Our new report highlights Louisiana’s economic situation based on the most recent data. The report is based on several key factors that indicate how the economy, labor market, and public policy influence the lives of everyday Louisianans. While some of these data indicate a relatively strong labor market–such as the historically low unemployment rate–there are underlying factors showing Louisiana’s economic struggle.

Our Louisiana Comeback will happen through reforms that remove government barriers, bring jobs and opportunity back to Louisiana, and let people prosper. We must decide: Will we continue to hold on to the status quo (which hasn’t done us any favors), or will we embrace the significant reforms necessary to bring jobs and opportunity to Louisiana? We need the latter.

Read the full two-pager: Economic Report Oct 2023 

Originally published by Pelican Institute.​

​At first glance, you might think that Louisiana’s economy is doing great. After all, the state’s September 2023 jobs report shows record lows for the unemployment rate at 3.3% and and people unemployed at 67,930.
 
Louisiana Governor John Bel Edwards cheered these data in a press release:
 
“Louisiana continues to set records for low unemployment. We’ve had 30 consecutive months of job growth and have added nearly 280,000 jobs since the worst of the pandemic. In fact, our employment levels are now higher than they were before COVID. Experts believe that our bipartisan work to grow and diversify our economy will benefit Louisiana for years to come. Economist Dr. Loren Scott recently predicted that Louisiana will add more than 80,000 jobs over the next two years. And we’ve done it all while overcoming historic natural disasters and a state government budget crisis. I have never been more optimistic about Louisiana than I am today.”
 
But does what you hear in the media or by some politicians match reality? Let’s dive into the data to see how things are going for Louisianans.
 
We should know that the Pelican State has many fantastic resources but too many failed public policies that keep Louisianans from reaching their full potential. This has been the case for a while, but most recently, the jobs reports indicate slowing employment growth and a declining labor force. Work matters, as it brings about dignity and self-sufficiency and leaves fewer people needing help from government safety net programs. These data below show that while the labor market data can look good on the surface, there are many real problems facing Louisianans that need to be addressed by state leaders. Fortunately, the Pelican Institute’s “Comeback Agenda,” including our fiscal reform plan, supports ways to overcome these challenges.
 
Here are key issues in Louisiana’s economy.
 
Table 1 provides Louisiana’s labor market data for important dates from the U.S. Bureau of Labor Statistics. These dates are December 2007, when the Great Recession started; February 2020, when the last expansion peaked before the COVID-19-related shutdowns; April 2020, when the shutdown recession ended; and September 2023, for the latest data available.

​Another weakness is economic growth.
 
Table 2 shows how the U.S. and Louisiana economies performed since 2020, as reported by the U.S. Bureau of Economic Analysis. 

​The steep declines were during the shutdowns in 2020 in response to the COVID-19 pandemic, which was when the labor market suffered most. Figure 2 shows how the increase in real GDP in Louisiana of +1.4% in Q1:2023 ranked 31st in the country to $289.9 billion, after an annual decline in economic output by -1.8% in 2022 which was the second worst in the country.

The BEA also reported that personal income in Louisiana grew at an annualized pace of +6.2% (ranked 27th) to $258.5 billion in Q1:2023 (above +5.1% U.S. average). There was personal income growth of 0.0% in 2022, ranking 50th of the states.
 
Compared with neighboring states based on several measures there continue to be major concerns in Louisiana (see Table 3). 

​Bottom Line: Louisiana’s economy is weak when it comes to the labor market and economic growth and when compared with other states. Bold, transformational reforms can unleash the potential of Louisianans and make the state more competitive.

• There was an irresponsible budget passed in 2023 that excessively grew spending, busted spending caps in FY23 and FY 24, and didn’t provide tax relief even with billions in excess tax revenue.
• Given these results, there will not be improvements in the state’s poor business tax climate, net outmigration of Louisianans, or Louisiana having one of the highest poverty rates in the country—unless pro-growth reforms are enacted soon.
• The Pelican Institute’s “Comeback Agenda” that encourages spending restraint, tax reform, regulatory relief, education freedom, a revamp of workforce and social safety net programs, and more, would provide opportunities to enable people to prosper.
• This is not only what Louisiana needs; it’s what Louisianans want, according to a recent poll.

Originally published at Pelican Institute. 

​The headlines are filled with positive economic news for Louisiana, boasting record-low unemployment rates and impressive job growth. But digging deeper into the data reveals a more nuanced and challenging economic landscape that deserves attention and fast action.
 
At first glance, Louisiana's unemployment rate appears to be a shining success at just 3.3%. Governor John Bel Edwards has been vocal about the state's accomplishments, boasting a record low unemployment rate, "30 consecutive months of job growth," and the addition of nearly 280,000 jobs since the pandemic's peak.
 
But the unemployment rate only tells part of the story.
 
Looking at the data from before the COVID-19 pandemic, there are 36,329 fewer people of working age in Louisiana, totaling 3.5 million. Even though the number of people actively looking for work has increased by 1,566, many have left the state for better opportunities.
 
This is why the unemployment rate seems lower than it is.
 
Had those 36,329 people stayed in Louisiana to be part of the workforce and unemployment numbers, the real unemployment rate would be 4.9%, which is 48% higher than 3.3%. This statistic challenges the narrative and reveals underlying workforce participation and retention challenges.
 
Considering jobs added over the last 30 months, the Pelican State has had seven months of declining net jobs in the payroll survey and nine months with declines in the household survey. The latter measure has declined for four straight months resulting in 17,564 fewer people employed in that period, pointing to a turbulent job landscape.
 
At the same time, Louisiana’s gross domestic product (GDP) has seen concerning ups and downs.
 
In 2022, the state's real GDP shrank by 1.8%, making it one of the poorest performers in the nation. The most recent data indicate a modest 1.4% growth in the first quarter of 2023, ranking 31st in the country. These figures reveal economic instability and emphasize the need for a comprehensive approach to sustainable growth.
 
Finally, assessing personal income figures for state residents reveals additional economic weakness.
 
The first quarter of 2023 showed more promising trends for state residents’ personal income, with personal income growing at an annualized rate of 6.2%, ranking 27th nationwide. However, that has yet to make up for 2022, when personal income did not grow at all, making Louisiana’s personal income last among the 50 states that year.
 
The results are in: Louisiana’s economy is lacking, and transformative reforms are vital to unlock the Pelican State’s potential. If Louisiana continues on its current path, it risks maintaining a poor business tax climate, facing ongoing outmigration of residents, and perpetuating one of the highest poverty rates in the country.
 
Implementing better spending restraint, substantial tax reform, significant regulatory relief, universal education freedom, enhanced workforce development, and improved safety net programs are practical solutions that would empower Louisianans.
 
Fortunately, a recent poll underscores that these essential reforms are not only needed but also desired by Louisiana's residents. The Pelican State has the potential to become "the next big thing," a place where people want to move, provided its leaders take fast action to secure a brighter and more prosperous future for all. This is possible given a new governor and many state lawmakers next year.

Originally published at The Center Square.