Academics recommend promoting human capital through increased economic freedom

NEW ORLEANS, La. – In a blatant stab at Louisiana labor, a new report released by Ball State University gives Louisiana an “F” for human capital – a measure of the labor force’s education and skills – for a third year in a row. Other grades included a “D” in venture capital and a “C” in both manufacturing and tax climates.

Ball State’s Center for Business and Economic Research released the 2011 Manufacturing and Logistics Report Card. Indiana had the highest marks, receiving an “A” in manufacturing, logistics, global reach, and tax climate. Hawaii had by far the lowest marks, receiving an “F” in manufacturing, logistics, and global reach, and a “C-” in productivity, diversification, and venture capital.

Among other things, CBER’s director Michael Hicks claims that only some parts of the U.S. are rebounding from the recession, as others lag behind.

“Some states, such as Indiana, have seen a real turnaround in manufacturing employment since the end of the recession [up 4.6 percent], while the nation as a whole has seen one in 50 manufacturing jobs lost,” Hicks said.

Dr. Walter Block, economics professor at Loyola University, contends that, “the best way to promote human capital, or any other causal agent for economic development, is not to directly promote human capital through subsidies for schooling, education or training, but, rather, to indirectly promote it, via increasing economic freedom: less taxes, less government, fewer regulations, etc.”

Hicks agrees, stating that prior to the recession, business location and expansion decisions were mainly driven by the availability of skilled workers, but now that is a short term consideration.

“Tax rates and concern about future tax increases due to high pension costs and other factors dominate business decisions to relocate. So, states that emerge from this recession with a solid fiscal climate will tend to outperform those with uncertain balance sheets.”

Robert Ross is a researcher and social media strategist with the Pelican Institute for Public Policy. He can be contacted at, and you can follow him on twitter.