Louisiana Voice

Add another negative to the list for Louisiana.

While Gov. Piyush Jindal trots all over the country telling everyone who will listen about the state’s robust economy, the low unemployment rate and the incredibly favorable business climate, a national study has revealed that Louisiana has the third widest gap between rich and poor, roughly equivalent to some Third World countries.

The report, by 24/7 Wall Street, employs the widely accepted Gini coefficient which measures income inequality to arrive at its results. The Gini coefficient is a number between zero and one with zero representing perfect income equality and a place with a score of one would have only extremely wealthy and extremely poor people, with no middle class.

The state Gini coefficients range from .419 in Utah to .499 in New York, indicating that all 50 states have relatively high income inequality compared to the rest of the world.

The most alarming aspect of the latest results is the trend toward a widening gap, the report indicates. In 1967, the Gini coefficient for the U.S. was .397. Today, it is .469, evidence that America’s income divide has become greater.

The widening gap between rich and poor has been a growing issue between Republicans and Democrats on both the national and state levels.

Many of Jindal’s proposed programs, critics say, would do much toward widening that breach even further. The privatization of state agencies would result in layoffs of state employees and Jindal’s proposed retirement reforms would have sharply reduced state pensions. Cuts to higher education have resulted in further layoffs.

New York, with a Gini coefficient of .499, had the largest disparity between rich and poor despite having the sixth highest (7.4 percent) percentage of households earning $200,000 or more per year. At the same time, New York’s 14.1 percent of population living below the poverty line was 21st highest in the nation.

Louisiana, with a Gini coefficient of .475, was third behind Connecticut’s .486.

Even though the state’s unemployment rate was lower than the national average and the lowest on the list, Louisianans are limited in other areas that limit upward mobility, the report says. Only 82.5 percent of Louisiana residents older than 25 had a high school diploma and only 21.8 percent had a college degree.

And while the unemployment rate is comparatively low, 15.3 percent of the state’s residents received food stamps and the Louisiana median income is 10th lowest in the nation. The 17.7 percent of the state’s population living below the poverty line was fifth lowest in the U.S., the report shows.

Louisiana’s Gini coefficient of .475 is comparable to those of Ecuador (.469), Madagascar (.475), Nepal (.472) and Rwanda (.468), according to a worldwide ranking of Gini coefficients by the CIA.

Any comparison of Louisiana to those countries in misleading, however, because the Gini coefficient takes into account only the disparity between rich and poor and not median or household income.

Other states named as having income large gaps between rich and poor in the report, in order, include:

• Massachusetts (.475);
• Florida (.474);
• Alabama (.472);
• California (.471);
• Texas (.469);
• Georgia (.468);
• Mississippi (.468)

Read Full Post »

A Pew Research Center study released today indicates that Louisiana is the sixth-worst state in the nation in terms of chances of employees—any employees—getting a pay raise.

Pew Research Center, a nonpartisan think-tank conducted a study of economic mobility by examining the prime earnings period for residents in each state, specifically, the 10-year period between an individual’s late 30s and late 40s.

The survey employed three economic mobility measures to achieve its rankings: absolute mobility, which measures an individual’s wage increase over time, relative upward mobility and relative downward mobility. The latter two factors measure a person’s movement up and down the earnings ladder over time relative to his or her peers.

Of the nine states cited as exhibiting worse than average scores in at least two of the three parameters, seven have Republican administrations.

Nationwide, absolute mobility increased 17 percent but in many of the worse-off states, it was as low as 12 percent. Additionally, 34 percent of those studied ascended the earnings latter (upward mobility) while 28 percent fell in earnings (downward mobility).

While it may be a surprise to Gov. Bobby Jindal, who has been boasting to television hosts like Sean Hannity and anyone else who will listen to his banter that Louisiana’s business climate is among the best in the country, it is certainly no surprise to the working stiffs—particularly state employees—that Louisiana is one of only three states in which all three measures of economic mobility are significantly worse than the national averages.

The Pew report shows that Louisiana has a poverty rate of 17.8 percent and a median household income nearly $8,000 less than the national average and the state’s violent crime rate is among the country’s highest.

Here are the three factors used to determine Louisiana’s sixth-worst ranking:

• Absolute mobility change: 13 percent (national average: 17 percent);
• Percent with upward mobility: 28 percent (national average: 34 percent);
• Percent with downward mobility: 36 percent (national average: 28 percent).

With the state’s and nation’s upward and downward mobility figures almost exactly transposed, Louisiana citizens have to be wondering how Piyush can be so optimistic when extolling the virtues of the state outside our borders.

Jindal is likely to seize on the statement of Pew communications representative Liz Voyles who said, “Educational attainment is an extremely powerful driver of upward mobility from the bottom, and protects from downward mobility from the top and middle.” She said a college degree “quadruples a person’s chances of making it all the way to the top of the income ladder if they start at the bottom.”

The report’s findings that Louisiana also has one of the lowest high school graduation rates in the country might seem to dovetail nicely with Jindal’s proposed education reform measures were it not for Voyles’s caveat:

Poverty, particularly childhood poverty, has a major effect on a person’s mobility throughout life on a national level. “Growing up in a high-poverty neighborhood…increases a person’s chances of downward mobility by 52 percent,” she said.

The Pew report seems to reflect her words. Data show that all nine of the states with the worst economic mobility were in the top third for poverty and six of those were in the top 10.

Jindal, in all his euphoric pontification about the utopian paradise of quality education that lies just beyond the horizon of the passage of his education reforms, lays 100 percent of the blame for poor grades on teachers.

He has yet to give so much as a nod in the direction of the real root of the problem: poverty. Until he addresses the real problem, there is likely to be no real solution to Louisiana’s education morass.

Having said that, here are the Pew rankings of the nine worst states in terms of pay raise prospects, beginning with ninth worst and moving to the worst (giving, in order, the percentage of absolute mobility change, percent with upward mobility and percent with downward mobility):

• Alabama—12%, 27%, 32%;

• Florida—15%, 32%, 31%;

• Kentucky—13%, 34%, 35%;

• Louisiana—13%, 28%, 36%;

• Mississippi—17%, 26%, 36%;

• North Carolina—14%, 26%, 28%;

• Oklahoma—15%, 30%, 33%;

• South Carolina—12%, 26%, 34%;

• Texas—15%, 31%, 30%.

Which brings us to our suggestion for a new Louisiana State Motto: At least we ain’t Mississippi.

Read Full Post »