Posted on: October 4 2010 | Posted in: Latest News"It's not just the oil jobs that will be lost. It's tourism, fishing."
October 04, 2010
Kimberly Quillen, Times-Picayune
Job losses associated with the BP oil spill and the ensuing drilling moratorium could hurt the Louisiana economy as it pulls out of the national recession, the chief economist of Regions Bank said this week.
Unemployment rates in Louisiana have compared favorably with the national rate, often coming in well below the national average in recent years.
"I think that favorable comparison is going to diminish going forward," said Robert Allsbrook, who conducted interviews with reporters in the Gulf South this week. "It's not just the oil jobs that will be lost. It's tourism, fishing."
Allsbrook believes the long-term impact of those secondary job losses -- including tourism and fishing -- is underappreciated on a national level. He also believes Louisiana needs to mount an aggressive national advertising campaign to combat the lingering image of soiled seafood and damaged tourism attractions in the wake of the spill.
"Louisiana really needs to do the best job it's ever done in advertising its assets to tourists. They really need to step it up," Allsbrook said.
Though the recession is now officially over, Allsbrook expects the United States will experience years of slow economic growth, with the national unemployment rate staying above 9 percent this year and next.
Allsbrook said many of the small to medium-sized businesses he communicates with throughout the region aren't interested in hiring workers.
"What these business owners tell me is they're very reluctant to hire," Allsbrook said. Many of these firms are uncertain about the future demand for their goods and services. They also have learned how to get by with fewer workers and are still trying to gauge what their health care costs will be next year, he said.
A reluctance to hire isn't the only factor that will keep the national unemployment rate up.
The unemployment rate measures the percentage of the local workforce that reports itself as being out of work, and as discouraged workers who dropped out of the workforce during the recession resume job searches and are counted again as part of the workforce, they could push up the unemployment rate if not hired immediately.
Low employment levels also further discourage consumers, who have already battened down their spending.
The recession forced consumers -- whose spending collectively accounts for two-thirds of all economic activity -- to make long-term changes in their financial behavior.
Families have begun reining in spending and whittling down their debt.
"Consumers just don't feel like spending. There are a lot of reasons why. They're very confused and very worried," Allsbrook said. "Consumers are largely thinking about how to get down their monthly (credit card) payments."
"We are not spending. We're not using increasing debt to fuel growth. We're reducing debt and raising savings."
That pull-back in spending, according to Allsbrook, will keep economic growth slow for years to come.
"We've been saying since the start of this recession that we have a new reality here," Allsbrook said.
"Our message to individuals, businesses, nonprofits, is that if they're operating their plans the way they did two years ago, it's extremely important that they move quickly to re-evaluate those" because the economic environment has changed, he said.
Regions Bank is based in Birmingham, Ala., but operates branches in Louisiana.