On the surface, Louisiana’s economy looks okay. But under the hood, the state’s latest jobs report shows people lost jobs, and there’s much room for improvement.  

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 the recent monthly jobs reports have shown slowing and now declining employment growth along with 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, too often created by the government. Those problems can and should 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 October 2023, for the latest data available. 

Table 1: Louisiana’s Labor Market Indicators

 December 2007February 2020April 2020October 2023
Labor force participation rate61.5%58.3%55.5%58.8%
Employment-population ratio59.0%55.5%48.0%56.9%
Unemployment rate4.0%4.7%13.5%3.3%
Total nonfarm employment1.94M1.99M1.71M1.97M
Private sector employment1.58M1.66M1.39M1.65M

The unemployment rate would be 5.0% if Louisianans hadn’t left the state since pre-COVID.

  • The unemployment rate is calculated using data from the household survey and isn’t a great measure of the labor market. This is because unemployment in the numerator and the labor force in the denominator are volatile measures as people enter and exit Louisiana and the labor force.
  • Considering data from pre-COVID, the working-age population is down by 36,738 to 3.5 million. The labor force is down 981 to 2.1 million since then, as many people have left the state, thereby holding the unemployment rate lower than otherwise.
  • If we include the departed population in the labor force and unemployment, the unemployment rate would be 5.0%, substantially higher than the reported 3.3%.
  • Moreover, if the working-age population hadn’t declined, the labor force participation rate would be 59.3% instead of the 58.9% rate today.
  • The labor market shows many signs of weaknesses.

Louisiana’s employment has declined in five straight months.

  • The payroll survey shows that nonfarm employment fell from 19,800 to 1.97 million since pre-COVID, one of only a few states with fewer people employed since then. The household survey shows that employment is up by 27,339 to 2.02 million since February 2020.
  • In October, nonfarm employment declined by 6,000 (3rd largest percentage decline by 0.3% of any state, as 26 states had declines or no growth last month). There have now been just 12,000 jobs added over the last five months. The household survey has reported job losses in the last five months for a total loss of 22,039 jobs across the state.
  • Louisianans have been struggling for many months.

Louisiana workers’ purchasing power continues to decline across most industries.

  • Nonfarm employment over the last year is up by 43,400 jobs (20th most in the country) for a 2.2% increase (10th fastest). Jobs in the private sector fell by 6,600 jobs last month to 1.6 million, and government employment increased by 600 jobs to 319,400. There is growing weakness in the labor market, with job losses and average weekly earnings not rising as fast as CPI inflation of 3.2% in many industries (Figure 1). The only industries that had greater purchasing power with their average weekly earnings growing faster than inflation over the last year were Construction and Manufacturing.

Figure 1. Louisiana’s Labor Market by Industry

Source: U.S. Bureau of Labor Statistics

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.

Table 2: Economic Growth Comparison Between U.S. and Louisiana

U.S. real GDP annual growth rate-2.8%+5.9%+2.1%-0.6%+3.2%+2.6%+2.0%
U.S. real private GDP growth-3.9%+7.2%+2.6%-0.5%+3.1%+2.3%+1.4%
Louisiana real GDP growth-7.9%+1.3%-1.8%-3.0%+2.5%+2.2%+1.4%
Louisiana private real GDP growth-8.9%+1.5%-1.6%-3.2%+2.8%+2.2%+1.3%


  • 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.

Figure 2: Real GDP Growth by State in Q1:2023

Source: U.S. Bureau of Economic Analysis

  • 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).

Notes. Dates in parentheses are for that year or the average of that period. Data shaded in red indicate “best,” and in blue indicate “worst” per category by state.

  • The Fraser Institute recently released its Economic Freedom of North America report for 2021 data showing that Louisiana’s score fell but remained in 20th Based on correspondence with Dean Stansel, the lead author of the report, the tax reform plan proposed by the Pelican Institute would move it up to 15th place overall in economic freedom.

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 must now be the political will to do it.