Could Expanding Unemployment Insurance Hurt Louisiana’s Recovery?
Last week saw the release of some of best economic news for the state of Louisiana in a long time.
According to the Department of Labor’s data for the week ending August 8, the number of Louisianans on unemployment insurance decreased by more than 53,000. This comes on the heels of a 27,000-person decrease during the previous week.
While it is important to note that the weekly initial unemployment claims increased to more than 13,000 this week and the previous week was revised up, this number remains far below the pandemic average.
Late last week, the Bureau of Labor Statistics released its state jobs report, which showed an increase in Louisiana employment by 18,800. The biggest job gains occurred in government, which had 7,400, while leisure and hospitality gained 4,700 jobs, and education and health services added 3,600. The gains in government and education are likely due to schools starting up again. The unemployment rate in Louisiana currently stands at 9.4 percent. Given that this data came from July, it’s likely the next state unemployment numbers will be much improved.
Given the timing of the large decrease in those on unemployment insurance, it’s difficult to believe the cause is anything other than the ending of Congress’ enhanced unemployment benefits. Because people often made more from these benefits than they did working, their incentive to return to work was minimal. Louisiana must take caution and avoid these issues, as it looks to disperse an extra $300 for those on unemployment insurance in the coming weeks.
Despite the most recent economic stats pointing in the right direction, we must remember that Louisiana still has a long way to go. Louisiana has the fifth highest insured unemployment rate at 15.9 percent, only trailing Nevada, Puerto Rico, Hawaii, and California. Louisiana leaders must continue working to pass policies that encourage the return of jobs and opportunity, such as reforming the state’s burdensome tax code and lifting regulatory hurdles for entrepreneurs.
Louisiana’s economic recovery is finally moving in the right direction, but we can’t afford to derail the progress we’ve made in recent weeks.