Many Left Homeless... And Jobless

Hundreds Of Thousands Find Themselves Out Of Work After Hurricane

(CBS/AP)  With their city mostly underwater and needing a major cleanup, workers in the New Orleans area stand to take biggest hit from Hurricane Katrina.

CBS News Correspondent Mark Strassmann reports that many people aren't just homeless -- they're jobless too. Katrina wiped out thousands of businesses. Along the Gulf Coast, the unemployment rate is expected to soar to 25 percent, reports Strassman.

Hundreds of thousands of people are finding themselves out of work and their livelihoods in limbo following the wrath of Hurricane Katrina.

A chief investment strategist at Charles Schwab says that 28 percent of the New Orleans area was already living under the poverty line, and that they will have the hardest time recovering.

Some economists say that many small businesses probably won't reopen -- especially when it will take "gigantic" efforts just to restore utilities like electricity, water and sanitation.

With the port of south Louisiana, the largest in the country, closed. U.S. commerce will also be slowed. Sixty percent of America's grain exports go through New Orleans, CBS News Correspondent Anthony Mason reports.

And imports are slowing, too, Mason adds. The Gulf Coast is a gateway for everything from coffee to chemicals, plywood and steel. Five of the nation's largest ports are in Louisiana.

Workers in flooded-out New Orleans, which faces major and potentially lengthy cleanup challenges, are taking the biggest hit, analysts said.

"New Orleans is an economic disaster. This tragedy is so unprecedented people could be out of work for three, six, nine months or longer," said Rajeev Dhawan, director of the economic forecasting project at Georgia State University.

By Dhawan's estimates close to 1 million people have been thrust out of work in parts of Louisiana, Mississippi and Alabama because of Katrina.

Phil Hopkins, managing director of U.S. regional services for Global Insight, estimates that at least a half a million people are out of work because of the storm.

The situation probably will propel area unemployment rates now in the single digits to the double digits in coming months — even when one accounts for employment gains from rebuilding efforts, Hopkins said.

The seasonally adjusted unemployment rate in the area of New Orleans, Metairie and Kenner was 4.9 percent in July, Hopkins said based on his calculations.

In another storm-slammed area of Gulfport and Biloxi, Mississippi, the seasonally adjusted unemployment rate in July was 5.7 percent, Hopkins said. That jobless rate could rise to around 20 percent or higher, he added.

"It's a pretty sizable impact. Commerce has come to a standstill in those counties that were hit," Hopkins said.

The unemployment rate for the United States as a whole was 5 percent in July.