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Sunday, June 23, 2019

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Opinions vary on why Louisiana unemployment continues to rise

Opinions vary on why Louisiana unemployment continues to rise

Louisiana’s unemployment rate has been rising despite a strong national economy. While some experts and officials say the trend does not accurately convey the condition of the state’s economy, other observers say it highlights fundamental, longstanding flaws.

“We’ve been a state that has been, for many, many years, not very diversified,” said James Richardson, an LSU economist who serves on the state’s Revenue Estimating Conference. “We really need to find those other industries.”

Louisiana’s unemployment rate hit 5 percent in August, rising for the fifth consecutive month while the national rate held steady at 3.9 percent. Louisiana’s rate was 4.9 percent in July.

The slight uptick is not statistically significant, said Chris Jacobs, senior fellow with the Pelican Institute for Public Policy, which advocates for lower taxes and smaller government among other causes. But Louisiana’s relatively high unemployment rate – currently fourth-worst in the nation – shows the state is just muddling along while other states are growing, he said.

“The state needs a series of reforms,” Jacobs said, citing taxes, government spending and a state constitution that prevents efficient budgeting as areas that need attention.

Some Louisiana residents don’t want to work for low wages and don’t have the education to land higher-paying jobs, said Jan Moller, executive director of the Louisiana Budget Project, which monitors how state policy affects low- and middle-income families. If you have children at home, the pay from a fast-food job might not cover your transportation and child-care costs, he said.

“Certain people just aren’t going to work for $7.50 an hour,” Moller said. “It’s a poverty wage.”

When economist and consultant Loren Scott prepares his annual reports on the state’s economic outlook, he never includes the unemployment rate. That’s because the survey sample size used to estimate the unemployment rate in Louisiana is too small, which sometimes produces misleading results, he said.

The state came out of a 28-month-long recession in the fall of 2017, Scott said, and has been adding jobs and “growing pretty strongly” ever since.

“The employment trends would suggest that the unemployment rate should be going down in Louisiana, not up,” he said. “I think [the unemployment rate is] just a bad statistic, and I would encourage people not to pay too much attention to it.”

While the Lafayette and Houma/Thibodaux areas still suffer from the recent downturn in the offshore oil industry, the Lake Charles and Baton Rouge areas have been bolstered by large industrial construction projects, said Don Pierson, secretary of Louisiana Economic Development. State officials are working to diversify the economy into areas such as information technology and aerospace and aviation, he added.

Louisiana Workforce Commission Secretary Ava Dejoie said employment numbers better reflect the true state of the economy. The number of people employed in Louisiana in August was 2,023,966, the second-highest total ever for that month. Since August 2017, seasonally adjusted private-sector employment had increased by 18,700 jobs to 1,662,400, the LWC says.

The Workforce Commission is steering Louisiana residents into training programs that prepare them for high-wage, high-demand careers, Dejoie said. Over time, state officials hope better education and training will lead to higher workforce participation.