Last Updated 27 Jul 2020

Economic’s of New Orleans

Category economics
Essay type Research
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We must be Ovid to against our natural heuristics used in decision making and not rely on emotional responses. We must take an analytical look at the situation and weigh its pros and cons. If we rely solely on our common heuristic decision making models we will find ourselves becoming victims to many pitfalls. You have to see the situation for what it really is not what you want it to be. It is important to look at the information at hand and move to rebuild with a logical thought process that allows for the city to grow and at the same time avoid such a disaster from reoccurring in the future.

Hurricane Strain devastated the New Orleans economy; tourism, port operations, and educational services, the foundation of the city economy, survived, offering a base for recovery' (Michael L. Dolman, Solider Fortier Washes, and Bruce Bergman, 2005). When viewing the economics of New Orleans before Strain you have to be honest about its true economic status. It's economic growth and opportunity was based on low wages per house hold across a several industries. These industries were primarily comprised of private sector businesses. Their growth was fueled by eying wages lower than the national mean.

This kept labor costs down and also led to lower annual earnings per house hold. Secondly the primary industries were tourism, shipping (port of New Orleans), fishing and energy. These industries fueled the economy and helped grow the city. With these industries being so important to the local economy in regards to house hold income which in turn meant revenue for the city and the state. New Orleans was still highly comprised of low income families living below the national level. This had a great affect on what would happen to New Orleans after Strain.

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A recent article estimated damages in excess of $200 billion, making Strain one of the most economically costly hurricanes ever to strike the United States" (Michael L. Dolman, Solider Fortier Washes, and Bruce Bergman, 2005). New Orleans must be looked at for what it was and then evaluated to create what it should be. From an economic standpoint New Orleans is a valuable asset to Economics of New Orleans By Reachable country. Goods from all over the world arrive there and are distributed all across the country. It is also the leading port for exports for goods leaving the US and heading to there nations.

The Port supplies the country with economics from this industry and trade process. "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'. (Michael L. Dolman, Solider Fortier Washes, and Bruce Bergman, 2005).

New Orleans is one of the leading cities for energy production with offshore drilling and fossil fuels. It is a major city for refineries. This again adds to the US economy supplying Jobs and needed fuel to the entire nation. This makes New Orleans important both economically and socially because it affects our way of life on a daily bases. Tourism the third major industry supplied many households their only income. This was a strong growth industry. But it only offered low paying Jobs. This kept the average household income down below national standards. This had a major affect on the preparedness of the population hen Strain hit land. 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". (Michael L. Dolman, Solider Fortier Washes, and Bruce Bergman, 2005). Since many Jobs were low paying it was easy for New Orleans to foster investors. Investors could come in and reap strong gains on their initial investment based on the low pay of the city work force. This helped fuel the city and its growth.

This also created a large divide between the haves and the have not's. This deep rift between social classes put the city at a much more dangerous place once Strain came. Since Strain the economics of the city have been hit hard. With a vast portion of the population, some estimated 273,000 not returning to the city. This has had a strong impact on most of the industries. Many of the trained or skilled labor have come from outside the city and do not live permanently in New Orleans. This has also affected the cities economics, seen the most within the tourism industry which is still trying to get back to where it once was.

Bye the end of 2005 Strain had a price tag of around 81 billion dollars. So the question is does the economics of the New Orleans outweigh the cost of rebuilding it? All the constituents involved have paid and will pay a high cost to finish the rebuild and will pay an even greater cost if the devastation comes again. The economics of New Orleans play a significant part in deciding to rebuild the city. Economic growth before Strain was already slowing, "By 2000, a shift had taken place in the New Orleans employment base: the city lost 2. Percent of its 1990 private-sector Job base" (Michael L. Dolman, Solider Fortier Washes, and Bruce Bergman, 2005). So does it pay to rebuild a city that was showing decline in employment rate, household earnings and population before Strain at the costs the devastation had created? With this in mind one must now look at the costs of rebuilding. This is now estimated to be at 200 billion dollars. Early estimates were at economics of the city. With low paying unskilled Jobs being at the fore front of the economy, which revolve around the tourism industry New Orleans is at an economic loss.

The city needs to be up and running to get people back to work, and the tourists oncoming in. "The loss in wages during the 10 months following Strain was approximately $2. 9 billion, with 76 percent of it, or $2. 2 billion, associated with the private sector" (Hallucinate, S. 2006). Constituents The constituents involved in the New Orleans rebuild decision are residents of New Orleans, neighbors of the city in the Mississippi flood plan, the Federal Government and the US tax payers. You must look at these groups and see their involvement in the New Orleans rebuild to make a strong decision.

The residents of New Orleans have the most to lose, many too economically challenged and lacking adequate skills o relocate are forced to face the burden of a ravage city. They have now means to leave and must make do with what was left after Strain. With fewer investors, lagging tourism and a broken social structure they are hit the hardest. "Since the infrastructure of the economy, technology and society are slowed or stopped the length of repair time is much longer and thus much greater expenses are associated" (Hallucinate, S. 2006). Neighboring cities within the Mississippi flood plan also are greatly affected by the New Orleans rebuild.

In order to save New Orleans from flooding many levees may be broken and thus flood other areas. Increase in human induced changes to the Mississippi River, such as sediment deposition reduction can have a dangers affect and lead to more flooding from a lower level Hurricane as well" (Hallucinate, S. 2006). These areas will be forced to bare the affect of saving the city; they will pay with flooded lands. Local government will have a heavy burden when looking at the rebuild process. Social infrastructure such as education, sewer, electric, water and waste removal must be up and running.

The cities dynamics and way of life must be managed by local government. The mayor lays a crucial part in rebuilding and revitalization the city. Local government may change based on population decreases. This fluctuation in population could lead to a change in local government and leadership. It could also affect the state level and state held offices. Strain could change much more than the land it could change the political social landscape of the city as well. All eyes will be on local government to make the best decisions for the city and its remaining residents.

Federal Government will also be on the line. It will be up to the Fed to deliver needed supplies and support to the residents of the city. On an economic base this affects a much greater population than Just New Orleans. The cost of rebuilding the city will be passed onto the tax payer. This may further weaken an all ready weak economy and hamper local economics far from New Orleans. This affect may be felt in an increase in cost of imported goods, fuel and sea food all of which are delivered by the city of New Orleans. So as you can see all constituents are greatly affected by the New Orleans rebuild.

It has a far reaching affect on the entire country. All parities have a strong interest in making sure that such a disaster does not again occur. The key question is how do you prevent it and at what cost do you pay to stop it from once again occurring. The total cost of rebuilding the city of New Orleans is now estimated at 200 billion dollars, this is said to cover all costs and damages to this point. This population. Many who left have not come back. The lack of employment has greatly slowed the rebuilding of the infrastructure of the city.

Even after the rebuild and if the city invests in greater levee systems that can with stand a category 4 hurricane there are no promises the city will not again flood. "It is estimated that if another assister like Strain was to hit New Orleans it would cost more to rebuild the city, "This time it would cost upwards around 56 Billion Dollars" (Hallucinate, S. 2006). This will be on top of what was already spent to rebuild the city and its levees from Strain. There will also be a greater affect on local and regional economies surrounding New Orleans within the Mississippi flood plan.

The city lies 50 feet below sea level and is surrounded by three large bodies of water, the Mississippi river, Lake Pantries and the gulf of Mexico. Plus countless other tributaries that run into the Mississippi and the marsh lands. This all leads to one thing, a huge opportunity for the city to experience flooding in the future. Decision to Rebuild When evaluating the information and looking at future estimates in hurricane increases and costs associated with damage, it is a tuff decision to rebuild New Orleans. There has been an ongoing increase in sea level this greatly affects the city and the possibility of New Orleans flooding even with a less severe Hurricane" (Hallucinate, S. 2006). This with flooding from other areas affecting the Mississippi river can mean serious damage to the city, which suffered 80% flooding room Strain. "A strong trend in the increase of Hurricanes at levels 4 and 5 has been detected. Showing they have almost doubled. Experts believe as temperatures rise so will the increase in strong Hurricanes at levels 4 and 5" (Hallucinate, S. 006). So when weighing all the factors it is important to understand that though New Orleans is a vital part of American culture, history and economics it is not passable to rebuild the city to the way it was. New Orleans must be built to with stand a level 5 Hurricane, by this I mean the levees and water systems. But the city itself must be reduced and drawn in. By doing so areas like the 9th ward which to this day are still baring the devastation of Strain should be brought back to a more natural state and turned into spillways and water runoff areas.

Inland levees must be built to back up and brace on coming water incase existing levees do not hold. By reducing the actual size of the city and creating a level of preparedness for a level 5 Hurricane in New Orleans you will also help protect the Mississippi Flood Plan and the neighbors of New Orleans. The decision to flood one or the other will not come up. Investing this money now will help protect the valuable resource of the New Orleans and the Mississippi flood plain. The shipping, fishing and energy industries will still be able to grow and produce Jobs and products for New Orleans and the nation.

New Orleans would still be able to maintain its cultural ascetic and gain revenue from tourism. The city would be reduced to a size that better fits its economics and population while creating a safer place for investors and business growth. Eventually the fear aversion would be reduced and people would begin to feel that New Orleans is a good investment and a safe place to live. This can only happen in full if New Orleans s reduced in size and the new water ways and levee system is built to with stand an Based on social heuristics and fear aversion the New Orleans rebuild could save the city.

With a large part of the population gone and not coming back and many believing it will happen again, now is the time to change the layout of the city to make it better prepared. Government should use both fear aversion and social heuristics to rebuild the city in a way that Justifies it being done. They should invest to rebuild to a level 5 hurricane based of frequency reports of storms. This would greatly reduce flooding to the entire Mississippi flood plain. They would have this opportunity now since many believe New Orleans will flood again and will not relocate to or move back to the city.

By using risk aversion they can take land build inland levees to support outer levees, they can beautify the city by removing destroyed and abandoned homes and buildings. This is the only way New Orleans with its weak economy and population should be rebuilt. So In closing New Orleans should in part be rebuilt and brought up to a level 5 hurricane readiness. It should not go back to business as usual and wait for the next great storm for history tells us it will eventually come. References Michael L.

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Economic’s of New Orleans. (2018, Jul 24). Retrieved from https://phdessay.com/economics-of-new-orleans/

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