Mar 062017
Owen Courrèges

Owen Courrèges

There’s no way to sugar-coat this: We came in dead last. Economically, New Orleans is the municipal equivalent of the 2008 Detroit Lions.

According to a report released by the Brookings Institute, New Orleans ranked last among America’s 100 largest cities in terms of economic prosperity between the years of 2010 and 2015. Everything decreased – worker productivity, average standard-of-living, and average wages.

In short, there were no silver linings. Although there was economic investment, particularly in healthcare and tourism, it didn’t provide much overall benefit to those who actually live here.

The report offered some glimpse as to why this might be the case: “Productivity grew fastest in metro areas that specialize in research-, technology-, and capital-intensive advanced industries but declined in metro areas where growth depended on retail, hospitality or health care.”

Thus, the only industries seeing gains are those least capable of actually providing economic prosperity. We’re continuing the slow slide to becoming a city that doesn’t really produce anything – a city that’s “nice to visit, but you wouldn’t want to live there.”

Moving northward won’t help either, and the legacy of Hurricane Katrina can’t be blamed. Baton Rouge joined us near the bottom of the rankings, coming in at 88th.

This is not the first time Brookings has rained on New Orleans’ economic parade. A year-and-a-half ago, Brookings’ Amy Liu posted a blog entry entitled “Post-Katrina New Orleans bouncing back, but not for the better.” The piece emphasized three crucial facts:

  • “First, job growth in metro New Orleans is slowing, and the new jobs are predominantly low-quality.”
  • “Second, the economy has stalled and is not generating enough income to improve living standards.”
  • “Lastly, metro New Orleans’ sluggish economy has been accompanied by growth in poverty and a decline in median household incomes.”

Ouch. There’s no way to put a shine on that news, or so you might think. Despite the manifest lackluster economic performance, the Landrieu PR machine simultaneously made efforts to convince the nation that New Orleans is on a roll.

“Nobody can refute the fact that we have completely turned this story around,” Mayor Landrieu told the New York Times. “For the first time in 50 years, the city is on a trajectory that it has not been on, organizationally, functionally, economically, almost in every way.”

A puff piece by Scott Shalett, who was Landrieu’s chief of staff during his stint as lieutenant governor, followed in The Atlantic. According to Shalett, Katrina and the BP spill “catalyzed opportunity in New Orleans.” We should be so lucky.

“New Orleans is thriving,” Shalett gushed. “The city’s economy and its people are more resilient than ever and ready for a future that will show the world how to rebuild and renew!”

Mayor Landrieu repeated the same line as recently as last December, highlighting recent gains in healthcare and tourism as indicators of success. While nobody will deny that these sectors produce jobs, they tend to be low-paying, and the cost-of-living continues to rise. The fact remains that for most New Orleanians, their personal economic situation simply is not getting better. And it isn’t just stagnating – it’s getting worse.

It’s time to face facts. The New Orleans area is an economic basket case, and Landrieu’s strategy of ignoring reality and patting himself on the back has only served to further his own selfish political interests. Meanwhile, ordinary New Orleanians continue to feel the pinch.

Brookings does have some advice for New Orleans, although it is doubtful that it will be followed. Ms. Liu’s article recommended that New Orleans leverage its competitive advantages, particularly in water management, but also that it bolster existing industries such as metal manufacturing, insurance, and finance. Finally, a regional effort needs to be mounted.

Alas, those are not sexy ideas. They are not the type of trendy pabulum that politicians ordinarily emphasize, like the fanciful notion that New Orleans will become the next Hollywood or the next Silicon Valley. Ultimately, the most civic-minded public officials focus on nuts-and-bolts issues of efficient government and basic services. They don’t govern according to fads.

Landrieu’s tenure as mayor is mercifully coming to an end. The question remains of whether the next mayor will actually work to improve our economic state, or just talk it up. We’ve seen the results of style trumping substance, and hopefully we’ll eschew that moving forward.

Regardless, whoever succeeds Landrieu will be the beneficiary of low expectations. After all, at this point, we have nowhere to go but up.

Owen Courrèges, a New Orleans attorney and resident of the Garden District, offers his opinions for on Mondays. He has previously written for the Reason Public Policy Foundation.

  17 Responses to “Owen Courreges: Secret’s out — the economy of the “new” New Orleans doesn’t help New Orleanians”

  1. Mitch has served the city well, he’s no Nagin.

    • Uh, that’s a pretty low bar to clear.

      To be fair, I think that Mitch has done a pretty good job, but as Owen points out, the jobs being created are not the most promising. Focus on tech, getting HQs back and other emerging industries would have served the community better in the long run.

  2. Landrieu has done next to nothing to attract corporate offices and HQs, many of which left after Katrina. Those are the kinds of jobs we need back. We have almost everything in place – office space is plentiful and the airport is second to none for a city our size. Of course crime is still a problem, but infrastructure and education are making some good improvements.

    The next administration should focus on lowering the barriers to building more housing. That is probably the number problem facing prospective employers and employees (and those trying to retain workers here).

    • There seems to have been considerable construction activity in the CBD which is continuing, as well as the development of the medical strip. There is also much residential construction uptown, especially between Magazine St and the river.

      • Most construction is for hotels or residential, a lot of which is being used for AirBnBs or vacation homes. I’m glad to see the construction myself, but it isn’t contributing to sustainable high-paying jobs.

  3. Owen, whatever happened to the grand plan of the so called Medical Corridor. Never understood the logic behind this idea other than it was an effective way to demolish a lot of downtown blocks and build new buildings. Maybe these buildings will become casinos and hotels, because the city doesn’t have the educated talent to staff a medical corridor of facilities and at the rate it is going, it certainly won’t attract talent from outside of the city. OH well, Good Luck!

    • I’ve seen two medical research scientists and one drug research scientist move to town recently. My anecdotal evidence is not sound statistics, but it is exactly what it was hoped the “Medical Corridor” would stimulate.

      • In a way, you make my point. Who are these research scientists working for in the city? Have to believe it is either LSU Med or Tulane Med. There are no drug companies in NOLA save Dr. Tichenor’s Antiseptic Company. Three medical/drug research scientists will have a lot of square footage to work in the Medical Corridor. In fact so much, they will need a map to avoid getting lost. New Orleans will never change. It is dying from death by a thousand cuts.

  4. Middle class functional people don’t want to move to New Orleans because the public school system is and has been a disaster for five decades. We will never have a skilled workforce as long as the public schools can’t attract middle class families.

  5. All I have seen Landrieu do is help increase the cost of living and decrease quality of living. The list is long. The city council is normally a rubber stamp for Landrieu, and Cannizzaro (a radical leftist himself) had his budget stripped the moment he uttered a word of dissent. Democrats have lost the ability to govern and grow an economy. We can expect continued crime, bigger potholes, worse jobs, higher taxes, more handouts to people of the right race, and more attacks on our history.

    • Landrieu has run city hall as a CEO, and done a commendable job of it. Republican hero Nagin proved to be another thief. Landrieu has demonstrated a level of competence and leadership that no Republican leader in this state can begin to hold a candle to. And he has not been attempting to shtup any minors on the side. The foundations that Mitch has laid during this administration are going to serve this city very well in the coming years.

      You, “Turlet” are well established as a malcontent with no vision beyond insulting “libtards” and parroting the lines you’ve been fed by your news entertainment outlets. I challenge you to make any affirmative statement or any hint at a plan for a future for New Orleans.

      • I am throwing Nagin back over the fence. He was a Democratic mayor, elected by Democrats, who now resides in jail with the other Democrats. I have not said “libtard” and I am unaware of these outlets you speak of which I copy my criticisms of Landrieu and the local government from. TP, Uptown Messenger, The Advocate, the Lens, and the local stations are all firmly leftist. Please list them. It will be like a new pony for me.

        There can be no viable plan for the future of New Orleans so long as the radicals are in power. If the Republican party starts fielding candidates in Orleans Parish, perhaps people can be shown that there is a better way. An affirmative statement would be that the Corps of Engineers is doing great drainage work. This is in spite of Landrieu, who has always been content to let infrastructure crumble. I listed specific criticisms of Landrieu in my original post. Your response was to attack me individually without addressing my actual ideas. Vague unsubstantiated ideas about “competence” and “foundations” do not address my points.

  6. Schools have actually come along way but have awhile to. In addition, we need to fix the crime and reduce the cost of living to have a chance at recruiting companies with high paying jobs. It is astonishing how so many people in this town including Govt benchmark our progress against 2006, pre-Katrina and 20 years ago. The city was in a 50 year decline until Katrina. Nashville, Austin, Atlanta, Raleigh, etc are eating our lunch. If we want to be a first world city with real jobs and quality of life then we need to stop comparing our progress to Nola 2000. Lets not forget that comes on the heels of the US News report of LA ranking 50 our of 50.

    • Totally agree Tom T. Grew up in New Orleans and have moved back several times for family issues and even a job on the last move. Moved into a 126 year old Victorian in Uptown and paid almost $8,000/year in property taxes for a 2,300 square foot home on a 24 x 100 foot lot. Moved back to Scottsdale, AZ and my cost of living compared to New Orleans went DOWN 30%. Financially, New Orleans is totally out of control. Too many ingrained habits in the city to ever compete with cities like Nashville, Austin, etc.

  7. Needs to be pointed out-
    1) End points work horribly against New Orleans. While the 2010 start date makes perfect sense for most of the country (as that is when the economic recovery began in February), the pattern in New Orleans was different from almost every other large MSA. This results from both the after impacts of Katrina (both the declines in 2005/2006 and the money coming in after) and the role of higher oil and gas prices played in weakening the impact of the recession in New Orleans. If you compare employment to January 2008 when the recession began, New Orleans Employment growth outpaces that of the nation (7.3% growth vs 5.0% growth in non-farm employment). This would be a silly endpoint to choose, but you need to be aware of this issue.
    2) All oil and gas cities have suffered recently and compared to 2010. If you look at year over year growth in Houston, Oklahoma City, and Tulsa, they were all down in 2015 (2014 Q3 vs 2015 Q3). This because the cities were having the benefit of a strong oil and gas industry to smooth out the declines and adjustments others experienced in the 2008-2010 period, but this also makes comparisons against 2010 look worse, because there was no catch-up growth period, and in fact, they were having slowdown beginning in 2014.
    3) Tourism is unfairly denigrated in your article. While you want more to your economy than Tourism, New Orleans has been a two industry to three industry town for 50 years. While if we could choose a different set of industries in which to specialize in 1900, we might have, but it is impossible to switch that course at the flip of a dime. While you would like to see more growth in Tourism in terms of productivity, it is unfortunately a labor intensive industry. That said, we have seen continued expansion there which is better than no expansion. If you look at 2015 growth, the fastest wage growth in the country occurred in Las Vegas, a city far more tied to tourism than New Orleans (again, 2014 Q3 to 2015 Q3).

    I cannot speak to the quality of Mayor Landrieu’s administration, but many of the issues highlighted in the Brookings report are different than they are portrayed in the report. Long-term growth in the New Orleans economy requires continued improvement in education within the city, a decrease in crime levels (which have gotten to the point where I think the present an economic drag), and city policies that encourage more/denser residential development within the city

    • Are will still an “Oil and Gas city”? Haven’t they closed the door and turned out the lights?

    • Your three points of contention are excellent. However, you did not support your three solutions, and I find the first and third to be questionable. Do you have an example of a demographically similar city which has ever “improved education” enough spur long-term growth without a corresponding demographic change?

      Why is population density the answer, aside from theoretically increasing the tax base and spurring more entrepreneurship, without a corresponding increase in industry and the business climate to offer skilled jobs? Orleans Parish had greater population density in the 1990s, and it just meant more criminals and government subsidized “low-income” housing. The major suburban parishes nearby are both less dense and more successful. With respect, are these northern solutions that don’t take into account our “peculiar” situation?

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