by Christina Rausch, MSW
Program Manager, MDC, Inc.
“The most important things they were trying to recover from Hurricane Katrina is… the business loss and the job loss… The people here rely on the seafood industry. And if the fisherman can’t get raw materials to continue their business, the people that are inland do not have any jobs as well. I think that is basically what is devastating for people here in the community.”
-Vannarith Suon, President of the Cambodian American Association
Many Vietnamese, Lao, Cambodian, and Thai families living in the southern coastal United States work in the seafood industry and keep their financial assets in their fishing supplies. When Hurricane Katrina hit in 2005, she tore shrimp nets apart, demolished boats, and blew crab traps away. Many fishermen were uninsured and without money to replace their property, and lost their means of providing for themselves and their families. Worse, local emergency managers and other relief organizations did not know who to contact or how, so these families did not get the help they needed to recover.
This scenario is common after a disaster. Low-income and minority families are disproportionately affected by disasters because they are more likely to live in hazardous areas, less likely to be able to protect their assets from damage, and less likely to have resources that aid in recovery. Disasters can knock these families into financial crisis.
Hazards need not have a catastrophic impact on the lives of individuals, communities, or the economy. Several strategies can help disadvantaged communities stem their losses.
Low-income and minority households are rarely included in disaster plans. However, they face challenges when preparing for and responding to disasters. For example, Asian communities had difficulty accessing assistance after Katrina since information and services were nearly entirely in English. Emergency managers are able to best plan in collaboration with low-income community members, and can successfully communicate messages through trusted leaders (for example, faith-based and grassroots groups). The Emergency Preparedness Demonstration, a project supported by FEMA, convened government, residents, and community organizations to test innovative solutions for preparedness in low-income and minority communities.
The Southern Mutual Help Association created an innovative grant and loan product after Hurricane Katrina for low-income fishermen whose businesses had been devastated by the storm. These fishermen were provided with a low-interest loan package accommodating fishermen’s unique income schedule including a repayment plan that required individuals to make payments only twice annually.
Due to the cost of supplemental insurance, low-income households and businesses may not be adequately covered, placing them at risk of losing their livelihoods. Some countries subsidize insurance premiums so they are affordable. Another strategy is to help insurance companies stay afloat after large disasters to ensure communities have access to insurance. Some communities have done this through pooling funds from different insurers and backing insurers in case of serious losses (for example, see the Caribbean Catastrophe Risk Insurance Facility).
Money for Home and Business Improvement and Recovery
Strengthening homes through mitigation protects the equity households have achieved. However, low-income families may need financial support to protect their home. Rebuilding after a disaster is also costly; even if a family has insurance, deductibles often apply and public funds do not cover all costs. Low- and no-interest loans can help low-income homeowners protect their equity (for example, see Enterprise Corporation of the Delta/Hope Community Credit Union). In addition, microloans have infused significant capital into low-income communities. These products are designed to increase access to capital that may not be otherwise available because conventional banks will not assume high risks.
These strategies require businesses, residents, government, and community-based organizations to work together. Public/private partnerships are essential to secure community assets and promote economic opportunity. Preserving the assets of all community members promotes a more resilient recovery.
For more information or to learn about the Emergency Preparedness Demonstration, contact:
Christina Rausch, MSW