Local and state officials should increase worker training, require higher wages for jobs that receive state subsidies, boost the minimum wage or create targeted programs to help areas of New Orleans with high concentrations of poverty to deal with high inequality and the persistent struggles of the working poor, according to a report released Wednesday.
“Despite New Orleans’ economic resurgence, many workers are stuck in low-wage jobs,” according to the report, prepared by University of New Orleans professor Marla Nelson, City University of New York research fellow Laura Wolf-Powers and Georgia Institute of Technology doctoral student Jessica Fisch.
“The income gap has widened, with New Orleans ranking second in income inequality among 300 U.S. cities, and poverty remains entrenched,” the report says. “More than one out of every three children in New Orleans lives in poverty, even though the majority of children in the city have at least one parent in the workforce.”
The study is part of The Data Center’s New Orleans Index at Ten, an ongoing series of studies looking at statistics and issues the region faces 10 years after Hurricane Katrina.
The report estimates a New Orleans household with one adult and one child needs to make $39,996 a year to cover basic expenses.
Using that rate as a benchmark, the New Orleans region has seen some improvements since the early 2000s. While about 23 percent of primary jobs paid that rate in 2002, more than 40 percent of those jobs paid above that amount in 2011, according to the study.
But areas with a high concentration of poverty remain throughout the metro area. The population of those areas, described as “wage deserts” in the study, is about 83 percent black. Those with jobs are primarily employed in the retail and service sectors, health care, social assistance, administrative positions or waste management.
The report makes four recommendations for providing greater opportunities for those residents.
The first is to provide a stable funding source for initiatives aimed at training low-wage workers so they can compete for jobs that demand specific skills and pay a higher wage.
Second, the report says, stricter standards for companies that receive state assistance would boost wages. It notes that the state requires such jobs to pay only about $14.50 an hour, significantly below the wage that would be needed for a family to be self-sufficient.
Another approach would be a direct increase in the minimum wage. The report comes as the City Council is preparing to consider Councilman Jared Brossett’s proposal to require city contractors to pay their workers $10.55 an hour. State law prevents municipalities from setting their own minimum wage. The state currently defaults to the federal rate of $7.25 an hour.
Finally, the report recommends specific initiatives focused on areas of high poverty that would coordinate adult education, workforce development and community economic development.