Louisiana’s Economy Can’t Survive Any More Of JBE’s Punishment

In a rare moment of journalism over the weekend, the Baton Rouge Advocate managed to let out a bit of truth about the disaster that is Louisiana’s economy under John Bel Edwards’ leadership.

Except you had to read between the lines to actually find what’s obvious.

Which is that Louisiana’s economy was mostly dead before COVID-19 came along and is basically completely dead now.

Gary Wagner, Acadiana business economist with the University of Louisiana at Lafayette’s Moody College of Business, was more optimistic about the economic recovery last year than today, because there are several indicators that suggest a slowing business climate.

“Between first and second quarter, the economy grew,” he said. “But firms are figuring out ways to produce more with fewer people; it’s likely going to be a permanent change.”

The biggest metric was that between first and second quarter, Louisiana’s unemployment rate improved from 7.5% to 7.1%. During a more typical year, that means workers are getting back into the labor force.

But this year, something else happened: 58,000 workers dropped out of the labor market entirely, not seeking jobs anymore. More than 20,000 of those workers leaving the job market were in New Orleans. And that trend accounted for the entire improvement of the unemployment rate.

“On the surface, people would look at the and think that’s a good sign,” Wagner said. “The entire reduction in the unemployment rate was that people quit looking for work; that’s not a good sign.”

By the end of the year, the unemployment rate is projected to fall to 6.6% but is likely going to fall more aligned with how it does in a typical year.

And a bit more…

The U.S. economy is forecasted to grow by nearly 5% on average in the next 12 months. Gross domestic product in 15 states surpassed prepandemic levels but not yet in Louisiana. The state GDP expanded at an annualized rate of 4.7% during first quarter this year and is expected to grow at 4.8% in second quarter and 3.2% in third quarter. It is expected to recover to pre-pandemic levels by the end of 2022.

Louisiana ranks No. 45 in the job recovery nationwide.

The state regained 39% of the 285,000 jobs lost during the pandemic in 2020. Louisiana’s more sluggish recovery is now expected to add 29,000 jobs in the next 12 months, instead of 71,000 jobs.

Meanwhile, five states have already added back all of its job losses in 2020.

A quarterly research report conducted by UL ran economic forecasting models through an optimistic, pessimistic and likely baseline scenario for third-quarter economic activity in the state.

Even an optimistic job recovery forecast the state would not recover by July 2022, but more like July 2024.

Meaning that based on the current realistic forecast, without something major changing in this state, Louisiana’s private-sector economy, measured in terms of employment, would have hit its all-time best during the Jindal administration.

What isn’t in that Advocate piece is a true discussion of why Louisiana’s unemployment rate is dropping. It isn’t that people have stopped looking for work. It’s that they aren’t here anymore.

We keep harping on the UHaul rates as a real-time measure of net outmigration, and the fact that it’s essentially twice as expensive to rent a UHaul truck in Louisiana to drive it somewhere out of state than it is to rent elsewhere and drive here. That holds up again and again every time we check the rates on UHaul’s website.

We know that some 100,000 people were lost to net outmigration during John Bel Edwards’ first term as governor. We know that after the first quarter of the year Louisiana’s electorate shrunk by more than 10,000 people; LSU’s journalism school put out a pathetic article it shopped to media organs around the state attempting to spin that data as a negative effect of Donald Trump on Louisiana Republican voter registration, when there was actually a greater subtraction from Democrat voter rolls than from that of the GOP.

Why would you have a shrinking of the voter rolls? Because people moved away and registered to vote somewhere else.

By the way, and this has gone totally unreported on, the electorate has shrunk a whole lot more since then. On April 1 of this year there were 3,093,045 registered voters in Louisiana. On September 1 of this year that number had fallen off to 3,031,040 – a loss of 62,365 registered voters.

A good chunk of that would have come from a purge of the voter rolls after the congressional special elections in the spring, and people who died or were incarcerated would have come off it. But in a typical year Louisiana has 54,000 or so deaths – and this drop is over only five months. And what should offset deaths on the voter rolls is kids turning 18 and registering to vote.

Meaning that outmigration is what explains that huge drop in the number of registered voters in the state. Since the first of the year there are 73,502 less people on the voter rolls in this state.

But the Advocate doesn’t even talk about that. They aren’t even discussing, in an article about how Louisiana’s jobs recovery is one of the six worst in the whole country (after its job losses were one of the worst; if your economy takes one of the deepest dives it should mean it ought to make one of the strongest comebacks), the fact that we’ve lost the people we need to bring our economy back.

Louisiana’s economy has been kneecapped. Maybe having a state income tax, unlike Florida, Texas, Tennessee, and soon, Mississippi, while also imposing one of the highest sales tax rates in America has something to do with that? Maybe having the most onerous regulatory regime in the South plays a part? Maybe placing zero emphasis on economic development while all your neighbors are busy kicking our asses contributes to the problem? Maybe focusing your educational system on wokeness instead of real job skills matters? And maybe locking the state down with COVID restrictions while our neighbors are opening up makes a difference.

You can blame this on hurricanes, if you want, but the problem with that is hurricane recovery – even when it’s only fueled by insurance payouts, not counting FEMA dollars and other government aid – creates tons of temporary jobs rebuilding things which get broken in the storm. Then those things are fixed, and your economy should return to its pre-storm function.

The only reason that wouldn’t happen is if your people leave.

Of course, the New Orleans area has utterly lost its tourist economy. That was killed by the awful government response to COVID-19 and some other things. But unless you’re some Caribbean island unsuitable for much of anything else, tourism should be a very small part of your economy. Tourism produces lots of low-wage jobs people will have trouble getting ahead in, and worse, those jobs don’t really prepare people for better-paying work.

Meanwhile, Texas and Florida are exploding. They’ve taken the COVID punch and shrugged it off. Alabama, Mississippi, Tennessee and Georgia have similarly rebounded and are growing.

Louisiana isn’t growing. Louisiana is bleeding. We took one of the worst economic dives in America when COVID hit, and we’ve had one of the worst recoveries.

And this might be the only place you’ll see even a hint of responsibility placed on the political leader of the state for that performance. When is John Bel Edwards going to be held to account for what he’s done to us?

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