Last week, one of the newest Louisiana residents brought a deluge of media attention to the state. Zion Williamson has taken the NBA by storm after his long-awaited debut with posterizing dunks and monster ratings. Unfortunately for Louisiana, its new resident isn’t just an outlier due to his basketball skills. Zion is also one of the rare individuals to move into Louisiana rather than out in recent years.
The largest moving company in the United States, United Van Lines, recently reported that Louisiana has a 10 percentage point gap when it comes to outbound versus inbound migration. In fact, Louisiana ranked lowest among all other southeastern states, with 55% of movers departing the state. Mississippi was the only other southeastern state to have more people going out rather than coming in.
If one thing is for certain, it’s that former Louisiana residents are overwhelmingly leaving the state for one very important reason: jobs.
United Van Lines doesn’t just collect data on who is moving, it also collects data on why these individuals are moving. Of all those leaving the Pelican State, more than 70% said their decision was due to a job. The gap between people leaving Louisiana for a job versus those coming for a job was the largest of any of the reasons measured.
People’s reasons for moving are backed up by reams of economic data that speak to Louisiana’s struggling economy. The most recent report from the Bureau of Labor Statistics showed Louisiana was one of only four states to see an increase in unemployment during December 2019. The state’s unemployment rate currently sits at 4.9%. That’s 1.4 percentage points above the national average and highest in the southeast aside from Mississippi. Overall, there are 10,000 more unemployed Louisianans today than there were in October.
So, what’s leading to this lack of jobs and opportunity? There are as many answers as Zion highlights.
According to the Tax Foundation, Louisiana ranks 41st overall in state business tax climate. This poor ranking is due to the state’s especially high sales tax, corporate income tax, and personal income tax rates. Zion, for instance, will have his earnings taxed at 6% by Louisiana, while NBA players in Texas have no state income tax to reckon with. Perhaps it shouldn’t be a surprise that people making over $150,000 are the most likely residents to pack up and leave Louisiana.
Politicians have attempted, with little success, to deal with these high rates with targeted tax credits to encourage businesses to move to the state. Louisiana’s large film tax credit, which costs tens of millions of dollars but fails to create permanent jobs, is just one prominent example of the state’s overreliance on tax credits.
Taxes are hardly the only reason for Louisiana’s poor job market. According to the American Tort Reform Foundation, the state also earned the dubious distinction as the fourth-worst “Judicial Hell Hole” in the country. It’s unsurprising given that nearly $7 billion, more than $4,000 per household, was paid out in tort litigation in 2016. Additionally, a study by my organization, the Pelican Institute, found that over 2,000 jobs and tens of millions of investment were lost due to the sweeping, state-sponsored coastal litigation against Louisiana’s top job creator, the energy sector. This hardly paints an inviting picture for energy companies looking at the state to potentially set up shop.
These are just a few of the many problems facing Louisiana. The state also struggles with educational achievement, excessive regulation, and criminal justice.
All this data points to an unfortunate truth for Louisiana: While the rest of the nation may love watching our star athletes and partying in New Orleans, few are considering following Zion Williamson’s path and moving to the state.
The Pelicans were blessed by the NBA lottery in landing Zion Williamson. But the rest of the state can’t count on blind luck to bring more young and productive people to Louisiana. Accomplishing that will require complete overhauls of the tax code, legal code, and educational system to create a state that fosters job access and creation. With its new legislature meeting in March, there’s opportunity for the state to start putting up “Ws” in the policy win column, but it needs to act on fundamental reform now.
Eric Peterson (@Eric_Peterson_) is director of public policy at the Pelican Institute in New Orleans.
