Black Economic Growth Is Hard in the Big Easy

Despite their strong influence over the culture and celebratory spirit of New Orleans, blacks still cling to the lower rungs of the city's narrow, often wobbly economic ladder. Here's why.

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To hear locals tell it, black wealth in New Orleans is an oxymoron. Before Hurricane Katrina hit in 2005 and the levees broke, it was one of the poorest cities in the United States, a grim burden borne disproportionately by blacks. Five years later, little has changed except for the dispiriting fact that the city's small black elite and middle class, which were just starting to grow in the 1990s, were pushed back nearly to square one.

As it stands, the gap between black and white income is deep and wide. In 2008, 43 percent of black households in New Orleans made less than $22,458 a year, compared with 18 percent of white families, according to the August 2010 report, "The New Orleans Index at Five: Measuring Greater New Orleans' Progress Toward Prosperity." On the other end of the scale, only 15 percent of black households made more than $67,000, while 45 percent of white families did.

The numbers highlight the stubbornness of New Orleans' economic realities for blacks. Despite the vast contributions by African Americans to the city's unique music, food, celebrations and culture, they have historically been shut out of economic opportunity and upward mobility.

Like blacks in Atlanta, New Orleanians have amassed political power. But unlike their Georgian counterparts, New Orleans' blacks have not moved in great numbers into the middle and upper-class. In 2010, New Orleans' population is gradually ticking upward, including African Americans. But many blacks simply can't afford to return to the city in the wake of Katrina; those who have returned face a landscape with limited options.

"For middle-income people, it's still a challenge for survival," says Silas Lee, a sociologist, pollster and professor of public policy at Xavier University of Louisiana. "You have more stagnation than upward mobility. People either leave or get dispirited. There's a sense of morale being depleted. People don't have the confidence that dreams can be achieved."

Lee's consulting business makes him a third-generation New Orleans entrepreneur. His parents had the city's only black-owned haberdashery. During segregation, prosperous blacks were largely doctors, lawyers, teachers, ministers and small-business owners. Large industry and economic infrastructure stayed in the hands of whites.

That changed little over the years. Lee and others point out that behind New Orleans' mask of celebratory culture and even outrageousness, the city is adamantly conservative, socially and economically. Even now, people keep their distance and their place, he says.

Generations of general economic stagnation in New Orleans stem largely from an undiversified economy, experts like Hill and Lee say. Cotton ruled for a long time, then oil, then tourism. When blue-collar jobs began drying up about 30 years ago, so did economic opportunities for many African Americans. The docks, while active, are increasingly automated. The shipyards have shrunk. Blacks do find work in the tourism industry, but it pays much less than oil industry jobs, where they have far less of a foothold.

Blacks who have started their own businesses over the last 30 years benefited from winning government contracts directed at "DBEs," or disadvantaged business enterprises. But the process failed to create the wealth amongst local blacks or to attract African Americans from elsewhere like the opportunities created in Atlanta. The DBE system was also marred by charges of corruption and cronyism. The new mayor, Mitch Landrieu, announced an overhaul of the DBE process to make it more transparent and, blacks hope, more effective at including them.

Katrina dealt a blow to African Americans of all classes in the Crescent City. Despite the tens of millions of dollars in reconstruction money that flowed to the Gulf Coast, black businesses have seen little of it, Hill says. Laws regarding minimum wages and minority set-asides were suspended for a time, to expedite the process, leaving black-owned companies and construction tradespeople out in the cold.