Layoffs rise, along with unemployment

The two Louisiana unemployment numbers came out on the same day, in unrelated data releases that couldn’t have been more aptly timed.

Civil service figures showed more than 3,800 state employees were laid off in the last budget year, more than the four prior years combined. Meanwhile, Louisiana’s unemployment rate rose to 7 percent, in the sixth straight month of growing joblessness in the state.

Gov. Bobby Jindal’s administration, whose outsourcing policies are responsible for most of the state worker layoffs, dismisses suggestions the two numbers are linked and says many of those employees found new jobs with the private companies that took over state services.

“Louisiana’s economy is continuing to thrive as we consistently outperform both the national and Southern economies. Suggesting otherwise can only be done by ignoring a slew of statistics and metrics that prove just how well we’re doing,” Jindal spokesman Sean Lansing said in an email.

But it seems difficult to believe that shrinking state employee rolls for five years in a row as the economy nationwide struggles hasn’t had some impact on unemployment figures – and an unemployment rate that is growing ever nearer to the national unemployment rate.

The national jobless rate was 7.6 percent for June, and the South’s rate was 7.2 percent, according to the federal Bureau of Labor Statistics.

Louisiana’s seasonally adjusted unemployment rate was 7 percent, up from 6.8 percent in May and up for the sixth month in a row, with 146,800 unemployed people in June.

And as Louisiana’s unemployment rate has gone up, the number of government employees in the state – workers on federal, state and local government payrolls – has steadily dropped. Loss of employment in the government sector is part of the data used to calculate the unemployment rate.

Greg Albrecht, chief economist for the Legislative Fiscal Office, said shrinking government payrolls contribute to the uptick in unemployment rates.

“It can’t be the only factor, but to say that they’re unrelated seems to be unrealistic, and mathematically it can’t be (unrelated),” he said. “I don’t think you can say the unemployment rate is not influenced by government employment layoffs.”

Jindal and his staff have regularly touted “reducing government’s footprint,” pointing to the elimination of about 26,000 fulltime jobs across state government since the Republican governor took office in 2008.

More than 6,000 of those job cuts have resulted in rank-and-file state employees getting pink slips, according to data from the Department of State Civil Service. That doesn’t count any “unclassified” employees, political appointees not overseen by civil service, who also were laid off.

Many of the layoffs were tied to Jindal’s aggressive push to hire private companies to run health care facilities that had been managed by the state, including facilities that care for the developmentally disabled and the LSU hospitals that care for the poor and uninsured.

The Jindal administration says the outsourcing cuts government costs and shifts the emphasis from a bloated government bureaucracy to the private sector.

Setting aside the philosophical debate, the policy of pushing privatization – at least for the short-term – also sends people to the unemployment lines. It also could help undermine Jindal’s continued touting of the state’s economic health and vitality if the state’s unemployment rate continues to edge up and overtakes the national rate.

The Jindal administration says the unemployment data contradicts other economic and labor market indicators.

Lansing cited increased rankings on certain business surveys, decreases in Medicaid and food stamp enrollment and improved per capita income statistics. He noted that private sector job gains have outpaced government job losses.

Economic Development Secretary Stephen Moret said he expects the unemployment rate to drop. He said Louisiana has thousands of jobs in the pipeline, with dozens of big-ticket projects announced and under construction across the state.

“What I see coming is just huge. It’s huge,” he said. “As I look at the next few years, I see tens of thousands of new jobs. I’m quite optimistic about the future.”