What a Life for June 27, 2007
June 26, 2007Ellis Lottinger, Jr.
June 28, 2007
The labor shortage in south Louisiana is severe, and it may become worse, but the Houma-Thibodaux area continues to have one of the strongest local economies in the state, Louisiana Secretary of Labor John Warner Smith said at the Thibodaux Chamber of Commerce Second Quarter Luncheon held Thursday at Johnny Jambalaya’s Bayou Bistreaux in Thibodaux.
In his talk, Smith touted the Incumbent Worker Training Program, which is the state Department of Labor program that pays for small businesses and industries in Louisiana to train existing workers to improve employee performance.
The program has trained 166,535 workers in Louisiana since its inception in 1998.
The secretary said the state Department of Labor expects 20 percent growth in the Houma-Thibodaux area through 2014. Lafourche and Lafayette Parishes had the lowest unemployment rates in Louisiana in April at 2.4 percent. Terrebonne Parish’s unemployment rate for April was 2.6 percent.
Smith sounded a dire note about the number of workers available in Louisiana to fill jobs.
“If you think the labor supply is tight today, it will get tighter,” at least through the next five years, he said. “Demographics is an issue. There’s a low growth of population.”
Workers are not returning to Louisiana, and the state is facing critical housing and day care shortages, he said.
“The problem is rooted locally in every community in Louisiana,” Smith said. “We have a human capital problem. We’re not being productive in the labor force.”
“We can ill-afford to allow any worker to be lost,” he said. “Everybody knows we’re losing high school graduates.”
Smith said that the key to improvement rests with the government taking action, and directing educational efforts toward workforce training.
Citing a lack of construction workers in the state, he favors emphasizing practical work training from the lower grades through high school.
“We need to look at getting young people into craft services earlier,” he said. “For career and technical services in K-12, we’re not enrolling enough students in these new programs. Education must be aligned with the workforce.”
Smith said that Louisiana suffered from a tight labor market before hurricanes Katrina and Rita. The storms only exacerbated the problem.
The jobs with the greatest demand following the hurricanes were low paying. He pointed out the help wanted signs that sprang up, and the bonuses McDonald’s and Burger King were offering.
Jobs that paid $5 an hour pre-Katrina are paying $10 to $15 an hour now.
“We have to be open to legal immigrant workers,” he said.
Smith called Louisiana’s Incumbent Worker Training Program (IWTP) one of the largest in the nation.
Gov. Blanco signed a law, effective July 1, setting aside 10 percent of the IWTP for pre-employment training, and lowering the amount the program can assess employers in Louisiana through the unemployment insurance tax.
Businesses in Louisiana fund the IWTP through unemployment insurance taxes they pay to the state.
The new pre-employment training portion of the IWTP stretches the scope of the program. The IWTP was begun to train only existing employees of a company.
“The bill will allow us to train workers before they’re hired,” Smith said. “This is only for expanding Louisiana businesses, not businesses coming into the state.”
Though small companies fund the IWTP through the unemployment insurance tax, Louisiana businesses are not fully taking advantage of the program, Smith said.
“Help us get the word out about the IWTP,” he said. “This is an opportunity to take advantage of the employees you have. We need to reach more small businesses. (They) pay the bulk of the taxes we collect. There is funding available. The bottom line is strong. (Businesses) are paying for it, they’re just not using it. “
The IWTP has a fund balance of $17 million. The program has spent $168,527,028 on worker training in Louisiana since its inception.
Smith described the IWTP as being “created to provide customized training for small businesses.”
To use the IWTP, a business must obtain for its workers a training provider. The employer and the provider then submit a training plan to the Louisiana Department of Labor for approval. The training supplier is reimbursed by the state.
The new law taking effect July 1 reduces the IWTP’s total yearly tax-assessing capacity from $50 million to $35 million. The program spent over $40 million in 2005, the highest for one year since the IWTP began.
The program’s taxing capacity is tied to the health of the state’s Unemployment Insurance Trust Fund. If the fund falls below $1.25 billion, the IWTP’s ability to tax employers ends.
