Personal income in Louisiana grew 4% in the first quarter, outpacing the national growth rate of 3.4% and all of our neighboring states. But not all of Louisiana’s industries saw a growth rate this quarter. President Donald Trump’s tariffs and trade wars are hurting Louisiana’s farmers and the transportation industry, which suffered a decline in earnings. The Advocate’s Kristen Mosbrucker has more:
Construction industry earnings in the state were hardest hit, as earnings from construction jobs declined by $284 million – which was a decline of half a percent. Farm earning dropped by $83 million, records show. Finance and insurance earnings fell by $57 million whereas information sector jobs – often in technology – dropped by $25 million. Transportation and warehousing declined by $2 million during first quarter.
While Louisiana’s farm and transportation slumps tracked national trends, other Louisiana industries bucked the trends in other states:
In some ways Louisiana tracked national trends by industry, such as the decline in farm in finance and insurance but also the jump in retail trade and oil and gas. The state bucked national trends for construction industry earnings growth and information sector jobs. The per capita income in the Baton Rouge metro area was $46,935 as of 2017, the most recent available data, up from $46,169 in 2016, records show. Similar trends held true in other metro areas, the per capita personal income for Lafayette was $44,585 in 2017, up from $43,887 in 2016. In the New Orleans metro area per capita personal income grew from $48,571 in 2016 to $49,013 in 2017.
“I’m in the 1 Percent. Please, Raise My Taxes”
While income inequality has been gathering headlines recently, a different problem – wealth inequality – holds back people from modest backgrounds, even when the income gap narrows. Just three men own as much as half of all Americans, and that eye-popping concentration of wealth leaves fewer resources for schools, health care, public safety and other services that benefit everyone in society. That’s why some of the 2020 Democratic presidential candidates have proposed various ways of taxing large fortunes to help close the gap. Philanthropist Eli Broad, writing in the New York Times, explains why people like him should pay more:
Two decades ago I turned full-time to philanthropy and threw myself into supporting public education, scientific and medical research, and visual and performing arts, believing it was my responsibility to give back some of what had so generously been given to me. But I’ve come to realize that no amount of philanthropic commitment will compensate for the deep inequities preventing most Americans — the factory workers and farmers, entrepreneurs and electricians, teachers, nurses and small-business owners — from the basic prosperity we call the American dream. Some of us have supported closing the gulf between rich and poor by raising the minimum wage to $15 an hour, reforming our education system, expanding access to medical care, building more affordable housing. But even in cities like my adopted hometown, Los Angeles, where many of these policies have been enacted, they have not adequately addressed the crisis. Our country must do something bigger and more radical, starting with the most unfair area of federal policy: our tax code.
Black poverty is rooted in the housing market
Homeownership is central to the American dream. But for many black families in Chicago who bought homes in the 1950s and 60s, this dream turned into a nightmarish poverty trap. A new study by Duke University examines the damaging toll of predatory housing contracts, which were marketed to black families who were excluded from traditional housing market.
These contracts offered black buyers the illusion of a mortgage without the protections of a mortgage. Buyers scraped together excessive down payments and made monthly installments at high interest rates toward inflated purchase prices, but never gained ownership – if at all – until the contract was paid in full and all conditions met. (Immergluck, 2018; Way, 2010) In the interim, contract sellers reaped all the benefits of holding the deed; they were free to evict the buyers for even minor missed payments as well as to burden the title with liens unrelated to the buyer’s possession. (Immergluck, 2018)
Eliminating the barriers black families face in obtaining housing is key to reducing the persistent racial disparities in education, employment, and net worth. Mark Whitehouse, editorial columnist for Bloomberg Opinion, has more:
Black families were overcharged somewhere between $3.2 billion and $4 billion (in 2019 dollars). The real estate agents and investors who profited were almost exclusively white, so this represents a direct transfer of wealth from one race to another. Worse, the contracts’ exorbitant terms, along with the lack of equity to borrow against, left black families without the means to invest in their properties, contributing to the physical decline of their neighborhoods. The predation didn’t end in the 1960s. It evolved. There was the FHA scandal of the 1970s, in which indiscriminate federal lending and outright corruption enabled speculators to sell inner-city homes to blacks at inflated prices, resulting in widespread foreclosures. There was the subprime boom of the 2000s, in which blacks were steered into inappropriately expensive loans that enriched a whole ecosystem of mortgage-industry professionals, but often left borrowers with nothing but an eviction notice and a bad credit history. In the wake of the subprime bust, investors including private-equity firms have again targeted the same neighborhoods, buying up houses on the cheap and renting them back to black and other minority tenants — sometimes under contracts very similar to those of the 1960s. The investors involved don’t necessarily act with racist intent. They exploit blacks because that’s where the opportunity is.
Pell Grants for prisoners?
Pell Grants have made college more affordable to millions of Americans. While the program has a broad reach, it does not extend to people who are pursuing degrees behind prison walls. There is now bipartisan momentum to change that. Fred Patrick of the Vera Institute of Justice explains:
Postsecondary education in prison cuts costs, which provides opportunities to reinvest in communities. “Safer communities” is another way of saying less crime and less taxpayer dollars spent on prisons. According to the findings of Vera’s 2015 “Price of Prisons” report, states spend upward of $45 billion a year incarcerating people, but continue to see little return on that investment. Expanding access to postsecondary education in prison, on the other hand, has a solid track record of cutting costs. A recent report we co-authored with the Georgetown Center on Poverty and Inequality found reduced recidivism rates would save states a combined $365.8 million in decreased prison costs per year. At a time when an increasing number of states are implementing sentencing reforms that are leading to more and more people who were serving extended or life sentences being released, expanding access to postsecondary education in prison by reinstating Pell grants without eligibility restrictions is also a forward-thinking move that would remove barriers that could undermine sentencing reform.
Number of the Day
$853 – The average weekly pay for Louisiana’s private-sector employees in May 2019. This is a 0.5% increase from May 2018 to May 2019. (Source: Urban Institute)