Louisiana adds jobs in August, many in low-wage industries

Louisiana’s jobs picture continued to improve in August.

The state added 14,000 nonfarm jobs in August – the 10th time in the last year jobs have increased. Nonfarm employment is currently at an all-time high of 1.952 million.

That’s certainly good news. But before any champagne corks get popped, it’s worth looking inside the numbers to see what types of jobs are being created. And here the picture gets a bit more muddled.

More than half of the jobs created last month in Louisiana were in leisure, hospitality, education and health services – economic sectors that have some of the lowest average wages. High-paying industries like manufacturing also saw gains, but at a fraction of the fastest-growing sectors.

Despite the modest gains of the past month, incomes for typical Louisiana households remain the eight lowest in the nation. Nearly 33 percent of households in Louisiana earn less than $35,000 annually, compared to 26 percent nationally. And a big reason for these comparatively low wages is the fact that a majority of Louisiana’s new jobs are in low paying industries.

Most new jobs are in low-wage sectors

While state government added 900 jobs in August, government employment continues to be a drag on Louisiana’s economic recovery from the Great Recession. And the private sector has still not created enough jobs to keep pace with population growth. The combination of these factors has left a jobs deficit, creating a job market where many adults have stopped searching for work altogether due to a lack of work opportunities.

Job growth lags behind increase in population

Reversing this trend won’t be easy, and there are no overnight solutions. But there are several actions that policymakers can take to create more high-paying jobs in Louisiana while improving the lives of low-income workers.

The first step is to adequately fund Louisiana’s K-12 schools and public colleges and universities – the true building blocks of a 21st century economy. The next step is to boost the value of the state Earned Income Tax Credit, which keeps thousands of low-income families above the poverty line. Third, legislators should take advantage of the opportunity to expand health coverage to an estimated 400,000 low-income Louisianans as part of the new federal health reform law. This would not only make people healthier, but it would create jobs across the state through an infusion of federal funds.

Other potential steps include raising the minimum wage and curbing the growth of tax loopholes, which is draining the state’s ability to pay for basic needs in education, infrastructure and public safety.

All of these solutions require political courage to implement. But it starts with an acknowledgement that the current jobs picture – as rosy as it looks on the outside – has plenty of room for improvement.

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