Two and a half months after Hurricane Katrina and the resulting flood hammered New Orleans, this NY Times article notes that the rebuilding of the city is being hampered by a scarcity of labor, a condition that was noted in this earlier post.
Given the massive exodus of people from New Orleans and the relunctance of many former residents to return, my sense is that we are experiencing uncharted waters with regard to the rebuilding of New Orleans. The tremendous loss of jobs almost overnight — particularly from small businesses that were destroyed by the damage from the flood — is unprecedented in the modern United States for an area this large. Inasmuch as most of the jobs that are arising as a result of the reconstruction effort are of a different nature from the ones that were lost, many of the people who left New Orleans are not attracted to return by those new jobs. Consequently, my sense is that the key to real rebirth in the area is the re-creation of small businesses, which is a tricky and slow task.