –14,000

 –16,000

 –18,000
Monthly Labor Review • June 2007 1

Fourth-quarter employment and wages, Orleans Parish, 2005

Average Percent of Percent Percent of Over-themonthly Orleans change in Orleans year percent 

employment Parish employment, Parish total change in 

(thousands) employment 2000–05 wages 

				All industries ....................... 144.2 100.0 –41.7 $1,838.8 100.0 $981 29.4

Private........................................ 110.1 76.4 –43.2 1,429.1 77.7 998 34.0

 Agriculture, forestry, fishing, 

 and hunting ........................... (

1

) (2) –27.2 .4 (2) 708 58.7

 Mining ...................................... 4.1 2.9 .3 104.0 5.7 1,943 5.6

 Utilities ..................................... 1.0 .7 –.9 18.3 1.0 1,428 –.9

 Construction............................. 5.3 3.7 –12.0 74.4 4.0 1,076 25.8

 Manufacturing .......................... 6.1 4.2 –20.2 84.0 4.6 1,059 6.8

 Wholesale trade....................... 4.5 3.1 –27.8 67.9 3.7 1,170 14.3

 Retail trade............................... 7.2 5.0 –62.8 52.5 2.9 562 20.9

 Transportation and 

 warehousing.......................... 7.4 5.1 –31.7 99.4 5.4 1,035 22.6

 Information............................... 3.9 2.7 –34.6 47.5 2.6 942 31.2

 Finance and insurance............. 6.1 4.2 –35.0 116.8 6.4 1,481 35.6

 Real estate and rental 

 leasing................................... 1.9 1.3 –46.8 18.6 1.0 758 25.3

 Professional and technical 

 services ................................. 11.8 8.2 –15.7 226.5 12.3 1,481 2.9

 Management of companies 

 and enterprises ..................... 2.7 1.9 –41.1 51.4 2.8 1,462 20.3

 Administrative and waste 

 services ................................. 9.0 6.2 –40.1 109.3 5.9 938 77.0

 Educational services................ 6.0 4.2 –35.6 87.6 4.8 1,117 36.6

 Health care and social 

 assistance ............................. 11.1 7.7 –56.4 111.5 6.1 774 3.3

 Arts, entertainment, and 

 ecreation ............................... 3.7 2.6 –51.3 43.3 2.4 893 41.1

 Accommodation and food 

 services ................................. 14.5 10.1 –59.3 81.1 4.4 430 25.4

 Other services, except public 

 administration........................ 3.6 2.5 –53.8 30.9 1.7 663 31.5

 Port operations......................... 11.5 8.0 –22.9 203.4 11.1 1,118 21.6

 Tourism .................................... 18.2 16.6 –57.9 124.4 8.7 394 33.0

Federal government................... 11.4 7.9 –9.4 195.6 10.6 1,319 17.3

State government ...................... 16.3 11.3 –17.2 158.3 8.6 745 1.9

Local government ...................... 6.4 4.4 –70.3 55.8 3.0 675 –2.0

1

 Fewer than 500 employees.

Table 6.

Industry Total wages

(millions)

Average

weekly wage

NOTE: Percentage bases include the approximately 0.3 percent 

of private employment with nonclassifiable industries.

of its job base. As data from table 5 indicate, these sectors 

were among the lowest paid in the entire New Orleans 

economy. Because of the disproportionate loss of jobs in 

all three sectors, the average weekly wage for those jobs 

remaining in the city rose 29.4 percent.

Although retail trade, accommodation and food services, and health care and social assistance bore the brunt 

of the job losses due to Katrina, practically all sectors of 

the New Orleans economy suffered notable job losses 

that, in effect, paralyzed most of the city. (In the utilities 

and mining sectors, in which the number of jobs was 

relatively small, employment was static on an over-theyear basis).

Job losses during the fourth quarter were due to two 

factors: the destruction of the city’s infrastructure, thereby eliminating places of employment; and the destruction of homes and the subsequent public-health crisis, 

which together forced large segments of the employed 

population to leave the city.

First quarter, 2006. For the months of January, February, and March 2006, a slight improvement in New Orleans’ economic structure began to emerge. The average 

over-the-year loss of jobs during the quarter was 99,114, 

or 41.0 percent of the city’s first-quarter, 2005, base. 

(See table 7.) Over the quarter, 44.1 percent of all job 

losses were associated with retail trade (10,955 jobs, or 

58.0 percent of the industry’s job base), accommodation 

2

 Less than 0.1 percent.
Effects of Katrina on New Orleans

14 Monthly Labor Review • June 20

and food services (19,244 jobs, or 53.6 percent of the 

industry’s job base), and health care and social assistance 

(13,517 jobs, or 58.3 percent of the industry’s job base). 

As a result of this continued disproportionate number of 

job losses at the lower end of the wage scale, the average 

weekly wage for those jobs which remained in the city 

increased by 33.7 percent.

Significant job losses continued throughout many 

of the sectors making up the New Orleans economy. 

However, some rays of light had begun to emerge. On 

an over-the-year basis, employment in the construction 

sector increased by 31.2 percent (about 1,700 jobs) as the 

city began the initial steps to rebuild. A revival in business 

activity also was indicated by a slowing of job losses in the 

professional, scientific, and technical sector (the sector lost 

just 8.8 percent of its job base on an over-the-year basis), with average monthly employment increasing from 

the previous quarter. Clearly, the city’s economy was still 

desperate, but some signs of slight improvement were 

visible.

Second quarter, 2006. During April, May, and June 2006, 

the intensity of job loss continued to abate. By the end of 

the quarter, losses stood at 93,594 jobs, or 38.3 percent 

of the city’s second-quarter, 2005, job base. (See table 

8.) Of all the job losses in the New Orleans economy 

over the quarter, 44.4 percent were associated with retail 

trade (about 9,770 jobs, or 51.4 percent of the industry’s 

First-quarter employment and wages, Orleans Parish, 2006

Average Percent of Percent Percent of Over-themonthly Orleans change in Orleans year percent 

employment Parish employment, Parish total change in 

(thousands) employment 2005–06 wages 

 All industries ..................... 142.4 100.0 –41.0 $1,815.1 100.0 $981 33.7

Private........................................ 115.3 81.0 –39.0 1,458.7 80.4 973 36.8

 Agriculture, forestry, fishing, 

 and hunting ........................... (

1

) (2) –12.2 .3 (2) 428 –.9

 Mining ...................................... 3.7 2.6 –9.8 144.3 7.9 2,970 24.0

 Utilities ..................................... .8 .6 –15.1 19.7 1.1 1,877 –4.8

 Construction............................. 7.2 5.0 31.2 91.8 5.1 985 43.2

 Manufacturing .......................... 6.4 4.5 –21.7 90.1 5.0 1,083 17.2

 Wholesale trade....................... 4.4 3.1 –26.0 73.7 4.1 1,291 20.3

 Retail trade............................... 7.9 5.6 –58.0 57.3 3.2 556 35.0

 Transportation and 

 warehousing.......................... 7.4 5.2 –31.2 90.0 5.0 938 20.1

 Information............................... 3.8 2.7 –33.7 37.5 2.1 762 5.4

 Finance and insurance............. 5.9 4.2 –31.4 111.0 6.1 1,445 18.0

 Real estate and rental leasing . 1.7 1.2 –50.8 16.6 .9 738 40.8

 Professional and technical 

 services ................................. 12.5 8.8 –8.8 177.3 9.8 1,091 9.1

 Management of companies and 

 enterprises ............................ 2.5 1.7 –44.4 51.4 2.8 1,598 –5.7

 Administrative and waste 

 services ................................. 10.2 7.2 –31.9 157.9 8.7 1,186 103.4

 Educational services................ 7.3 5.1 –19.7 89.3 4.9 939 24.4

 Health care and social 

 assistance ............................. 9.7 6.8 –58.3 96.1 5.3 766 25.8

 Arts, entertainment, and 

 recreation .............................. 3.4 2.4 –57.5 25.4 1.4 579 –15.7

 Accommodation and food 

 services ................................. 16.7 11.7 –53.6 96.6 5.3 446 29.7

 Other services, except public 

 administration........................ 3.5 2.5 –50.4 26.2 1.4 575 30.1

 Port operations......................... 11.1 7.8 –25.3 234.2 12.9 1,621 31.7

 Tourism .................................... 20.0 17.4 –54.3 122.0 8.4 468 15.3

Federal government................... 10.1 7.1 –19.0 164.1 9.0 1,248 8.3

State government ...................... 11.0 7.7 –43.3 145.0 8.0 1,015 27.7

Local government ...................... 5.9 4.2 –71.2 47.3 2.6 615 –1.9

Table 7.

Industry Total wages

(millions)

Average

weekly wage

1

 Fewer than 500 employees. NOTE: Percentage bases include the approximately 0.3 percent 

of private employment with nonclassifiable industries. 2 Less than 0.1 percent. 
Monthly Labor Review • June 2007 1

Second-quarter employment and wages, Orleans Parish, 2006

Average Percent of Percent Percent of Over-themonthly Orleans change in Orleans year percent 

employment Parish employment, Parish total change in 

(thousands) employment 2005–06 wages 

		 All industries.......................... 150.8 100.0 –38.3 $1,738.1 100.0 $887 28.2

Private........................................ 122.7 81.4 –36.0 1,388.4 79.9 870 31.6

 Agriculture, forestry, fishing, 

 and hunting .......................... . (

1

) (2) –19.8 .2 (2) 429 .7

 Mining ...................................... 3.7 2.4 –12.1 101.2 5.8 2,117 10.8

 Utilities ..................................... .8 .5 –18.4 14.6 .8 1,389 –6.0

 Construction............................. 7.4 4.9 27.0 97.3 5.6 1,006 44.7

 Manufacturing .......................... 6.6 4.4 –22.1 89.8 5.2 1,042 15.9

 Wholesale trade....................... 4.5 3.0 –24.7 67.7 3.9 1,152 18.4

 Retail trade............................... 9.3 6.1 –51.4 64.3 3.7 534 23.9

 Transportation and 

 warehousing.......................... 7.9 5.2 –29.3 108.0 6.2 1,052 32.8

 Information............................... 3.8 2.5 –18.2 36.6 2.1 742 –3.1

 Finance and insurance............. 5.9 3.9 –29.1 91.9 5.3 1,190 17.2

 Real estate and rental 

 leasing................................... 1.8 1.2 –48.0 18.1 1.0 759 43.2

 Professional and technical 

 services ................................. 12.5 8.3 –7.3 179.6 10.3 1,105 7.5

 Management of companies 

 and enterprises .................... 2.5 1.7 –46.4 –45.4 2.6 1,384 13.2

 Administrative and waste 

 services ................................. 10.5 7.0 –36.1 105.9 6.1 776 83.9

 Educational services................ 8.0 5.3 –7.4 91.4 5.3 883 3.0

 Health care and social 

 assistance ............................. 10.0 6.6 –57.9 104.9 6.0 809 36.0

 Arts, entertainment, and 

 recreation .............................. 4.3 2.8 –46.8 34.1 2.0 612 6.6

 Accommodation and food 

 services ................................. 18.7 12.4 –49.1 102.8 5.9 423 24.8

 Other services, except public 

 administration........................ 4.0 2.7 –43.6 29.0 1.7 557 23.2

 Port operations......................... 11.6 7.7 –24.6 209.2 12.0 1,391 26.8

 Tourism .................................... 23.0 15.2 –48.7 136.9 7.9 458 20.1

Federal government................... 9.6 6.4 –22.8 166.6 9.6 1,332 17.4

State government ...................... 12.0 8.0 –36.6 128.9 7.4 824 1.4

Local government ...................... 6.5 4.3 –69.6 54.2 3.1 645 6.1

Table 8.

Industry Total wages

(millions)

Average

weekly wage

1

 Fewer than 500 employees. NOTE: Percentage bases include the approximately 0.3 percent 

of private employment with nonclassifiable industries.

job base), accommodation and food services (18,070 

jobs, or 49.1 percent of the industry’s job base), and 

health care and social assistance (13,718 jobs, or 57.9 

percent of the industry’s job base). As a result of these 

job losses, the average weekly wage for all jobs rose 

28.2 percent.

Although grim, the economic climate in the city 

was improving. Employment in the construction sector continued to grow, increasing, on average, by an 

additional 2,000 jobs compared with the previous 

quarter’s figure. On an over-the-year basis, employment in the sector increased by 27.0 percent, or 1,580 

jobs. Employment in the professional, scientific, and 

technical sector held steady at 12,500 jobs, but, on an 

over-the-year basis, registered a 7.3-percent decline 

of 988 jobs.

Over-the-year comparison

As noted, the two most significant effects of Katrina were 

a massive loss of jobs and a significant rise in the city’s 

average weekly wage. On an over-the-year basis, average 

weekly wages increased 28.2 percent, to $887. The loss 

of jobs changed the city’s employment patterns, but did 

not alter the relation of the local to the base (export) 

economy. By the second quarter of 2006, 81.4 percent 

of those jobs which remained in the city were associated with the private sector; previously, private-sector 

2

 Less than 0.1 percent.
Effects of Katrina on New Orleans

16 Monthly Labor Review • June 20

employment had accounted for 78.4 percent of all jobs.

Within the private sector itself, however, a redistribution

in employment had taken place. Whereas in the second 

quarter of 2005 accommodation and food services, the largest employer in New Orleans, accounted for 15.0 percent 

of all jobs, a year later the sector represented 12.4 percent 

of employment (still the largest in the economy, though). 

Employment shares for health care and social assistance had 

decreased from 9.7 percent to 6.6 percent, while those for 

retail trade had decreased from 7.8 percent to 6.1 percent. 

By contrast, the following sectors increased their employment shares: professional, scientific, and technical, from 5.5 

percent to 8.3 percent; and educational services, from 3.5

percent to 5.3 percent.

The rise in the proportion of private-sector jobs was 

the result of a notable loss of government jobs: 46.7 

percent, or 24,584 jobs, from the second quarter of 

2005 to the same quarter of 2006. All segments of government experienced significant reductions in employment. Federal employment was reduced by 22.8 percent (2,838 jobs), and State employment decreased by 

36.6 percent (6,944 jobs). However, it was in the local 

governmental sector that massive job losses occurred: 

on an over-the-year basis, the city reduced its governmental workforce by 69.6 percent, or 14,802 jobs. 

Ten-month assessment

Over the 10-month period studied, 1 out of every 4 

private-sector jobs lost (25.4 percent) was in the accommodation and food services sector. (See table 9.) 

Due to lower-than-average wages associated with the 

sector, those lost jobs accounted for just 1 out of every 

7 dollars (14.5 percent) lost in total wages in the New 

Orleans economy. About 1 out of every 6 jobs lost (17.9 

percent), amounting to 1 out of every 5 dollars in lost 

wages (19.6 percent), was associated with the health 

care and social services sector, while 1 out of every 7 

jobs lost (14.3 percent) and 1 out of every 10 dollars in 

lost wages (10.5 percent) were associated with the retail 

trade sector.

Thus, in terms of its effect on the private sector, 

about 6 out of every 10 jobs lost (57.6 percent) and 

nearly half of all dollars in lost wages (44.6 percent) 

were associated with just three sectors: accommodation 

and food services, health care and social assistance, and 

retail trade.

THE NEW ORLEANS ECONOMY CAN BE COMPARED

to a three legged stool, with tourism, port operations, 

and education serving as the legs of the stool and 

thereby providing its foundation. Of interest is how 

Katrina, with its effect on the employment and wage 

dynamics of the city, may have altered that foundation. 

In particular, what influence has the loss of so many 

jobs, concentrated in a few specific industry sectors, exerted on New Orleans’s overall economic picture?

Examining the 2-year change in location quotients 

(from the second quarter of 2004 to the second quarter of 

2006) affords a number of insights into this issue. Despite 

the extensive loss of jobs in the accommodation and food 

services sector, tourism, with a 2006 location quotient of 

1.60 (down from 1.90 in 2004) remains a basic (that is, 

export) component of the New Orleans economy. (See 

table 10.) Port operations, with a location quotient of 

2.22 (compared with 1.80 in 2004), has increased in importance, as has educational services, with a 2006 location 

quotient of 3.30, compared with 2.52 in 2004.

Of special note is the increase in strength recorded in 

the professional, scientific, and technical sector (which 

 Share of Orleans Parish 10-month (September 

2005 to June 2006) private-industry employment 

Employment Wage

loss loss

 Total private industry..................... 100.0 100.0

Agriculture, forestry, fishing, and 

 hunting ............................................... (

1

) (

1

)

Mining .................................................. .4 1.3

 Utilities................................................. .1 .4

 Construction ........................................ (

2

) .9

 Manufacturing...................................... 2.2 3.4

 Wholesale trade................................... 2.1 3.6

 Retail trade .......................................... 14.3 10.5

 Transportation and warehousing ......... 4.3 5.8

 Information........................................... 2.0 2.4

 Finance and insurance ........................ 3.7 6.7

 Real estate and rental leasing............. 2.2 2.1

 Professional and technical services .... 2.2 4.4

 Management of companies and 

 enterprises........................................... 2.5 5.6

 Administrative and waste services........ 7.5 6.2

 Educational services ............................. 2.5 3.4

 Health care and social assistance ........ 17.9 19.6

 Arts, entertainment, and recreation....... 5.1 5.4

 Accommodation and food services....... 25.4 14.5

 Other services, except public 

 administration...................................... 4.8 3.7

1

 Less than 0.1 percent.

2

 Over the 10-month period, construction was the only sector to 

net over-the-year gains in employment.

NOTE: Calculations exclude the approximately 0.3 percent of 

private employment with nonclassifiable industries.

Table 9.

Sector

Percent of—

and wage loss, post-Katrina
Monthly Labor Review • June 2007 17

 Second-quarter employment location

quotients, Orleans Parish, 2006

Total private industry (base)........................ 1.00

 Agriculture, forestry, fishing, and hunting . .03

Mining....................................................... 5.54

 Utilities...................................................... 1.37

 Construction ............................................. .89

 Manufacturing........................................... .43

 Wholesale trade ....................................... .71

 Retail trade ............................................... .56

 Transportation and warehousing.............. 1.73

 Information ............................................... 1.15

 Finance and insurance ............................. .91

 Real estate and rental leasing.................. .78

 Professional and technical services ......... 1.57

 Management of companies and 

 enterprises.............................................. 1.30

 Administrative and waste services ........... 1.16

 Educational services ................................ 3.30

 Health care and social assistance............ .63

 Arts, entertainment, and recreation .......... 1.98

 Accommodation and food services .......... 1.53

 Other services, except public 

 administration ......................................... .84

 Port operations ......................................... 2.22

 Tourism..................................................... 1.60

Table 10.

Industry

Location

quotient

moved from a location quotient of 1.15 in 2004 to 

1.57 in 2006), along with the weakening registered in 

health care and social assistance (which dropped from 

a location quotient of 1.04 in 2004 to 0.63 in 2006). 

Significant job losses in this sector clearly weakened 

its influence in the city’s economy and may indicate a 

real deterioration in the availability of social services, 

which are, of course, critical during a time of recovery 

from a disaster.

Within the New Orleans economy, the location quotient for oil and gas extraction increased from 13.7 in 

2001 to 14.0 in the second quarter of 2006, and that for 

the related industry of marine cargo handling rose from 

18.5 to 20.6 over the same period. Advances in technology have increased the proportion of exploratory wells, 

enhanced offshore drilling capacities, and extended the 

productive, useful life of existing wells. The supplies of oil 

and gas, nonrenewable resources, depend heavily on their 

price, which has fluctuated. 

In addition, the overall New Orleans tourist industry has been based not only on the presence of physical structures, but also on the manifestation of the city’s 

history in the lives of its people. Prior to the hurricanes, 

the unique heritage of New Orleans as a former French 

colony had lived on in its museums (with a location quotient of 2.32) and in the French tradition of converting 

the experiences of daily life into song and music (musical groups and artists had a location quotient of 3.91).12

These location quotients show that, despite the shock to 

the New Orleans economy as a result of Hurricane Katrina, industries associated with the “three-legged stool” 

(that is, tourism, port operations, and educational services) have maintained their relative strength. Moreover, 

the employment outlook overall for these sectors is 

favorable.13

National numbers project that, over the next decade, overall employment in colleges and universities 

is expected to rise by 34.3 percent, with increases of 

25.1 percent in arts, entertainment, and recreation and 

16.6 percent in accommodation and food services.14

Thus, despite a lackluster economy prior to Katrina, 

the structure of the New Orleans economy has a triumvirate source of economic strength—tourism, port 

operations, and education—that bodes well for the future. Current data indicate that the rebuilding of New 

Orleans has resulted in steady, continuing employment 

growth.

Chart 8 presents two trend lines.15 The top line, commencing in January 2004, projects the long-term employment level in New Orleans had Katrina not devastated the city. The bottom line, starting in October 

2006, after the initial destruction and amidst job losses, 

is projected forward. After having hit its low point of 

137,785 jobs in January 2006, the New Orleans employment level continues to increase, suggesting that there 

is a base for recovery. in the post-Katrina New Orleans 

labor economy.
Effects of Katrina on New Orleans

18 Monthly Labor Review • June 20

 225,000

 200,000

 175,000

 0

 25,000

 50,000

 75,000

 125,000

 150,000 

 250,000

 100,000

 275,000

ACKNOWLEDGMENT: The authors would like to thank their colleagues from the BLS Dallas regional office for their assistance in the 

preparation of this article.

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/wiki/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.

Notes

Chart 8. New Orleans employment trends, 20

Jan Mar May Jul Sep Nov Jan Mar May Jul Nov Jan Mar

2004 2005 2006

Sep

Employment Employment

 225,000

 200,000

 175,000

 0

 25,000

 50,000

 75,000

 125,000

 150,000 

 250,000

 100,000

 275,000

May Jul Sep