Louisiana is home to one of the most productive workforces in the nation with a projected employment growth that is higher than the U.S. average and a worker replacement rate that will soon find employers in desperate need of younger talent, according to Louisiana State University’s (LSU) Division of Economic Development Director Stephen Barnes.
“In terms of the gross domestic product (GDP), Louisiana is much more productive than the nation as a whole,” said Barnes, who recently spoke at the Energy Summit™ 2014: The Future of Louisiana Energy. “This is one of the striking features of the Louisiana economy. Rankings vary a little over time, but Louisiana often competes as having one of the highest GDP per employee of any location in the world when we look at this state’s petrochemical and refining activities. Louisiana has a very productive workforce.”
This productive workforce expands into industries like manufacturing and natural resources/mining. When comparing employment and economic output, Barnes noted the manufacturing industry’s employment rate is at 7 percent while its economic output is close to double that. He stated overall economic value created in Louisiana’s energy sector is significantly higher than that of the U.S.
“When we take a look at Louisiana’s economy, which we see as an energy economy, we see a dramatically different picture than the rest of the country,” asserted Barnes. He elaborated although employment in these energy sectors may be much smaller than the nation as a whole, Louisiana’s individual worker GDP outpaces the U.S.’ individual worker GDP.
Employment growth is another aspect for which Louisiana outpaces the country’s average. During Barnes’ Energy Summit presentation titled “The Outlook for Louisiana’s Energy Workforce,” he noted this country’s projected average employment growth rate that spans a 10-year period is at 12.6 percent while Louisiana’s is at 13 percent.
“Energy is really what’s driving economic growth; it’s pushing Louisiana’s future growth rate above historical norms and above the natural growth rate,” explained Barnes. “The core oil and gas activities are the foundation of the industry.”
And the oil and gas industry’s recent years of rapid growth have already “soaked up much of the recent increases in workforce supply,” according to Barnes. This is leaving Louisiana with a workforce that isn’t keeping up with the demand. This industrial renaissance’s worker demand has caused Louisiana employment to move at a faster clip than the nation as a whole. It has also pushed the average wage up for workers in the oil and gas industry.
“We have already started to increase demand for workers but will put significantly more pressure on the labor market in the coming years,” commented Barnes. “So in terms of what this industrial renaissance has done, this opportunity has really driven Louisiana to a new employment trajectory that I think we would not have seen otherwise. There are fantastic, phenomenal short-term growth opportunities that are really unprecedented. And the long-term growth here is well above historical norms.”
Barnes cautioned, however, Louisiana also has to fill the employment void the Baby Boomer generation is leaving behind.
“Louisiana’s replacement rate is about 2.5 percent statewide, which is higher than the nation as a whole,” stated Barnes. “All across the country, there’s this Baby Boomer phenomenon where retirements are going to be increasing and this is something people have been talking about for a long time. In Louisiana, that problem is accentuated by the fact historically we had ups and downs that have tilted a little more heavily toward folks who are very near retirement.”
For more information, visit www.enrg.lsu.edu or call (225) 578-4400.
