Louisiana still hasn’t recovered all the jobs it lost during the pandemic

Graph depicts the total non-farm jobs in Louisiana from pre-pandemic to May 2024. Louisiana is one of only a handful of states that has still not recovered all the jobs it lost during the coronavirus pandemic. (Image: Federal Reserve Bank of St. Louis)

While the rest of the nation has far surpassed the number of jobs lost during the coronavirus pandemic, Louisiana is one of only a handful of states that has still not recovered to what is a relatively low threshold in a burgeoning economy.

Louisiana had roughly 1.96 million jobs in February 2020, about a month before the COVID-19 pandemic reached the state and prompted emergency lockdowns that shuttered businesses and spurred layoffs across many job sectors.

With roughly 1.96 million jobs as of May 2024, the state’s job numbers have nearly rebounded but remain about 1.5% short of the pre-pandemic figure, according to data from the U.S. Bureau of Labor Statistics.

The United States, as a whole, recovered all of its pandemic job losses by June 2022 and has been growing steadily since then, surpassing the pre-pandemic figures by 4.2% or 6.3 million jobs as of May.

Louisiana is one of only five states that has yet to recover on the employment front. The others are Hawaii, Maryland, Massachusetts and Vermont. Like Louisiana, they are all just shy of their pre-pandemic jobs numbers.

Louisiana’s metropolitan areas, except for Baton Rouge and Lafayette, have struggled to regain their pandemic job losses. Baton Rouge has outshined the rest of the state by exceeding the February 2020 threshold by roughly 3% or 13,000 jobs, while Lafayette has broken even.

The New Orleans-Metairie area, the largest metropolitan statistical area in the state, remains about 4% shy of its pre-pandemic employment with a deficit of roughly 26,000 jobs.

The leisure and hospitality job sector, which services the tourism industry, has experienced the most stubborn recovery among all of Louisiana’s sectors, according to BLS data. It remains over 8% shy of its pre-pandemic level.

This is likely what is preventing a full recovery in the tourism-heavy New Orleans area, according to three economists interviewed for this report.

All three agreed Louisiana is recovering slower than other states, but they don’t all agree as to the reason why.

Gary Wagner, a University of Louisiana-Lafayette economist, pointed out Louisiana’s recovery ranks 49th in the nation as of May and said it is due to the state’s “unfavorable” tax and regulatory structure relative to other states. Wagner didn’t say which specific taxes or regulations are holding the state back.

Phillip Sprehe, an economist and analyst for the workforce information services provider Geographic Solutions, said taxes and regulations don’t appear to be the culprit when one compares Louisiana’s data to that from other states and sees tourism is slow in many places.

“We’re seeing this nationwide,” Sprehe said. “There’s not an obvious law or regulatory hurdle that you can link to the employment numbers in leisure and hospitality.”

Sprehe said he believes the current jobs numbers in the tourism sector are likely the new normal as many employers have adapted to the labor shortage in various ways including by implementing new technologies such as kiosks that have taken the place of cashiers and servers.

Another lagging industry in Louisiana is the public sector, he said. Total employment across federal, state and local government in Louisiana remains almost 4% shy of its pre-pandemic figure.

Loren Scott, a former LSU economist who runs a private consulting firm in Baton Rouge, said he suspects the convention business in New Orleans has still not recovered from the city’s lengthy pandemic-era lockdowns, which continued long after most other areas of the state.

“The problem was the number of conventions in New Orleans still has not recovered,” Scott said. “Right after the pandemic, they not only had canceled a bunch of conventions during COVID, but they then continued to hold them virtually.”

Not all is bad for Louisiana, Scott said. The Baton Rouge area is showing growth from many industrial construction projects, especially in Ascension Parish.

There are roughly $30 billion worth of construction projects currently underway in Louisiana and another $120 billion pending, according to Scott.

“Normally, a billion dollars would have been a great year [for that sector],” he said. “Everybody else is probably waiting until the November elections to decide whether to pull the trigger [on their projects].”

The heavy and civil engineering construction job sector has seen significant growth statewide since February 2020 and a remarkable 44% rise in the Baton Rouge area, according to BLS data.

Other job sectors doing well include manufacturing with a 1% growth above its pre-pandemic level and professional and business services with 2% growth. Within the professional services, the science and tech sub-sector has seen a staggering growth of nearly 7%. Also, jobs in the private education and health services sub-sector have increased nearly 3% over its pre-pandemic figure.

Scott said Louisiana’s recovery is slow because the state still struggles with a labor shortage.

“I make probably 200 phone calls across the state talking to various industry players,” he said. “They all tell me everybody’s still having trouble finding workers.”

The next round of jobs data should be released on Aug. 2.

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Correction: This story was updated to include a more accurate description of Geographic Solutions.

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