KANE: Louisiana’s Declining Labor Force Participation Rate

While unemployment rates are important, they do not tell the whole story about the state of the economy in Louisiana and across the nation. Today the Pelican Institute for Public Policy, in cooperation with The Liberty Foundation, offers new data focusing on the Labor Force Participation Rate (LFPR), with a special focus on gender and minority groups. The LFPR is the percentage of working-age persons who are employed or are unemployed but looking for a job.

With last Friday’s jobs report, the national LFPR hit a 37-year low. Louisiana’s overall LFPR stands at 59.5%, ranking 44th in the nation. Please see the following link for a one-pager with two charts showing the declining Labor Force Participation Rate in Louisiana, along with the supporting data.

Here are some key stats for Louisiana showing the workforce participation trends from 2008-2013:

  • All Men: a 3.3 point reduction;
  • All Women: a 3.0 point decrease;
  • All Whites: a loss of 2.3 points;
  • All Blacks or African-Americans: a 4.7 point drop; and
  • All Louisianans: down by 3.0 points.

A variety of factors contribute to the reduction in labor force participation, including demographic trends such as an aging population. But the declining participation rates reflect more than demographics, as many of these individuals are discouraged job seekers that have elected to drop out of the job market. We have also seen a rise in the disability rate in recent years, as a growing number of Americans in their prime working years are now receiving Social Security Disability Insurance (SSDI) benefits.

These facts highlight the importance of economic policies that spur job creation and do not unduly burden businesses. While there is no way to precisely measure the impact of every policy initiative, heavy-handed federal policy mandates like the Affordable Care Act may discourage businesses from hiring and increase the number of people dropping out of the job market.

With an election around the corner, Louisiana voters should consider which candidates are most likely to implement policies that spur economic growth and do not lead to more people exiting the workforce.

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