Louisiana’s employment performance more mixed than Jindal portrays

8th July 2013   ·   0 Comments

By Tyler Bridges
thelensnola.org

Gov. Piyush “Bobby” Jindal touts good news about the state’s economy at every turn.

But here’s something that he never mentions: Louisiana’s unemployment rate has risen sharply since he took office, from 3.8 percent in January 2008 to 6.8 percent in May.

The national unemployment rate has also risen during that time, from five percent to 7.6 percent — but not as fast as Louisiana’s.

There’s more job news that Jindal doesn’t discuss: Louisiana’s jobless rate has increased 1.2 percentage points since December while the national rate has fallen 0.2 percentage points.

To be sure, Jindal can point to numerous economic achievements during his tenure. Private companies are investing billions of dollars in natural gas and chemical facilities along Interstate 10. The state’s economic output has risen faster than the nation’s. In May, CEO magazine reported that Louisiana’s rank had risen once again in its “Best & Worst States for Business” survey.

And Hurricane Katrina distorted the normal fluctuations of the unemployment rate.

But the unemployment numbers are important because they provide a clear gauge of the state’s economic performance during Jindal’s tenure.

“When we first got elected to office,” Jindal told a group of business leaders from Lake Charles on May 7, “we said job creation was our No. 1 priority.”

Employment Figures Show Mixed Performance

The federal Bureau of Labor Statistics measures employment two different ways.

One measure, called the Current Population Survey or the household survey, shows that Louisiana has lost 6,200 jobs since Jindal took office. This is the employment figure that is used to calculate the unemployment rate.

The other measure, called Current Employment Statistics or the employer survey, shows that Louisiana has gained 18,100 jobs.

Jindal administration officials believe that the latter measure is more accurate in the short-term because it uses a larger sample.

Based on that survey, Louisiana has gained 34,200 jobs in the private sector since January 2008 and lost 16,100 federal, state and local government jobs.

“One of Jindal’s real initiatives has been a cutback in the public sector,” said Dave Norris, director of the Enterprise Center at Louisiana Tech University in Ruston. “We’ve been shrinking government, but the private sector hasn’t been ready to invest enough.”

Katrina Makes Comparison Difficult

By either measure, Jindal has not matched the jobs record of his predecessor, Gov. Kathleen Blanco. During her single term, from January 2004 to December 2007, Louisiana created 41,950 jobs according to the household survey and 21,100 jobs under the employer survey.

Jindal administration officials are quick to point out that Hurricane Katrina skewed those labor figures. The unemployment rate spiked after Katrina struck, from 4.9 percent in August 2005 to 11.2 percent in September. But by April 2006, as the federal government, insurers and residents spent billions of dollars to rebuild metro New Orleans, it had dropped to 3.9 percent.

Jindal officials contend — and economists agree — that federal and private spending artificially lowered the state unemployment rate to 3.8 percent when he took office in January 2008.

That money “has almost entirely gone away,” said Stephen Moret. As Jindal’s secretary of Louisiana Economic Development, he re­cruits companies to come to the state and encourages existing companies to expand their operations.

Curt Eysink, executive director of the Louisiana Workforce Com­mission, which oversees the state’s employment efforts, argues that Jindal’s job numbers have taken a hit because of the national recession that began in late 2007 and ended in mid-2009.

“The national economy is the greatest influencer on Louisiana,” Eysink said. The sluggish growth after the recession “is still the thing that’s preventing our rate from returning to the level before.”

Eysink also noted — as Jindal has repeatedly — that under his leadership, Louisiana consistently has posted a lower unemployment rate than the nation as a whole. That gap is narrowing, however, now that Louisiana’s unemployment rate has risen to 6.8 percent.

Natural Gas Boom, But Fewer Government Jobs

Yu Hsing, an economics professor at Southeastern Louisiana University, said one factor is the loss of 3,700 federal, state and local government jobs since December.

Jindal regularly promotes the benefits of a smaller government, but this means fewer jobs, at least in the short term. Since December, state hospitals have been privatized, and the state’s colleges and universities have had less money to spend because of budget cuts mandated by Jindal and the Re­publican-controlled state Legisla­ture. At the same time, the federal government—pushed by Republi­cans in Congress—has cut billions of dollars in spending.

Another factor in the unemployment rate’s recent rise is that more people in Louisiana are trying to find jobs, said Jim Rich­ardson, an economics professor at Louisiana State Univ­ersity. “That’s good because they believe they can find a job,” he said. “That’s also bad because they haven’t found the jobs.” (The unemployment rate does not count people who stop seeking work, including those who are discouraged by a lack of opportunity.)

Louisiana’s jobs picture is benefiting from a national trend—low natural gas prices.

Sasol, a South African energy company, is building a mammoth facility near Lake Charles to convert natural gas to diesel and other liquid fuels. Moret said the company will invest $16 billion to $21 billion. In all, he said, private companies are investing at least $28 billion in Louisiana that will create 63,000 full-time jobs.

“What we’re trying to do is position the state to create as many jobs as possible,” Moret said. “If we can sustain a job growth faster than the South and the country, all sorts of good things will come from that.

“We’ll have more people moving in, we’ll have good growth in tax revenue without having to raise tax rates and less money will have to be invested for social welfare. Creating jobs is really the Holy Grail.”

This article originally published in the July 8, 2013 print edition of The Louisiana Weekly newspaper.