Damage of Louisiana’s Shutdown Becoming Clearer
As the Louisiana legislature debates adding checks and balances to the state’s emergency powers, reports from both the Bureau of Labor Statistics (BLS) and Bureau of Economic Analysis (BEA) are painting a picture of just how economically damaging the state’s shutdown has been.
Let’s start with the worst news. The BEA reported Louisiana’s economy shrank by 31.4 percent on an annualized basis in the second quarter (April-June) of 2020. Coincidently, this was also the average rate of decline seen across the United States during the same time period.
Upon closer examination of the reasons for the economic decline, it’s clear why Louisiana is suffering such negative effects from the shutdown. The largest sector decline occurred in accommodation and food services, which decreased by a whopping 88.4 percent. This is unsurprising when you consider that Louisiana is more dependent on this sector of the economy than most other states. Healthcare and social assistance followed food services with a 48.1 percent dip, while durable goods manufacturing fell 43.3 percent.
Thankfully, it appears the worst may be behind us as both Louisiana and the rest of the nation have continued gradually opening back up. But while many were hoping for a “V” shaped economic recovery, the latest job report throws some cold water on that theory.
Only 661,000 jobs were added in September, less than half the number of jobs that were added the previous month. While May and June experienced initial job gains of 2.7 million and 4.7 million respectively, it appears that getting the remaining Americans back to work will be a tougher task. There are more than 10 million fewer Americans that have a job now compared to January of this year, and more than 7.2 million people want a job but aren’t actively looking for one.
As the Louisiana legislature goes into a short recess to deal with Hurricane Delta, they would do well to remember that many economic challenges still lie ahead for Louisiana. That’s why they should be looking to solutions to remove as many barriers to getting citizens to work as possible. We need better access to jobs and opportunity more than ever before in our state’s history, and we must tackle this issue with the same seriousness and urgency as the ongoing health crisis.
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