It has been a rough five years for New Orleans. On August 29, 2005, one of the worst catastrophes in American history flooded 80% of the city, destroyed more than 180,000 structures and killed some 1,400 people. (Official death toll figures still -- somehow -- vary by hundreds.) Just as the city was starting to regain some semblance of normalcy, the largest economic downturn in 79 years began, threatening to halt any progress that was made in the recovery. Then, a deepwater drilling rig exploded in the Gulf of Mexico, initiating the largest environmental disaster in U.S. history, putting tens of thousands of locals out of work and threatening to cover the city's shores with oil.

As the Brookings Institution's recent "New Orleans Index at Five" report aptly notes, "New Orleans is in the throes of post-disasters recovery." None of this, however, has been enough to cripple the Crescent City. "The city and metro area have been recovering from Katrina and, in fact, may even be on the path to transformation," concludes the Brookings' report. 

The numbers back this up. The population has rebounded to 354,850 (78% of pre-Katrina levels), and the metro area has recovered 85% of its jobs. This job growth has been tempered by the recession, but although the city lost 1.4% of its jobs between 2008 and 2009, it outperformed the rest of the country, which lost a national average of 4.3% of jobs. Moreover, New Orleans has gained the right jobs -- those that will provide sustainable growth in an increasingly knowledge-based economy. Workers are now regularly finding employment in higher education, legal services and insurance. "In fact, by 2009, jobs in higher education surpassed ship building and heavy construction and engineering to be the fourth largest economic driver in the metropolitan area," states the report.

It is not just higher education that is creating optimism. The entire school system has been reformed, and while some are understandably skeptical of the transition to a charter school-based system, the majority opinion is that the children of New Orleans are receiving a better education now than they have at any other point since Hurricane Katrina -- and perhaps well before then. 

One measure that remains troubling, however, is endemic poverty. The city now has an unacceptable poverty rate of 23% -- a full 10% higher than the national average. Still, this is actually the lowest rate in New Orleans since 1979, and the city's mayor, Mitchell "Mitch" Landrieu, who assumed office May 3, is now trying to publicize the problem, not hide it under the rug as he suggests has occurred in the past. "On the poverty rate, that's not really a good number, but it is down from 28%," he told PBS Newshour in early August. "So it's trending in the right direction. And for the first time, we're actually counting it, talking about it and coming up with a strategy to deal with it."

Until that strategy proves successful, New Orleans residents will have little to cheer. The spirit of those from NOLA, something epitomized by the 2010 HBO television series Treme, is resilient. The people have been through the storm -- literally and figuratively -- and it seems like better days are ahead, even if the progress the city has seen is not occurring universally. "You get a tale of two cities," said Landrieu on Newshour. "Some people are doing better. Some people are doing worse. Some people are doing both at the same time. I do think there is a sense of eternal optimism here, though, as hard as it's been. And that always gives us continued hope."

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Jared Wade is senior editor of Risk Management.

The above article is reprinted from the September 2010 on-line edition of Risk Management Magazine.