Government & Politics
 

New Orleans vs. Omaha: Can we mimic its Midwestern economic vitality here?

“Our open-air culture and its availability to all is the truly distinctive thing about New Orleans… Lose that, and we’re Omaha. Omaha without even a stockyard.” — Jed Horne, news editor at The Lens

“But what is New Orleans without scandal — Omaha.” — nola.com commenter “campstblue” (online alias of former federal prosecutor Sal Perricone)

Taken together, these quips use backhanded compliments to contrast two cities. They seem to say: New Orleans is a scandalous town with an irresistible culture. Conversely, Omaha might be a bland place, but at least it’s not corrupt.

You could also interpret these quotations as two versions of the same comparison: “But for one thing, New Orleans and Omaha are quite similar.”

Clearly, the Big Easy will never be mistaken for the Big O. A slew of historical, geographical and demographic differences distinguish the two cities. But let’s play with Horne and Perricone’s quotations a bit and see where it takes us.

Here’s one reconfiguration: What would Omaha be without its five home-grown Fortune 500 companies? New Orleans.

Ouch. It smarts to be on the other side of the equation, doesn’t it? Perhaps NOLA sans scandal and parades would be far less than Omaha.

We’re used to everyone — natives, transplants and tourists — reflexively touting the Crescent City’s uniqueness. Come, taste the cuisine, listen to the horns echo off the historic buildings, abandon your cares… But if you desire a good-paying job, better try somewhere else. We have our charms here, but flourishing business isn’t one of them.

Despite the Federal Flood and the BP oil spill, New Orleans is still a desirable tourist destination. It has cultural wealth, upon which the hospitality industry feasts. But tourism is not a long-term solution to New Orleans’ chronic economic malaise. That’s why I think it’s less flattering, but perhaps more sobering, to imagine New Orleans as a “lesser Omaha” rather than vice versa.

For instance, Horne mentioned stockyards. In the 1950’s the Omaha stockyards were the livestock center of the world. Cattle, sheep and hogs arrived by train and truck, deals were made, and the animals were routed to processing facilities.

But the meat-packing business began to change in the 1960’s. Iowa Beef Processors, Inc. built refrigerated assembly-line processing plants near larger and larger farms. They sold pre-cut, boxed meat instead of heavy animal carcasses. The new business model took Omaha’s  middlemen out of the picture. The famed stockyards lost business until the operation was shut down in 1999.

Omaha could have become a ghost town after its signature industry withered. However, a diverse portfolio of home-grown Fortune 500 companies cushioned the blow:

  • Union Pacific

  • ConAgra Foods

  • Berkshire Hathaway

  • Peter Kiewit Sons’, a construction firm

  • Mutual of Omaha

Omaha boasts five more companies in the Fortune 1000. That’s one reason the city’s unemployment rate hovers around four percent, despite a high labor force participation rate. (Granted, Omaha’s gigantic Offutt Air Force Base buoys these jobs numbers.)

And what about New Orleans? In the past 25 years, Fortune 500 companies headquartered here have been purchased, which is what happened in 1997 when Louisiana Land & Exploration Co. was acquired by a Houston oil and gas firm. Or they’ve moved away after merging with other companies; Freeport-McMoRan Inc. moved to Phoenix after acquiring copper-producer Phelps Dodge in 2007. Entergy Corp. remains New Orleans’ lone Fortune 500 firm, though it attempted to merge with Florida Power & Light in 2000.

Instead of a livestock industry, New Orleans has tourism. Warm bodies are shuttled in from all directions, herded into tight event spaces, and bray loudly. The difference is that New Orleans boasts cultural roots that other states can’t duplicate. Neighboring states can’t upend our tourism business model like Iowa did to the Omaha stockyards.

This isn’t an unmitigated blessing, though, because it has led to complacency. We rely too much on our tourism “stockyards.” We end up fighting over the economic pie instead of working to expand it. Our lack of economic diversification is a glaring problem for the city, even if the hospitality industry has no direct threats.

I mentioned the “homegrown” aspect of Omaha’s Fortune 500 companies because I think it’s tremendously important. It’s one thing for a city to offer tax incentives and exemptions to lure a new plant or corporate office. It’s another thing entirely to create the conditions for companies to develop and grow here at home, from the ground up. Homegrown companies are intertwined within their communities, and they reinvest in them. They serve as aspirational examples for future generations of local entrepreneurs.

In June, business leaders and city officials unveiled a plan called ProsperityNOLA, which outlines strategies to diversify and expand the New Orleans economy. Despite the plan’s orientation around the city’s tricentennial celebration in 2018, it all but ignores the tourism and hospitality sector.

The plan designates two industries in New Orleans as “foundational”: transportation and advanced manufacturing. It prioritizes three other “emerging” industries: bioinnovation, digital media, and environmentally sustainable industries (which includes coastal restoration and disaster preparedness).

The authors of the plan recognize that New Orleans’ economic future, if it is to be a bright one, won’t revolve around low-wage jobs in restaurants and hotels. The local economy must build foundations in other sectors. With the right attention, perhaps one of these emerging industries identified by ProsperityNOLA will start to thrive.

Aimee Quirk, Mayor Mitch Landrieu’s top economic development adviser, recently said of the ProsperityNOLA plan: “It’s not just about attracting new business from out of town, or new people to come move here. We also want to provide opportunities for the businesses and the workforce here.”

“Also”? Gracious. Shouldn’t “also” precede the goal of attracting out-of-town entrepreneurs? Shouldn’t providing opportunities for the local workforce and hometown business be the top priority?

Nevertheless, even Quirk’s statement is a step forward after decades in which Louisiana and New Orleans seemed more intent on enticing out-of-state companies rather than retaining homegrown businesses.

The key to the ProsperityNOLA plan will be its implementation. If incentives are allotted to newly-formed sham companies owned by the usual suspects, the plan will fail in all-too-predictable ways. The strategic focus must be on growing companies that will reinvest and create jobs, not on filling the pockets of a soon-to-be-indicted “Businessman A.”

City leaders should invite close scrutiny of the plan’s implementation. We need to know exactly how strategic incentives are allotted and to whom so that we can evaluate the plan. If it succeeds, perhaps it could set the stage for future Fortune 500 success stories— just like those in boring old Omaha.

Next week: Mark Moseley explores the change in mindset required for New Orleans to turn its economy around.

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  • asten77

    What a negative, shortsighted response. Economic diversification, low unemployment, and growth-focused leadership are very good things; using “sports teams” or anything else trying to disparage those positives are kind of ridiculous. While Omaha isn’t a massive tourist mecca, it’s has a significant cultural scene and is a very impressive city. The quality of life and economic vitality are nothing to scoff at. I’ve spent a fair amount of time in both. NOLA is a great, great city, and while an NFL team is a great thing to have, Omaha seems far, far more robust and livable than NOLA.