Friday, February 23, 2024

Hurricane Ida reverses downward trend for Louisiana unemployment claims

by BIZ Magazine

By William Patrick | The Center Square

Weekly unemployment claims have skyrocketed in Louisiana since Hurricane Ida pounded the southeast region of the state, but they were at their lowest point this year before Ida.

The Louisiana Workforce Commission reported 1,712 new unemployment claims were filed for the week ending Aug. 28, the last reporting date in August and the day before Ida made landfall. The date also marked one month since Gov. John Bel Edwards ended the state’s participation in the federal unemployment benefits program related to COVID-19.

In the week following Ida, new claims jumped to 9,724; a 468% increase. The data is the most recent available and does not include claims occurring after Sept. 4.

The largest unemployment category increases occurred in accommodation and food services, health care and social assistance and retail trade.

Edwards was the first Democratic governor to opt-out of federal pandemic unemployment assistance, though he successfully negotiated a permanent increase to the state’s weekly unemployment benefit amount with the Republican-controlled Legislature during the 2021 legislative session. The agreement was solidified when Edwards signed House Bill 183.

More recently, Edwards reduced eligibility criteria to allow for unemployment “disaster-related claims,” which Edwards espoused during a Wednesday public radio interview. The changes were made through an executive order that applies statewide.

“We encourage anybody who’s out there who has a problem with employment related to the storm to apply,” he said.

Critics have speculated long-term unemployment insurance, along with direct stimulus payments and expanded benefit programs such as the child tax credit expansion, have contributed to unemployment rather than simply sustain income from job losses.

Numerous studies, however, have reached varying conclusions. Some show negligible employment gains since 26 states, including Louisiana, ended federal unemployment aid before the program’s Sept. 6 expiration. Others show significant results.

A widely-cited August paper by economists and researchers from Columbia and Harvard universities showed only a slight uptick in job growth, which confirmed findings from other studies.

A September analysis by the free market Mercatus Center at George Mason University cited 13 studies examining the effects of increased unemployment benefits since March 2020. All 13 showed increased benefits were connected to longer periods of unemployment, the analysis said.

The reason, it explained, is that free government benefits have rivaled income amounts that may be earned from a job. Put another way, “unconditional monetary grants to unemployed workers tend to raise their reservation wage – the compensation level necessary for the worker to take a job.”

While many workers and displaced Louisianans are in legitimate need of unemployment assistance, taxpayer accountability represents another side of the issue.

Attorney General Jeff Landry said the state has paid more than $400 million in pandemic unemployment benefits to individuals who did not qualify, including $6.2 million to prison inmates and $1 million to dead people.

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