A look at the road ahead for job markets affected by Irma and Harvey
In the past couple of weeks, two Category 4 hurricanes — Harvey and Irma — have hit the U.S., with a third, José, set to potentially make landfall next week.
These storms have a huge and heartbreaking impact on the families and communities that get caught in their crosshairs — leaving behind tens of billions of dollars in property damage, not to mention insurmountable damage to people’s livelihoods.
But in addition to the infrastructure, buildings, homes and lives that get hurt during hurricanes, sometimes labor markets must be repaired and rebuilt in their aftermath as well. And since these storms can impact both sides of the market, the road to economic recovery can play out as a vicious cycle between hurting and helping either supply or demand.
When analyzing the natural disasters’ impact on the market, the biggest concern is often that businesses will fail to reopen, and leave people without jobs. But when it comes to hurricanes, labor shortages can also be a problem, since people evacuate in advance of the storm and sometimes don’t return for weeks, or even months — if at all.
Displacement can slow rebuilding efforts and the recovery of local economies. Communities need their residents present to staff businesses in the affected areas, so that they can reopen and repair the damage done by the storm.
This issue was a factor in the aftermath of hurricane Katrina in 2005. Many residents of New Orleans left the entire state of Louisiana when they evacuated. The geography of the city meant that it took several weeks for flood waters to recede in some areas before any repair work could even begin. A year later, the population of New Orleans still had about 200,000 people less than it did before Katrina.
When hurricane Andrew hit Florida in 1992, a large number of households were also displaced for an extended period of time. However, the 175,000 people who were still unable to return home one month after the storm remained relatively local. Most of those who did not return to the heavily-impacted Dade County moved just north to Broward County, which is still within commuting distance.
The labor market impact of Andrew was, therefore, limited geographically. While Dade County did see job losses and an increase in unemployment in the months following Andrew, the state of Florida actually saw its overall unemployment rate fall, as recovery construction ramped up and businesses got back to work.
The impact of Hurricane Sandy in 2012 was also limited — but in this case, by time. While initial jobless claims rose in the few weeks after the storm, the labor market seemed to return to equilibrium within a couple of months. This quick recovery can be owed, in large part, to a new strategy government officials put in place for addressing displacements, which has since become the norm.
In the aftermath of Sandy, recovery efforts prioritized the repairs essential to making homes habitable again, such as fixing roofs, windows, plumbing and electricity. And as a result, only 30,000 people hadn’t yet returned home in just one month after the storm.
So as we assess the economic impact of Harvey, Irma, and now José, it’ll be important to pay attention to how many households are displaced, how far they scatter, and for how long they’re gone.
There’s hope that the aftermath of Harvey might follow a similar pattern to that of Sandy. While many had to evacuate, most people have already been able to return to their homes. However, Irma’s recovery could prove more difficult, with residents of some areas being urged by local officials not to return.
Only time will tell how these hurricanes will impact labor markets in affected areas. But we do know that these communities continue to demonstrate such reliance and grace, even in the face of incredible devastation.
So while it’ll no doubt be a long and challenging road ahead for those hit by Irma and Harvey, we’re hopeful these areas and their job markets will rebuild and come back even stronger than they were before.
The quant list:
- Why are there are a record number of unfilled jobs?
- The wage gap between black and white workers continues its troubling growth.
- Median household wages for 2016 were up for the second straight year.
- Employers are turning to the underemployed to find a pool of new talent.
- Is the opioid epidemic behind falling labor force participation rates among men?
This week in the Robopocalypse:
- The Trump administration debuts new autonomous car regulations to mixed reviews.
- Scientists are now teaching robots to swarm like insects.
- NTSB dings Tesla for fatal 2016 crash of one of their semi-autonomous cars.
- Elon Musk and Mark Zuckerberg are both right on AI.
- California regulators send dreams of drone-delivered weed up in smoke.
Written by Cathy Barrera, ZipRecruiter Chief Economist