“Our state economy is growing, but those benefits are not accruing to workers.”
That’s the conclusion of the 3rd biennial report on “The State of Working Louisiana”, issued by the Louisiana Budget Project Thursday.
“The good news is the state has replaced all of the jobs lost during the Great Recession, plus added an additional 53,000 jobs – as of June 2017,” says LBP policy analyst and the report’s lead author Jeannie Donovan. “The bad news is business profits are consuming an increasing percentage of state economic output, and wages are not keeping pace with state productivity growth.”
The report is based on data compiled from the Bureau of Labor Statistics and the Current Population Survey. It shows 52% of the total state economic output is going toward business profits, rather than into raw materials, taxes, salaries or wages.
Co-author Nick Albares notes that the part that is going to pay workers is being distributed far from equitably, with the top ten percent of Louisiana wage-earners seeing a 19% increase in pay since 1979. During that same period, the state’s median income has only gone up six percent.
“That money is primarily going to those at the very top – not to those middle class families that our politicians time-and-time-again say that they care most about.”
Albares adds the report is a powerful argument for lawmakers to change the way they view economic development.
“We need a jobs agenda with workers at the center,” Albares states. “We spend far too much money on misguided economic development incentives, and should focus economic development strategies on producing more homegrown firms, since most jobs are created by startups and expansions of current in-state businesses, not through relocations of out-of-state firms.”