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Institute for Crisis, Disaster, and Risk Management Crisis and Emergency Management Newsletter Website |
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April
2004
Volume 6
- Number 3 |
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Job Loss statistics and Major Disasters- Hard to Define By Melissa Ashby Precisely defining job losses from a disaster is difficult. A natural disaster may trigger a downward spiral for businesses that is not realized in terms of lost jobs for months or even years. Three well known natural disasters in the 1990’s tested regional economies while costing the Federal Government billions of dollars. These disasters are Hurricane Andrew (1992), the 1993 Midwest Floods, and the 1994 Northridge Earthquake. In contrast, the 2001 World Trade Center Attack is a disaster of different proportions but with considerable economic impact of its own. The precise cost to the job market for each event is hard to assess for a variety of reasons. Two noteworthy reasons include: the widespread region affected in each disaster; and the varying recovery time, dependent on the extent of the damage to the local infrastructure, businesses and the number of displaced people. Economic survival depended on the disaster preparation of individuals and businesses, as well as their ability to take advantage of available assistance to quickly get back to work. Smaller businesses and lower income persons were affected more than the well off and larger business units who had the means to quickly adapt. There are many reasons for this, but in the end it came down to a business’s ability to cope with the lost revenue and potential reconstruction issues that could take years. The following is a summary of facts for each natural disaster: - Hurricane Andrew displaced 200,000 people, cost FEMA $1.8 billion and eventually caused 7,800 businesses to close resulting in 86,000 lost jobs. - The Midwest Floods resulted in entire towns being relocated and 50,000 people having to start over. No exact job loss statistic was found but the total economic loss was $15-20 billion. FEMA costs for this event was $1.17 billion. - The Northridge Earthquake left 22,000 people homeless, caused $41.8 billion in direct losses, $15.2 billion in corporate losses and 69,014 person-years of employment were lost. FEMA costs were $6.95 billion.
The Job loss statistics are difficult to pinpoint in disasters of the magnitude mentioned in this article. Recovery may take years and some businesses may never recover from the devastation. This can’t always be prevented but can be mitigated with proper planning, insurance and creative business practices.
For more information go to the web at: Department of Labor www.dol.gov FEMA www.fema.gov The http://www.ibo.nyc.ny.us/newsfax/Insidethebudget89.pdf
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