Source: Flickr (matt coats)
During the run-up to the one-year anniversary of the Deepwater Horizon disaster, you probably read an article or two detailing the questionable use of BP’s money by elected officials on the Gulf Coast. Sensational stories about county officers rewarding themselves and their cronies with bloated contracts and shiny new gadgets during and after last year's spill appeared in The Washington Post and dozens of other newspapers.
Should we be surprised or shocked by these revelations? Show us a disaster, and we will find you egregious examples of profiteering in its wake. It is naïve to suggest that the BP oil disaster, occurring in a poor region with a troubled history of malfeasance, would have been any different.
However, it’s equally naïve to assume that things are now hunky-dory for everyone on the Gulf Coast. A year after the Deepwater Horizon explosion, we do not see legions of “spillionaires” sunning themselves on the region’s sandy white beaches. Instead, we see thousands of dispossessed fishermen, service workers, and everyday people trying hard to make ends meet in a difficult economy. We see people sweating in ever-longer unemployment lines and find their families avoiding trips to the beach, for fear of scaring youngsters with searing images of tar balls and rotting dolphin carcasses washing ashore.
Lest you think we’re playing sad violins without statistics to back up our statements, take a look at the latest labor market report for the Mississippi River Delta. This region bore the brunt of the oil disaster last summer, so it’s instructive to see how things have changed there in recent months. When we compare workforce statistics from February 2010 against those for February 2011 (the most recent available), we find evidence that things have not improved for the average worker in that section of the spill zone.
If anything, they’ve gotten worse.
Trickling Down to Whom?
Before the Deepwater Horizon explosion, Louisiana’s economy had been performing relatively well, with steady rates of labor participation and healthy wage growth despite the downturn.
Yet between February 2010 and February 2011, the unemployment rate in the nine parishes of the combined New Orleans and Houma Metropolitan Statistical Areas jumped more than one percent, while the national unemployment rate for civilian workers fell by nearly one percent.
The increase in joblessness was alarming because of its magnitude and its scope. Unemployment rates rose by 0.9% or more in every one of the seven parishes in the New Orleans Metropolitan Area (Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John the Baptist, and St. Tammany). Similar jumps in unemployment were observed in the two parishes of the Houma Metropolitan Area (Lafourche and Terrebonne).
In Plaquemines Parish, one of the hardest hit sections of coastal Louisiana, the rate of unemployment surged from 5.9% to 8.4% between February 2010 and February 2011, equivalent to a 42.4% jump in the jobless rate. In another wetland parish, St. John the Baptist, the February 2011 unemployment rate (10.5%) stood a full percentage point higher than the national average of 9.5%.
Changes in parish-level unemployment between February 2010 and February 2011. In the top graph, the two parishes furthest left form the Houma Metropolitan Statistical Area (MSA), while the remaining seven form the New Orleans MSA. In the bottom graph, increases in unemployment are shown on an inverted scale. Over the twelve-month period, the regional unemployment rate rose nearly 18%, surging from 6.4% to 7.5% (Sources: Louisiana Workforce Commission, U.S. Census Bureau)
We also see that in the energy sector – source of some of the highest paying jobs in the Mississippi River Delta – employment either held steady or dipped slightly in the months after the spill. The New Orleans Metropolitan Area reported 100 fewer workers in “oil and gas extraction,” with employment falling from 7,600 workers (February 2010) to 7,500 workers (February 2011). Similarly, in the Houma metropolitan area, the number of people employed in “support activities for mining” (i.e., servicing rigs and fuel facilities) fell from 4,900 in February 2010 to 4,700 one year later. Related sectors such as shipbuilding also have taken a hit, with the number of New Orleans area workers engaged in boat construction falling by 500 (equivalent to 8.3% of the Feb. ’10 workforce) since last winter.
The weakening job market has been mirrored by a worsening situation on the salary front. Across much of the nine-parish region, weekly wages for workers have flat-lined since the BP oil disaster. In the New Orleans metropolitan area, workers’ earnings barely budged between February 2010 and February 2011, with average weekly take-home pay moving from $824.33 to $826.19, an increase of $1.86. This miniscule growth in average compensation (0.2%) was about 1/10 of the increase in Consumer Price Index (2.1%) over the same period, suggesting that workers’ pay was not keeping pace with inflation.
These numbers only tell the part of the story for one section of the spill zone. If we were to examine unemployment (and underemployment) throughout the entire Gulf Coast, we would likely find even more evidence of the deleterious impacts wrought by the Deepwater Horizon disaster and its sticky aftermath. While the “gusher of money” spewing from BP may have improved the financial situations of a relatively small number of politically connected residents, these broader statistics show that the wealth has not been trickling down to average folks in the region.
Show Them the Money
The “spillionaire” articles have prompted much-needed conversations about accountability and public spending in government chambers along the Gulf Coast. We too believe that strict oversight will be needed to ensure that legal fines, Clean Water Act penalties, and other payments are directed towards efforts that will restore the environment and improve economic conditions for all affected by the spill.
However, the fact remains that the lingering problems plaguing oil-soaked wetlands and ocean bottoms damaged last year will not be solved without money from the parties that were responsible for this catastrophic event. We hope that lawmakers across the country will look past the screaming headlines and recognize this salient fact as they debate the fate of those funds in the weeks to come.
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