Louisiana continues to suffer disproportionately from Democrat Pres. Joe Biden economic policies eagerly ratified by a compliant Congress, recent employment data reveal.
Last week, national numbers for September disappointed again in terms of job creation, even as the country’s unemployment rate dropped deceptively, as exiting the labor force mainly drove the decline that set the lowest workforce participation numbers since 1977. That low number came from women disproportionately and in large relative terms leaving the labor force.
August data measuring other employment parameters confirmed this dismal picture. Job postings fell, led by hospitality, and the quit rate, or people leaving employment, rose to its highest level since 2000 and setting a record in raw numbers. While this can be a positive indicator when the labor market tightens since people have to quit a job to move on to a better one, it is negative in the current slack environment by showing people are exiting the workforce.
In short, job openings are falling because employers simply can’t find people willing to fill these. Extraordinarily, this runs counter to the trend this time of year when the labor market expands as children go back to school, allowing single parents, women mainly, the chance to trade child care responsibilities of the summer for work. The situation has become so bad, according to the chief executive office of one of the largest hospitality companies in the world that has had to pull back on some of its operations because it can’t entice enough workers, that government should start paying people to go back to work.
Because Democrat-run government continues to pay people not to work. By the time the September data came out, the country finally had shed itself everywhere of expanded unemployment benefits, which some employers blamed for reducing the labor market, if not driving up labor costs that have produced the highest rate of inflation in over a dozen years and caused the highest Social Security annual payout increase in 39 years.
Some have tried to discount the impact that the extra money not to work played in encouraging people to stay on the labor sidelines by claiming other factors such as the lingering effects of the Wuhan coronavirus pandemic had greater import in creating some hesitancy to work, but even they admit expanded benefits had some impact, and their effect may continue to the end of the year as savings from collecting the significant bonuses deplete.
But another Santa Claus benefit, perhaps not as generous for many but very significant, has come into play until next spring: expansion of and refundability of the child tax credit, half up front by monthly checks through the end of the year, the other half claimable on 2021 tax returns, generally from $3,000 to $3,600. With the checks starting in July, it explains why the labor market continues to shrink and mainly among women.
Of course, some have tried to argue against what employment data show and what models have accurately noted would happen. One forecast a loss of 296,000 full-time equivalent jobs and even a study by leftist scholars predicted a loss of 277 million work hours. Trying to counter these, others have argued that families wouldn’t substitute the largesse for work by trying to compare the apples of two similar Canadian programs to the oranges of the Biden policy, ignoring the significantly different payout and eligibility levels.
Still others, relying on surveys rather than actual economic data, acknowledge the negative impact on the labor market, but allege the anti-child poverty aspects of the expanded CTC more than offset that. But that indulges in the mistaken notion that transfer payments rather than pro-work policies represent the best anti-poverty strategy; an expanding economy form 2012-17 took a higher proportion of families out of poverty than would the higher CTC levels continued, according to estimates.
Worse for Louisiana, policies like a permanent expanded/refundable CTC will hit it harder because its economy depends more upon the likely beneficiaries of that policy. And due to a stubborn Democrat Gov. John Bel Edwards who in the aggregate has foisted tax increases, refused to right-size government, and resisted business-friendly policies (as well as botching the pandemic response), it already sits behind the eight ball with an economy with all (as of August) of a higher unemployment rate, lower workforce participation rate, and lower employment-to-population rate than the country as a whole, landing in the worst ten of states in all three.
The political left naturally will try to argue the policies it supports that have caused this problem (even as they deny culpability) need solving by more of its policies, such as trying to offset policies paying people not to work with policies paying people to work, all the while growing government and its power over people’s lives. Fortunately, just about all of the state’s national elected officials recognize the stupidity of this arrangement, and will have to wait for the nation as a whole to catch up utilizing elections starting about a year from now.