Now at 4.6 percent — its lowest since March 2008 — the unemployment rate in Louisiana continued to drop for the eighth consecutive month in December. Louisiana has seen a net gain of 5,500 new jobs over the past 12 months. Economic Policy Institute explains why unemployment figures and job growth are critical bellwethers for the economy:
When more workers are unemployed, it also depresses wage growth for those workers who have a job, since employers have little need to raise pay to attract or retain staff. Although the country remains on a positive trend of job growth and falling unemployment, many states still have rates of job growth that are leaving many unable to find work and paychecks failing behind.
Gov. John Bel Edwards highlights similar points in his statement:
Louisiana’s economy continues to improve, and we are making tremendous progress in putting our people back to work. We are also seeing signs of wage growth in a number of sectors of employment. These unemployment figures are evidence that we are headed in the right direction, but I know we still have a lot of work left to do.
The Advocate’s Tyler Bridges throws some cold water on things by pointing out that the total number of people working in Louisiana is only slightly higher than two years ago, which suggests a lot of the “gain” is the result of people retiring or leaving the state. And economists point out that governors have very little to do with short-term changes in the unemployment rate.
But the real story is how little impact governors have on the state’s overall economy, said Greg Albrecht, the Legislature’s top economist, echoing Richardson. “We have to balance our budgets, so we can’t create more of the economy through deficit financing,” he said. “We can’t affect trade flows through tariffs. States in general don’t have the tools to do macroeconomic policy. “If you build up a super-strong education system, you’ll have an impact on your economy long term, or a strong road system. But it won’t show up next year. That’s not what states can do.”
What price Amazon?
The New Orleans area was never considered a serious contender in the quest to land Amazon’s new, 50,000-employee headquarters – a fact that was confirmed last week when it was omitted from the list of 20 finalists announced by the online mega-retailer. But that didn’t stop state officials from trying. The Advocate’s Richard Thompson reports that Louisiana Economic Development dangled $6.6 billion in incentives – and five potential sites – in an attempt to lure the company to the Pelican State.
Out of the potential $6.56 billion package, an estimated $5 billion was to be allocated through the state’s Digital Interactive Media and Software Development Incentive. The program offers a 25 percent refundable tax credit on payroll of Louisiana residents developing an interactive software product. Another $600 million was allocated through the Quality Jobs Program, which provides a cash rebate of up to 6 percent of a company’s annual payroll for as long as a decade for new positions that pay at least $18 per hour. The state’s Competitive Projects Payroll Incentive Program, which offers an 11 percent payroll rebate for qualifying new jobs over a decade, was also included, valued at about $500 million. The proposal further included $400 million for LED FastStart workforce training program and a $60 million performance-based grant to pay for building and training facility costs.
Meanwhile, drug prices soar
In 2000, the average cost of cancer drugs was less than $10,000. Fast forward to today, and patients can easily expect to pay upwards of $150,000. Pharmaceutical companies blame the cost of developing new treatments, but academic researchers refute those claims. Dr. Behrouz Zand, an oncology professor at MD Anderson and contributing writer at the Houston Chronicle, exposes a complicated system of federal laws which allow Big Pharma to flood the market with increasingly expensive drugs and shares what can be done to make cancer treatment more accessible:
In 2003, Congress and President George W. Bush signed off on the Medicare Reform Act, which prevented Medicare from negotiating drug prices with pharmaceutical companies. Meanwhile, European countries allow their governments to negotiate with pharmaceutical companies and obtain drugs at 20 percent to 50 percent of U.S. prices. According to the CBO, if the government were allowed to negotiate drug prices with Medicare, it would save $145 billion in the next 10 years. U.S. law also forbids the import of drugs from other countries. This gives pharmaceutical companies a monopoly. They figure, “Where else are patients going to get it from?”
The ‘doomsday’ budget and public safety
Most of the focus on Gov. John Bel Edwards’ executive budget has been on the cuts to health care and higher education. And rightly so, as those are the two areas that would be hardest hit if legislators refuse to replace or renew expiring taxes before June 30. But other important priorities are also slated for big cuts. Nola.com/The Times-Picayune’s Julia O’Donoghue looks at the impact on sheriffs and district attorneys.
If Edwards’ current budget plan was implemented, sheriffs who house Louisiana state prisoners in local jails would see their reimbursement rate dropped from about $24 per inmate per day to $19 per inmate per day. The same rate reduction would occur for sheriffs who run transitional work programs for state inmates. Both of these cuts would amount to a $34 million reduction in funding for local sheriffs in the budget cycle that starts July 1. The Louisiana Sheriffs Association had not returned a phone call from a reporter about the budget cut Tuesday. Department of Public Safety and Corrections Secretary Jimmy LeBlanc said most sheriffs probably wouldn’t be able to house state inmates in their jails if they ended up being paid just $19 per day. “I don’t see how they can,” LeBlanc said in an interview Tuesday. “They can’t make it on $24 per day.”
Number of the Day
5,500 – The net number of new jobs added to the market over the past 12 months in Louisiana. (Source: Economic Policy Institute)