Saturday, October 08, 2005

Low wages, taxes in New Orleans

Employers who pay low wages are having a hard time finding people to take those jobs in the aftermath of the hurricane.

A cutthroat, post-hurricane labor market has sent wages skyrocketing in the fast-food industry and prompted some of the New Orleans region's biggest chains to offer workers thousands of dollars in signing bonuses, perks typically associated with higher-paying white-collar jobs.

Burger King recruiters have been visiting federal disaster recovery centers and newly reopened high schools offering a $6,000 bonus, paid in monthly installments, to anyone promising to work full-time at a metropolitan New Orleans restaurant for at least a year. New part-time workers are being offered $3,000 bonuses.

In other news, tax collectors will have a hard time collecting taxes for property that no longer has houses. I heard the other day that upwards of 800,000 houses have been either completely destroyed or made uninhabitable as the result of huricane damage.

After a press conference Tuesday in which New Orleans Mayor Ray Nagin announced the city was laying off roughly half its 6,000 employees, finance director Reggie Zeno explained that the city's sales-tax revenue had fallen from about $13 million per month to almost nothing. The layoffs were expected to save the city up to $8 million a month.

Zeno called property-tax revenue "next year's problem." But it could be a big problem indeed.

Much of the heart of the city's tax base, from eastern New Orleans to Gentilly to Lakeview, has been decimated by floodwaters. And a provision in Louisiana law requires assessors to reappraise all property that has been "overflowed" by water.

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