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Hurricane Katrina, which struck the United States on August 29, 2005, is considered the deadliest in US history. Despite the fact that the country has been hit by numerous natural disasters, Hurricane Katrina was the most catastrophic. More than 1800 people were killed in New Orleans, and hundreds more thousands were evacuated. More than 80% of the city was flooded, and everything in its path was destroyed. Hurricane Katrina originated as a tropical depression about 200 miles southeast of the Bahamas on August 23, 2005, according to the National Oceanic and Atmospheric Administration (NOAA) (Michael, Wasser, and Bergman 7). The storm established itself well by August 24 where the winds reached about 40 knots. It was named Tropical Storm Katrina. When it approached the southern parts of Florida, it had evolved into a moderate Category 1 hurricane. The storm intensified and strengthened into a hurricane on the 26 August. By August 28, the winds had reached 175 knots. As it made a landfall, the storm charge averaged between 10 and 28 feet (Tierney 121). This was too high for the coastal levees. They could not hold the floods. The storm broke the levees, and more than 80 percent of New Orleans was flooded. The city is mainly below the sea level, and flood evacuation system was destroyed. This made the water stay for long, and the hurricane caused devastating effects in New Orleans. It is estimated that the hurricane caused damages of over $ 81 billion and the cost amounted to the excess of $ 160 billion. This paper investigates the economic impacts of Hurricane Katrina in the New Orleans and the surrounding areas.
One of the major economic impact of Hurricane Katrina was the destruction of tourism in New Orleans. After the hurricane, the tourism industry in the region was destroyed which reduced the amount of revenue the authorities in the region collected. The city of New Orleans was one of the tourist destinations in the country before the hurricane hit it. It attracted people all over the world due to its French Quarter, exceptional accommodation and its restaurants had a global recognition. Additionally, the city hosted a series of globally recognized celebrations such as Mardi Gras, the Sugar Bowl, Heritage Festival, New Orleans Bowl, among others. These occasions brought thousands of tourists in the city. Before the occurrence of the hurricane, the city received $ 9.6 billion every year through tourism (Michael, Wasser, and Bergman 7). The city received more than 7 million tourists from all over the world. Hurricane Katrina eradicated the region's tourism industry. In the year 2006, the city earned less than $ 2.6 million. This was a huge loss of income.
The destruction of the tourism industry also led to the loss of employment. For instance, the industry had turned out to be one of the major employers. Between the year 1990 and 2004, the industry had created more than 10000 jobs, which translated to an increase of 33 percent. After the hurricane hit the city, the loss of jobs was rapid. In less than one year, the tourism industry has lost over 22000 jobs (Thompson 5). For this reason, the hurricane Katrina's most significant economic impact was on tourism.
Hurricane Katrina also destroyed many industries in New Orleans and the surrounding regions. The hurricane resulted in floods in most parts of the city as it is below the sea level. The winds were strong, and the storm surge was high, and nearly all the structures in the region were destroyed. For instance, the hurricane destroyed the sugar industry in Louisiana. The industry's structures and the sugar plantations were also were damaged. According to the report by the American Sugar Cane League, more than 40 percent of the sugarcane plantation's annual yield was destroyed by the floods. Additionally, Louisiana was a home for 50 chemical plants that produced over 25 percent of the chemicals in the country (Gutmann 17). The hurricane destroyed these industries which resulted in a loss of money. Most notably, Hurricane Katrina devastated the local electric corporation significantly. By September 2005, the Entergy New Orleans Corporation filled a bankruptcy protection. The storm had damaged its infrastructure, and the cost of restoration was high. The region was underpopulated after the hurricane which lowered the revenues of the companies. The forestry industry in the area was also adversely affected. The hurricane destroyed more than 1.3 acres of forest land in the region. This resulted in a loss of more than $ 1.3 billion in the industry.
Another economic effect of the Hurricane was a loss of workforce in the region. As a result of the unexpected floods, the number of people who died in New Orleans and the neighboring area was over 1800. The speed of winds of Hurricane Katrina was very fast ranging to over 175 knots. This coupled with the high storm surge, the citizens of the region had little time to flee. The coastal levees were unable to combat the floods, and over 80 percent of the city was covered by water (Michael, Wasser, and Bergman 5). Half of those people who were killed in the floods were below 60 years. This implies that half of the people who died were the working class. The death of such a high number reduced the workforce in the region. Furthermore, thousands of people were able to flee the area before the hurricane struck the land. Since the flooding effects were devastating, many of those people never returned to New Orleans. This reduced the number of people in the area and therefore the workforce is not readily available. This has slowed down the rebuilding of the city.
Another significant economic impact that resulted from the hurricane was the damaging of New Orleans port. This damage was valued at $ 260 million (Tierney 124). The New Orleans port is an important sea route in the transport industry of the United States. The port is, in fact, one of the crucial docks in the world. Before the hurricane, more than 5000 ships from different parts of the world dock at the port. It serves as the primary entry point for the US imports such as petroleum, coffee, and others. The major exports from the US such as foodstuff from the mainland farmers are shipped from the New Orleans port. After the hurricane hit the region, the operations at the port were stopped for a while. This resulted in high losses to the business people who relied on the port for transport. Additionally, the cargo at the port was severely damaged. Furthermore, the destruction of the port resulted in the loss of over 3500 jobs (Michael, Wasser, and Bergman 15). The floods also damaged the inland transport network. As it was indicated earlier, the city is below the sea level. The coastal levees and the flood evacuation system were unable to combat the flooding. This made the water stay for long. This damaged the roads that connect the New Orleans port to the other parts of the country.
Another aspect of the economy that was severely damaged by Hurricane Katrina was the petroleum production industry. The region acts as a significant point of importation of oil and has numerous oil refineries. Hurricane Katrina affected 19 percent of the of the oil production in the country. The hurricane destroyed oil and gas pipelines that lead to oil spillage. This led to economic losses in the region and also nationwide. Many people lost their jobs as a result. The oil prices increased in the region and many other parts of the country. This increased the cost of transport.
In conclusion, this paper investigated the economic impacts of Hurricane Katrina in the New Orleans and the surrounding areas. Hurricane Katrina is regarded as the deadliest natural disaster in the history of the US. More than 1800 people died in the region and thousands were displaced. It is associated with a lot of damage, and its cost was estimated to be over $ 160 billion. The hurricane flooded most parts of the New Orleans city. The significant economic impacts include loss of tourism revenue, reduction of the workforce and unemployment, destruction of industries, and the damaging of the New Orleans port.
Dolfman, Michael, Solidelle Wasser, and Bruce Bergman. “The Effects of Hurricane Katrina on the New Orleans Economy.” Monthly Labor Review (2010): 1-16. Print.
Gutmann, Amy. On Risk and Disaster: Lessons from Hurricane Katrina. University of Pennsylvania Press, 2011. Print.
Thompson, Mark. "Hurricane Katrina and Economic Loss: An Alternative Measure of Economic Activity." Journal of Business Valuation and Economic Loss Analysis 4 (2009). Print.
Tierney, Kathleen. "Hurricane Katrina: Catastrophic Impacts and Alarming Lessons." Risking House and Home: Disasters, Cities, Public Policy (2008): 119-136. Print.
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