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Hurricane Katrina reignited debates about social policy and the role of government, particularly with regard to addressing racial inequality.1 Media accounts as well as subsequent research have shown that African Americans bore the brunt of the storm, the failing levees, and the slow responses of local, state, and federal governments. Most economic studies on major natural disasters examine the impact of a specific disaster by estimating the dollar costs of the destruction. For example, William Nordhaus, in his 2006 study of the economics of hurricanes in the United States, estimates that Hurricane Katrina and Hurricane Isabel (which hit North Carolina and Virginia in 2003) generated $81 billion and more than $3.3 billion of damage, respectively.2 Yet, such studies have also found a hidden benefit after disasters. Studies that estimate the number of jobs lost find that losses in retail and other sectors are offset by growth in construction.3 The recovery’s length depends on the severity of the disaster and the community’s economic health at the time it occurred. Healthier communities are more resilient than those that are impoverished. When they strike, natural disasters are neutral to class, race, and ethnicity, but owing to residential segregation by income (which is correlated with the age of a community’s homes, its infrastructure, and the amount of impervious surfaces) as well as income and wealth differences (which capture savings and access to credit markets), the impact of and ability to respond to the disaster may be more difficult for lower-income families. Disparate impacts by race and ethnicity occur because minorities are segregated into older communities and have lower income (wages, weeks, and hours worked) and wealth. Thus, if the disaster is strong enough to disrupt an area’s economic activity, low-income families bear the brunt of the losses. Because minorities constitute a disproportionate share of low-income families, 154 11 VVVVVVVVVVV The Labor Market Impact of Natural Disasters WILLIAM M. RODGERS III LABOR MARKET IMPACT 155 they will have fewer resources and less access to the resources needed to recover. Thus, a profound recovery disparity exists in the wake of disasters like Katrina, highlighting the way in which vulnerability and inequality persist throughout the recovery process. This chapter describes the racial differences in employment—one of several effects associated with Hurricanes Katrina and Isabel. First, I summarize published pre- and post-Katrina employment data for Louisiana and Mississippi. One difference between the two states stands out. Mississippi’s aggregate employment was not adversely affected compared with Louisiana’s employment . Much of this difference is the result of the dramatic decline in economic activity in New Orleans. Looking only at state-level data, however, masks what happened at the local level, in such places like Gulfport, Mississippi. Employment in Gulfport also fell as result of Katrina, but the drop was not as large, and the subsequent pace of the recovery has been quicker than in New Orleans. Furthermore, Gulfport makes up a smaller share of the state’s overall employment, so its impact on the state overall was muted. By contrast, New Orleans’s disaster had a more expansive impact on the state. After Katrina, Louisiana’s African American employment fell more sharply compared with the state’s white employment decline. Specifically, African Americans in New Orleans were disproportionately employed in occupations that contracted. For this reason, the storm had a disparate racial impact. Unfortunately, this is as far as one can utilize published Bureau of Labor Statistics and Census Bureau data to tease out the racial differences in Katrina’s employment impact. Because of this severe data limitation, when considering Hurricane Isabel, I shift to utilizing my personal experiences—as a resident of Williamsburg, Virginia; as a board member of the United Way of Greater Williamsburg; and as a professional researcher—to describe that storm’s disparate racial impacts. I conclude by identifying the characteristics of communities that could face the next Isabel, or worse, the next Katrina. My overarching goals are to generalize the conversation about the disparate racial employment impacts of natural disasters and to provide a quantitative framework for future studies that will more rigorously estimate the employment effects of natural disasters. The Macroeconomic Labor Market Effects of Hurricane Katrina Natural disasters are categorized as severe storms, flooding, earthquakes, and tornadoes.4 This chapter focuses on events that have been designated as major disasters, with the understanding that they are large enough to disrupt economic activity and have...

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