No city has endured what New Orleans suffered in 2005, resulting in such dramatic changes in the city, but a monster like Hurricane Katrina is not the only reason that some places like the Crescent City are facing a new economic paradigm: Population numbers go down, but residents are growing wealthier overall.
What happened in New Orleans is obvious enough, because of the dramatic population shifts from pre-Katrina levels. What caused that to happen in other cities is not as obvious, but a similar effect is attracting attention from urban leaders around the country.
A city like Beaumont, with refineries and other energy interests as its Louisiana counterparts across the Sabine River, is one in which the population has gone down but wealth is significantly up, too.
Good growth was once thought to be contingent on rising populations as well as incomes, but Stateline.org, the online news service, recently reported in Governing magazine on cities diverging from that familiar storyline.
They include New Orleans, obviously, but also the old Steel City of Pittsburgh.
Since 2000, the number of people in Pittsburgh has declined by 95,000 but income per person is up 24 percent in the same period.
Some of the cities have high-paying jobs in energy, like Beaumont’s refineries, or metro New Orleans — not so much in the city itself, but in the Mississippi River parishes. “Others have managed to reshape their manufacturing legacies for a new economy,” a reference to Pittsburgh’s universities, centers of technology and robotics.
“The story in Pittsburgh is very positive, and other metro areas are looking to it as an example of the transformation that might be possible,” Guhan Venkatu, who wrote an economic history of the area called “Rust and Renewal” for the Federal Reserve Bank of Cleveland, told stateline.org.
The story in Pittsburgh has been examined up close by civic leaders from Baton Rouge in a 2010 visit.
Experts, though, debate whether declining populations is necessarily a good thing, given that many higher-paying jobs in health care, for example, are dependent on having people to consume those services.
For New Orleans, in particular, where the city has a robust tourism economy, rising incomes are great but visitors need a great many workers to provide the positive experience they are paying for. Also, while petrochemical manufacturing is unquestionably a high-tech industry, it is not necessarily the day-to-day employer like many tech companies are. That may change in Louisiana with companies like IBM in Baton Rouge, GE Capital and DXC in New Orleans and CGI in Lafayette.
In Baton Rouge, counting the nine-parish metropolitan area, there has been both population and wealth growth — what most communities surely want.
Where the once-reliable connection between population growth and wealth has broken down, the ingredients of economic growth remain in fundamentals like education, including investments in colleges and universities.
Whatever the overall growth rate, if we don’t put real money into those centers of knowledge, the path to wealth is much more uncertain, for individuals and for communities.