Problem Definition

Too many Louisianans live with economic hardship. From 2007 to 2018, “Louisiana showed steady economic improvements according to traditional measures. Unemployment in the state and across the U.S. fell to historic lows, GDP grew, and wages rose slightly” (Louisiana Association of United Ways, 2020, p. 1). At the same time, “the cost of household essentials (housing, child care, food, transportation, health care, and technology) increased faster than the cost of other goods and services” (p. 1). During this period, the percent of Louisiana households in poverty stayed consistent at 18% while the percent of households above poverty but classified as ALICE – Asset Limited, Income Constrained, Employed – rose from 23% to 33%. This adds up to 51% (or nearly 900,000) of Louisiana households struggling financially and not having the means to maintain an economically stable household.

Evidence

Data from the American Community Survey shows half of Louisiana households make less than 300% and more than 60% of Louisiana households make less than 400% of the federal poverty threshold (U.S. Census Bureau, 2020). The ALICE project calculates that a stability budget – the costs of housing, childcare, food, transportation, healthcare, a smart phone plan, taxes, and a 10% contingency fund – would provide $47,532 for a single adult and $114,948 for a family of four (two adults, two children). This is over 360% of the poverty threshold for a single adult and 450% of the poverty threshold for a family of four. Assuming a work year of 2,000 hours – 38.5 hours every week, without vacation, holiday, or leave time – a single adult would need to make an hourly wage of $23.77 while the adults in a family of four would need $28.74 an hour each to keep an economically viable household in Louisiana.

Louisiana ranked 50th on America’s Health Rankings social and economic factors, health behaviors, and health outcomes.

Louisiana defaults to the federal wage rate, and OxFam America reports that 38.9% of “workers in Louisiana make less than $15 per hour” compared to the national average of 31.9% (2022). Women in Louisiana are more likely to earn less than $15 than men at a rate of 49.5% to 28.9%. Racially and ethnically marginalized demographics also earn less than their white counterparts. While 28.4% of white Louisianans earn less than $15, 58.1% of Black, 50.4% of Hispanic/Latinx, and 33.7% of Asian American and Indigenous Louisianans draw less than $15.

“Poverty and low-income status are associated with various adverse health outcomes, including shorter life expectancy, higher infant mortality rates, and higher death rates for the 14 leading causes of death” (American Association of Family Physicians, 2021). Unfortunately, “poor health also contributes to reduced income, creating a negative feedback loop sometimes referred to as the health-poverty trap” (Khullar & Chokshi, 2018, p. 1). In 2021, Louisiana ranked 50th on America’s Health Rankings social and economic factors, health behaviors, and health outcomes and the state’s challenges included a “high percentage of households with food insecurity” (United Health Foundation, 2022). Feeding America reports Louisiana had a 16.1% food insecurity rate (compared to 11.5% for the nation) in 2018 and 11% of these were ineligible for SNAP due to making over 130% of the poverty level while 31% were ineligible for SNAP and other nutrition programs because they made more than 185% of the poverty level (2021).

Origins of the Problem and Its Solutions

“Because of the problem of infinite regress, the ultimate origin of an idea, concern, or proposal cannot be specified” (Kingdon, 2011, p. 73). One could trace the problem, solutions, and politics related to economic inequity in Louisiana to America’s beginning – when the Founders established policy and practice that only allowed white men with property to have political and economic power and many others in the country were viewed as property/currency – or even earlier. The timeline for this policy area contains many major events:

• Reconstruction (1865-1877): rebuilding of the South, Black enfranchisement
• Jim Crow Era (1877-1965): Black political and economic disempowerment
• Progressive Era (late 19th century-1920s): social reforms, activism, segregation of labor unions and the federal government, revival of the Ku Klux Klan
• Great Mississippi Flood (1927): millions of acres from Illinois to Louisiana flooded, displaced ~700,000 people
• Huey Long elected Governor (1928): populist Democrat won Louisiana appealing to poor in the state
• The Great Depression (1929-1941)
• Roosevelt’s New Deal (1933-1939): policies, programs, and projects to stabilize the economy and provide jobs; Fair Labor Standards Act establishes 1st national minimum wage
• Civil Rights Movement (1945-1968): desegregation, end of the “Solid South”
• Kennedy’s New Frontier program (1961-1963): included a focus on poverty eradication
• Lyndon Johnson’s Great Society Program (1964-1965): included War on Poverty
• Age of Reagan (1980-1989): national turn to conservatism, tax cuts, increase in military spending, War on Drugs
• Clinton Era (1993-2001): 1994 crime bill lent to increased criminalization and mass incarcerations, 1996 Welfare Reform Act created work requirements for temporary financial assistance
• Living Wage Movement started in Baltimore (1994)
• Louisiana established local minimum wage ban (1997)
• George W. Bush’s Fair Minimum Wage Act (2007): minimum wage increased from $5.15 to $7.25 over 2 years
• Great Recession (December 2007-mid-2009)
• New Orleans Minimum Wage Ordinance (2015): first successful passage of wage ordinance for the city
• COVID-19 pandemic (2020- ): economic recession, health inequities exacerbated/brought to the fore

We could argue the problem became a problem – not merely a condition but rather something someone ought to do something about – for Louisiana in the late 1920s. A crisis, the Mississippi River Flood, peaked in the spring of 1927. It “inundated 16 million acres of land” from Illinois to Louisiana, displaced an estimated 700,000 people and “disproportionately impacted African Americans” mainly in Mississippi River Valley states including Louisiana (Coyle, 2019). “A stingy fiscal policy that offered little aid to the flood victim, implemented under Republican President Calvin Coolidge drove many African Americans from the party of Lincoln into the Democratic party” (Bradshaw, 2021). On the heels of the flood came Huey Long’s 1928 campaign for governor in which he told the poor “he would bring them roads, books, and education, and stand up for them against big business” (Leavitt, 2014). This appealed to poor Black, Cajun, and rural Louisianans who had suffered most from the flood, and – combined with supporting Catholic candidates in south Louisiana, running a campaign “remarkably free of race baiting,” Long’s reputation as a champion for the common people, and his rural roots and showmanship – helped him secure the office by the largest margin in state history (Haas, 2021).

Even Republican governors in the late 20th century and into the early 2000s “generally continued high levels of state services despite often severe budget difficulties”

For a century, the problem has persisted with an ebb and flow in prominence in the public view and agenda. “People figure either they have solved it, or they did the best they could and the issue must lie fallow for a time until they make another try” (Kingdon, 2011, p. 104). Yet, 80 years after the flood, “from 2007 to 2018, the cost of household essentials (housing, child care, food, transportation, health care, and technology) increased faster than the cost of other goods and services” and “in Louisiana, the percentage of households that were ALICE rose from 23%… 33%” (Louisiana Association of United Ways, 2020, p. 1). This was followed just two years later by a pandemic that exacerbated inequities.

It is difficult to determine what came first or existed in high volume at points across this timeline – perception and interpretation of the problem, potential solutions, or political shifts in public mood, organized forces applying pressure, and governmental turnover and jurisdiction battles. For instance, was the 1997 Louisiana ban on local minimum wage mandates initially a solution to a problem, a solution in search of a problem, or a response to changes in statewide public mood, office occupants, or jurisdictional power struggles? It is hard to say. What can be said is that change in this policy area has been a mixture of the big (e.g., the Great Depression) as well as the incremental (e.g., gradual increases in the national minimum wage over 70 years).

100 Years of What’s Been Tried

From Huey into the New Millennium

Proposing policy to solve economic hardship is no new phenomenon for Louisiana. However, over the course of Louisiana’s history, strength to follow through with many of these proposals has been lacking:

Louisiana’s governors during the early twentieth century generally followed [a] cautious approach to government, occasionally advocating gradual improvements if they would not cost too much of the state’s money. Those governors willing to spend money to improve living conditions in the state faced often insurmountable obstacles in the legislature or the electorate still dominated by conservative fiscal philosophy. […] Some Progressive impulses obviously affected Louisiana during the early twentieth century […] but these passages reveal the essential characteristic of state services and projects provided by most Louisiana governors before 1928, never enough money to meet the needs in the state and not enough political fortitude to lead the voters to provide the necessary funds, even for the few services that they were willing to tolerate […] The result of that lack of will and ability in Louisiana’s political leaders was that many poor people “led lives of varying degrees of  misery.”

Sanson, 2006, pp. 267-268

This approach dominated Louisiana politics and policy until the 1928 election of populist Democrat Huey Long. In his campaign (against two conservative Democrats), he “promised the moon to the poor” (Leavitt, 2014). His appeal to disempowered Louisianans combined with supporting Catholic candidates and his rural roots and showmanship helped him secure the office. In his inaugural address, Long declared:

Every dollar wrung from the taxpayers of this state forms a part of a sacred fund that is pledged by the people for their own care and to provide for their children and the generations that are to come, On principle, nothing is further from right than to extort money through taxation and then to use those funds for purposes and causes opposed to the public interest.

Sanson, 2006, p. 269

“The truth is, we have a system of corporate welfare”

As governor, Long (both a vocal critique of wealth distribution in America and a demagogue who held tight to authority and used intimidation tactics against political enemies) felt “the way to alleviate poverty was to take from the top and give to the bottom,” and he “made massive investments in public infrastructure, including hospitals, schools and roads” (Harris-Perry, 2013). He imposed or increased many taxes including sales tax, severance on natural resources removed from the state, corporate franchise tax on businesses’ net worth, and “graduated individual and flat corporate income taxes” to fund investments in public services and infrastructure (Sanson, 2006, p. 269). Long’s policies “became so ingrained in Louisiana’s politics” that future governors were unable to successfully undo his tax policies that generated revenue for social services voters liked, and even Republican governors in the late 20th century and into the early 2000s “generally continued high levels of state services despite often severe budget difficulties” (p. 270). Louisiana voters rejected cuts to social services and “all of these governors had to contend with people’s vision of what was possible in Louisiana government – a high level of state services that they had come to consider as an entitlement – a vision created by Huey Long” (p. 271).

From Jindal to Now

This changed in more recent years. In 2009, Governor Bobby Jindal “helped push through legislation to cut personal income taxes and worked to enhance Louisiana’s already robust corporate tax breaks,” and corporate subsidies “shot up during his tenure” (Respaut and Thevenot, 2016). At the end of his time as governor, Jindal admitted, “The truth is, we have a system of corporate welfare,” and at that point the state was exempting in excess of 80% of corporate income taxes since 2012 when it exempted “about $1.8 billion” (2016). As taxes (thus revenues) were cut, so were budgets for education, healthcare, and social services. The Department of Children and Family Services (DCFS) had “its budget slashed in half over eight years,” lost one third of its workforce, and became “a cautionary tale about how deeply budget cuts have impacted state services” (Deslatte, 2016). Because DCFS oversees economic stability programs for the state including – Supplemental Nutrition Assistance Program (SNAP) and the two Temporary Assistance for Needy Families (TANF) funded programs – cuts in resources and personnel to this agency affect services to poor and low-income people.

In his inaugural address, current governor John Bel Edwards proposed better funding to K-12 and higher education, Medicaid expansion, “a modest, but meaningful, increase to the minimum wage,” gender pay equality, and reworking “the failed system of tax incentives, credits and rebates, which bleed the state’s revenue” (Edwards, January 2016). The next day he expanded Medicaid, and two months later he outlined an agenda to decrease poverty and empower families: reforms in K-12 education, increasing the minimum wage to $8.50 by 2018, and legislation to close the gender pay gap. In 2017, Edwards’s agenda included 25 criminal justice reform goals – some of which would address barriers to economic stability for those in the sights of the criminal legal system – as well as the same equal pay and minimum wage proposals. His agenda has continued to push for a minimum wage increase and economic empowerment.

a single adult would need to make an hourly wage of $23.77 while the adults in a family of four would need $28.74 an hour each.

A state minimum wage above the federal level has been proposed since at least 2005 by over a dozen (Democratic) legislators. These proposals have never made it to a governor’s desk. Additionally, a minimum wage preemption was signed into law in 1997 and prohibited local governments from establishing a mandatory minimum wage that would apply to private employers. This preemption was amended in 2012 to place a similar prohibition against mandating minimum vacation or sick leave days – paid or unpaid. According to the Partnership for Working Families, preemption “is increasingly being used as a tool by corporations and anti-regulation lawmakers to disempower low-income communities of color and roll back gains for women and people of color” in Louisiana and other states (2019, p. 5).

Ideological Themes and Approach to the Problem

Baked into all policies (failed, successful, and potential) and ideas on what needs to be addressed to solve economic hardship in Louisiana are multiple ideological themes:

• definitions of poverty, hardship, and need
• definitions of a fairness, justice, and public interest
• rights, responsibilities, roles, and powers of individuals, industry, and government
• what should be criminalized/penalized, how, and to what extent
• individualism vs. collectivism

These ideologies call forth questions, Louisiana has grappled with throughout its history. Who is in need and who deserves what assistance? Who – whether individual, organization, community, or government – should take what actions or face what consequences and when? What do we owe and what are we owed at various levels of society? These questions tie into service delivery.

From federal to the local level, government has been involved in these policies. SNAP and TANF are federal programs that give grants to states who then administer programs and choose how to distribute funding with local offices serving applicants and recipients. The federal minimum wage requires states to pay that rate, the state decides if it will set a higher rate, and localities may choose to implement their own minimum/living wage policy (within state law) as New Orleans did in 2015. All levels of government can choose credits or subsidies to offer, taxes to levy on individuals and businesses, laws to criminalize or decriminalize acts, and to provide incentivizes to remove barriers and support low-income people.

What do we owe and what are we owed at various levels of society?

Because of the levels of government involved, successes and failures of previous policies, and complex nature of the problem, community participation is encouraged and vital to policy and service delivery related to economic hardship. It is also critical because the policy history of the Louisiana state house and legislature point to a certain political polarity that could be overcome by community. Additionally, racism, sexism, and other -isms that put certain groups at varying degrees of economic disadvantage are “endemic to the American normative order and a pillar of American institutional and community life” (Charles & Fuentes-Rohwer, 2021, p. 1141). It is thus necessary to approach the problem of economic hardship with a lens that “forces us to ask what the state owes its citizens, all of them, and demands the provision of social services adequate to meet the needs of all of its citizens” – targeted universalism (pp. 1139-1140). Within this framework “universal goals are established for all groups concerned” and “strategies developed to achieve those goals are targeted, based upon how different groups are situated within structures, culture, and across geographies to obtain the universal goal” (Othering & Belonging Institute, n.d.).

Policy Alternatives & Criteria

Due to (and despite) Louisiana’s history on the topic, policy entrepreneurs have highlighted several challenges and alternatives. Some, like Edwards, Democratic legislators, and the Louisiana Budget Project push for the establishment of a minimum wage. Power Coalition for Equity & Justice states racial discrimination, “lack of access to skills training that leads to careers,” “limited transit options, criminal records, the high cost of childcare, and poor credit” block employment for Black Louisianans (Crowder, et al., 2018, p. 4). They propose several policy changes including legislation that allocates funds to cooperative businesses for technical assistance and capital access, expands apprenticeships and paid training, creates a state-administered earned income tax credit for noncustodial parents, incorporates parenting skills in workforce development, develops “local revenue sources to increase childcare,” encourages “employers to expand childcare benefits for low-wage workers,” and encourages businesses to target hiring to local and underserved populations (pp. 18-20).

“Louisiana has the 14th most unfair state and local tax system in the country”

Like the Power Coalition’s attention to training and workforce development, the conservative think tank group Alliance for Opportunity says Louisiana’s career/technical education is “poorly aligned to labor market demand” (Alliance for Opportunity, 2022b). Given that Louisiana is often known as the country’s incarceration capital, these two policy entrepreneurs and others across the spectrum agree that criminal legal system reforms are necessary on the path toward economic stability. Proposals along this seek to expand alternative courts, expand the “ban the box” (asking for criminal history disclosure) to private employers, limit information requested in occupational licensing background checks, establish a volunteer criminal law oversight commission, reduce/replace court fines, repeal legislation requiring mandatory fines, centralize court funding and place it under legislative control, incentivize re-entry hiring, and clear certain criminal records after a period.

Alliance for Opportunity also suggests an inefficient benefits system “traps citizens in poverty,” and they propose a merger of workforce and human services systems and consolidating benefits programs (Alliance for Opportunity, 2022c). Together Louisiana calls for shifting power over the Industrial Tax Exemption Program that causes “local governments in sixty of Louisiana’s sixty‐four parishes [to lose] $1.9 billion in revenue” from exempted corporate property taxes that could be spent on raising wages, job creation, and lowering private property taxes (2017, p. 3). The Institute on Taxation and Economic Policy says “Louisiana has the 14th most unfair state and local tax system in the country” with several regressive features in the tax code that require the lowest earners to pay a greater share of their incomes, thus the tax code requires revision (Wiehe, 2018, p. 69). Finally, Louisiana Budget Project, suggests surpluses such as the “more than $3.6 billion in windfall revenue” in the current fiscal year should be distributed to low-income households via one-time payments (Voss, 2022b).

“The desired outcome is to maximize the number and percent of Louisianans – with focus on women, gender minorities, and racially marginalized people – who can afford to maintain a viable household”

Due to gender and racial inequity illustrated by Louisiana’s income data, the primary criterion for choosing among the alternatives is equality/equity/justice with efficiency second. The desired outcome is to maximize the number and percent of Louisianans – with focus on women, gender minorities, and racially marginalized people – who can afford to maintain a viable household. The chosen policy must be intentional not to neglect these populations, exacerbate barriers, or create constraints. It should strive to address the roots of how and why these populations are disproportionately affected and experiencing economic hardship.

Political acceptability is a useful criterion here as it is necessary to consider how much opposition or support the policy has and what resources will be required to make it more acceptable. Related to this criterion, legality must be considered as the policy must either agree with or change current laws. It may be the case that “it is worth taking a gamble on a policy that might – or might not – be adjudged illegal when tested in court” (Bardach, 2012, p. 41). Finally, robustness/improvability is a criterion because “the implementation process has a life of its own,” and this policy will have to survive the cogs of administration if adopted (p. 42).

Proposed Policy

Because the policy would need to garner support from a variety of inside and outside participants, it also needs to have elements that appeal to these different entities’ personal interests and values. The proposal, investment in Louisiana’s workers, is offered here:

• Reduce the Industrial Tax Exemption Program property tax abatement rate from 80% to 10% and use the recuperated revenues to incentivize businesses to engage in worker-empowering business practices that establish them as Employers of Choice including provision of livable wages, paid vacation and leave time, tangible support for education and workforce development, and targeted support for community-based programs that serve the most economically vulnerable populations
• Return budget surpluses over a cap to Louisianans in the form of 50% to investments in infrastructure, health, education, and small businesses, and 50% distributed as direct cash payments to households in targeted bands according to income levels (with the lower 60% of households receiving at least 80% of distributed funds with the balance to be used in administration of the payment program and payments to the top 40%)

Using existing and reclaimed revenues, this two-part policy can pay for itself and help struggling families and workers all over our state get onto stable economic ground.

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References

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Alliance for Opportunity. (2022b). Ensure Everyone Has a Right to Earn a Living. Retrieved from https://allianceforopportunity.com/focus/work/

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Charles, G.-U. E., & Fuentes-Rohwer, L. (2021). Pathological Racism, Chronic Racism & Targeted Universalism. California Law Review, 109(3), 1107–1141. https://doi.org/10.15779/Z38QR4NR4G

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