New Orleans: Will Recovery Work?

I just came back from three days in New Orleans; my first trip to the Big Easy since Hurricane Katrina. NELP has been closely monitoring the plight of jobless Gulf Coast residents since the Hurricane, estimated at half a million people. We were there not only to help jobless residents get the jobless benefits they’ve earned, but to access the overall employment situation.

Impressions

That New Orleans is battling back was clear from the first few minutes of our late night arrival. While many buildings are still damaged, the French Quarter has been transformed to an extended construction site. Pick-up trucks dotted the U-shape drives of seemingly every hotel large and small. Beyond the bars of Bourbon Street (long-reported as open by the media) “Now Open” signs dotted smaller restaurants and bars along Decatur and other portions of the Quarter.

This progress has not yet shown up in the employment situation. The state of Louisiana only added 12,000 jobs in the month of December, with payrolls down from 1.7 million from the pre-Hurricane level of 1.9 million. As measured by “Help Wanted” signs, there does seem to be many front-line employment opportunities. Numerous restaurants were desperate for staff. A day labor site at the Shell station on St. Charles and Claiborne had a hundred-plus day-laborers looking for work but the pace of reconstruction seems slow at best.

These two sectors – leisure/hospitality and rebuilding work – are at the heart of New Orleans’ ability to recover its economy as a commercial and tourist hub. Dishwashers, cooks, maids, bellhops, waiters, musicians were the cog of the service sector ‘assembly line of New Orleans.’

Working Class Neighborhoods

A quick drive out to the Upper and Lower Ninth Wards on the east side of New Orleans points to the major challenges that New Orleans face as they seek to rebuild this workforce. The lower ninth ward, east of the Industrial Canal, is devastating. How can I describe it? Picture a large, humble, working class neighborhood with modest houses stretching block after a block condemned to a terribly flawed and half-completed urban renewal plan. Many blocks are completely demolished, while other houses are shells of themselves with a lifetime of clothes and furniture spread everywhere.

To me, the upper ninth ward is more tragic. It too is almost completely devoid of humanity. But, there, most houses seem to have passed the structural test of the Hurricane. I know many of the houses are inhabitable because of severe mold damage and damaged roofs and windows. But, there are houses with 4 walls and a roof and functioning streets, just minutes from downtown. If the government was anywhere to be found, rebuilding seems within reach.

New Orleans’ economy can’t recover without working class neighborhoods being to house the essential workers of the service sector industry. But, when you drive around the ninth ward, there is barely a recovery operation in sight. Where one would hope there were would be construction crews and redevelopment authorities, the only presence of rebuilding appear to be those by brave homeowners and the donated hands of activists at the Common Ground relief center. It was more than ironic that the most vibrant place we visited was the commercial Magazine street in the well-to-do Garden District – a place that mostly houses the kind of folks (accountants, lawyers, business people, real estate brokers) for whom there are relatively few job openings.

So, where is the rebuilding of working class New Orleans? Homeowners (aided by the Advancement Project) are fighting government bulldozing that threatens to destroy the main asset of working families and the potential viability of these neighborhoods. On the other hand, President Bush’s Hurricane Recovery Chief Donald Powell publicly rejected the plan of Rep. Richard Baker (R-LA) to establish a recovery corporation to buy out homeowners and redevelop neighborhoods under a unified approach (see the New Orleans Times-Picayune story). While, there are many trailers scattered throughout the city, but not nearly enough to restock the population as many workers are shockingly making due in substandard tent cities.

Somehow to me it is symbolic of the whole approach from the Bush Administration towards economic development. They have stood idly by while the nation lost thousands of manufacturing jobs during the recession, all the while claiming that their tax cuts had revived the economy. As soon as the media attention died down and the natural gas started flowing again, the recovery was complete as far at they were concerned. They claim to be playing tough love with families that did not have flood insurance - but they are missing the point. With no working class neighborhoods, New Orleans is sunk. Will they realize until its too late?

Activists, Workers and Bureaucrats

I couldn’t close my account of my trip without mentioning some of the resilient people we met. There is a passionate commitment to bring a new sense of worker’s rights and livable wages to a rebuilt economy, especially to confront the abuses facing immigrant day laborers and the greater economic needs that returning families will have. Among returning workers we met at the unemployment office, I found the same de vivre that I had come to know in my pre-Katrina visit to the city. Among bureaucrats, there was a deep commitment to public service in the midst of great demands. I only hope that progressive won’t forget New Orleans to demand that the Federal government keep its commitments and keep directing donations to the People’s Hurricane Relief Fund, ACORN and other activist groups.

Striking for the Middle Class

by Andrew Stettner, December 24, 2005

For 3 days, the Transit Workers Union strike shut down New York City’s subways and buses, grinding the city to a near standstill. The media coverage focused on the inconveniences of stranded straphangers and a war of words between politicians and union leaders. However, the media missed the true meaning of this contract debate: the future of the middle class in New York City, and more broadly in the United States.

New York’s Republican mayor, Michael Bloomberg, perfectly framed this meaning in the New York Times (December 20th).

Mr. Bloomberg said that a walkout would hurt many workers in the hotel, restaurant and garment industries who earn less than the transit workers. The transit workers average $55,000 a year with overtime.

"You've got people making $50,000 and $60,000 a year - are keeping the people who are making $20,000 and $30,000 a year from being able to earn a living," Mr. Bloomberg said. "That's just not acceptable."

Here you have the ‘unacceptable’ vision of our Mayor for working class New Yorkers – jobs that pay less than $30,000. New York City’s economy is growing strongly – but it is growing unevenly, with high paying jobs and lower paying jobs increasing at the same time. From 2000 to 2004, New York City’s middle class (families earning between $35,000 and $150,000 per year) declined at a rate that was four times the national average according to New York’s Fiscal Policy Institute.

The problem is that a family cannot really live on $30,000 in the New York City, with housing and other costs skyrocketing. For example, according to a detailed analysis prepared for the Women’s Center for Education and Career Advancement, a family of one child and one adult needs to earn $42,000 to be self-sufficient in Queens, while a family of four would need $58,000.

Middle Class Life at Stake In New York City

That’s what makes jobs like those at New York City Transit so vital to the city’s health. According to most media reports, the average New York City Transit worker earns between $47,000 and $55,000. While the earnings are modest, the job comes with good health care and retirement benefits.

What do middle class jobs provide our city? At these wages, working families don’t have to depend on publicly funded work supports like Medicaid or Child Health plus that are being stretched by a shrinking tax base. MTA jobs are giving Caribbean and Latino families the kind of opportunities that made Irish-Americans and other European newcomers a mainstay of the region’s middle class. Low-wage workers support the existence of better paying jobs because they provide an attainable ladder to the middle class.

What Wages Do Transit Workers “Deserve”?

Do transit workers deserve these wages? Transit workers do thankless and dangerous work. Bus drivers face hostile customers and murderous traffic all day. Subway workers toil in dark, vermin-infested, century-old subway tunnels. A mistake by a New York City transit worker can meant life or death mistake for riders or the worker. Since World War II, 132 track workers have been electrocuted or killed by trains in the New York subways, 21 in the last two decades.i

Basic necessities, like the ability to go to the bathroom, are a luxury for transit workers. Not only do they deserve these wages, but Transit workers should be exactly the kind of workers who should be able to hold on to a middle class way of life in the 21st century, unlike manufacturing workers threatened by globalization.

Knowledge-driven, high-wage, service-sector economies like that of New York City depend on a web of effective mass transit. Indeed, the recovery of the subway from its graffiti-ridden past was crucial to New York City’s rebirth from the fiscal crisis of the 1970s. Because of a surge in population and public transit usage, the MTA now has a nearly $1 billion surplus this year. The MTA can afford to sustain a fair living wage for the workers that operate the system, and competitive pressures are in favor of this continued middle class niche.

The Contract on the Table and Its Repercussions

The strike was triggered by MTA’s final offer of wage increases 3 percent, 4 percent and 3.5 percent. This represented an improvement over an initial deal of 2 percent, the media reported this as a better deal than what was initially presented. This “raise” proposal is really no raise at all. Inflation is running at 3.5 percent in Northeastern cities, so this salary increase would leave workers treading water. In exchange for a zero percent real raise, TWU had been asked to take a big cut in retirement security by lowering the retirement age from 62 to 55. It was a final offer that was really no offer at all.

But, my guess is that the MTA thought that the TWU might blink and take the deal. There had not been a transit strike in 25 years, and the union and its workers faced huge fines for carrying out a strike that violated the state’s Taylor Law. But if the TWU had simply accepted the deal it have would set the scale downward for all upcoming New York municipal contracts. And, such deal could have caused race to the bottom to spread to service sector jobs like health care and building services that have a chance to pay decent wages to working people in a globalized age.

Striking for the Middle Class

In the face of a bad deal, the TWU decided to draw a line in the sand for middle class New Yorkers--not just for dollars and cents. Transit worker members talked about striking for dignity and respect, as workers who have gotten little as compared other public servants. TWU President Roger Toussaint refused to “sacrifice the TWU’s unborn” by agreeing to a two-tier contract that would cut benefits for new workers while keeping them intact for the current workforce. The battle lines of the strike were most clearly drawn when Toussaint responded to the Mayor’s racially tinged characterization of the TWU as thugs and lawbreakers by invoking Rosa Parks and declaring “There is a higher calling than the law. That is justice and equality."

But, the end of this story has not been written, as the contract has not been settled. At worst, the union seems to have fought the MTA to a draw. The final wage deal will certainly be better than the 2 percent initially presented by the MTA. And, while the MTA did not drop pension security from the talks, reports are that they agreed to back down as a condition of the ending the strike.

The headlines of Friday’s New York Daily News is “Nobody Wins.” They too missed the boat. The Transit Workers Union took a great risk—and we all feared that they would have to go back with a terrible deal or no deal at all in sight. But, regardless of the final outcome, TWU members have won what they sought out to get—respect. They proved that even in the 21st century, working people cannot always be pushed around by their bosses and bought off by their immediate self-interest. The TWU members were willing to give up nine days of pay to win that victory for the middle class, and it is one that we all should cherish.

[i] New York Times, November 26, 2002