Monday, September 6, 2010

Exposing a Hoax: New unemployment claims in Louisiana, April 5 to September 3

Opponents of the Obama administration's moratorium on deep water drilling have bemoaned the economic impact of the pause on employment in Louisiana. In June, Governor Bobby Jindal ordered that an amicus brief be filed in the lawsuit against the moratorium. In that brief, the governor's attorneys claimed that thousands of jobs had been lost to the moratorium at that point (less than a month after it was imposed) and that thousands of jobs were threatened by allowing the moratorium to stand.

The feared job losses have not come. And, Louisiana Workforce Commission (LWC) weekly reports show that Jindal's brief was wrong about the thousands of jobs that the governor's attorneys claimed had already been lost due to the moratorium by late June. Did the Governor and his attorneys not know what LWC's weekly reports were showing? Or, was this like his berms project, where (in that case the scientific) evidence was willfully ignored?

On page 4 of the state's 17-page brief, Jindal's attorneys declared:
The Louisiana Workforce Commission (LWC) administers Louisiana's unemployment compensation system, its workers' compensation program and its workforce programs, including job training and work search services. Because of the moratorium, many thousands of Louisiana workers have lost their employment and many more are at risk of losing it in the near future. All of the programs administered by LWC have been and will be heavily impacted by its effects. (Emphasis added)
Every Friday, the LWC issues a news release containing the number of new unemployment filings and puts the number in context: LWC compares that week's number to the previous week; compares the number to the same week of the previous year; provides a four-week moving average; and provides a total number of active unemployment claims in the state and compares that number to the previous year, and a four-week moving average for total claims.

Nowhere in the LWC weekly reports issued between the Department of the Interior's declaration of the moratorium (May 27) and the June 20 court filing by Jindal's attorneys is there any mention of any impact on new unemployment claims filings related to the moratorium. Other issues are mentioned at times, like seasonally increased claims resulting from the end of the school year or a transportation equipment disruption which led to a one-week spike. But, the moratorium is not mentioned in that period of time.

Nor has it been mentioned in any of the LWC weekly reports issued since the Jindal court filing.

In fact, based on the numbers generated by the LWC — not the rhetoric coming from Jindal, top LWC management, and other opponents of the moratorium — the deep water drilling moratorium has been a non-event in terms of Louisiana employment.

Follow the Numbers

What follows is a listing of the numbers in each weekly report issued by LWC, starting on April 5 and running through September 3. This provides information on new unemployment claims in the weeks leading up to the Deepwater Horizon explosion, through the May 28th imposition of the moratorium, through the dates of the court hearings, through the Rally for Economic Survival, up to the most current report issued by LWC.

A link to each announcement is included. The image at the top of this page charts the numbers for new claims and the moving average.

The weekly reports make clear that there has been no surge of job losses attributable to the moratorium. In fact, while other causes for new unemployment claims are mentioned in some reports, the LWC reports are notable for what they do not mention — the deep water drilling moratorium.

It also needs to be noted that since July 2, the number of people collecting unemployment benefits in Louisiana in 2010 has been lower than the number of people collecting benefits in 2009.

If the deep water drilling moratorium was causing unemployment in Louisiana, these are where the numbers would first appear.
LWC April 5 report: New claims — 4,120; four-week average — 3,988 (This report was filed on the Monday after Easter based on numbers from the previous week).

LWC April 9 report: New claims — 3,689; four-week average — 3,908.

LWC April 16 report: New claims — 4,661; four-week average — 4,067.

LWC April 23 report: New claims — 3,989; four-week average — 4,115.

LWC April 30 report: New claims — 4,982; four-week average — 4,330.

LWC May 7 report: New claims — 4,574; four-week average — 4,552.

LWC May 14 report: New claims — 4,480; four-week average — 4,506.

LWC May 21 report: New claims — 4,584; four-week average — 4,655.

LWC May 28 report: New claims — 4,645; four-week average — 4,571.

LWC June 4 report: New claims — 5,166; four-week average — 4,719. (LWC: "The largest over-the-week increases in initial claims were in educational services and health care and social assistance industries as part of the usual summer seasonal pattern.")

LWC June 11 report: New claims — 5,188; four-week average — 4,896. (LWC: "The largest over-the-week increase in initial claims was in the health care and social assistance industry as part of the usual summer seasonal pattern.")

LWC June 18 report: New claims — 4,902; four-week average — 4,975.

LWC June 25 report: New claims — 4,450; four-week average — 4,927.

LWC July 2 report: New claims — 4,456; four-week average — 4,749.

LWC July 9 report: New claims — 4,750; four-week average — 4,640.

LWC July 16 report: New claims — 4,533; four-week average — 4,547.

LWC July 23 report: New claims —5,237; four-week average — 4,744. (LWC: "The largest over-the-week increase in initial claims was due to a temporary shutdown in the transportation equipment industry.")

LWC July 30 report: New claims — 4,395; four-week average — 4,729. (LWC: "The largest over-the-week decrease in initial claims was in the transportation equipment industry.")

LWC August 6 report:  New claims — 4,109; four-week average — 4,569.

LWC August 13 report: New claims — 4,305; four-week average — 4,512.

LWC August 20 report: New claims — 3,987; four-week average — 4,199.

LWC August 27 report: New claims — 4,149; four-week average — 4,138.

LWC September 3 report: New claims — 4,120; four-week average — 4,140.
While the LWC leadership is an active participant in the politically driven, anti-moratorium hysteria, the numbers the commission produces on a weekly basis tell a starkly different story. The numbers don't have a dog in this fight. They are just the numbers; they don't have a political agenda.

The LWC numbers are saying that the impact of the moratorium has been negligible.

Why the Job Loss Claim Matters 

Judge Martin Feldman, who ruled on the request for the injunction two days after Jindal's attorneys filed their brief, signaled in his decision that the economic impact of the moratorium weighed heavily in his ruling.
The effect on employment, jobs, loss of domestic energy supplies caused by the moratorium as the plaintiffs (and other suppliers,  and the rigs themselves) lose business, and the movement of rigs to other sites around the world will clearly ripple throughout the economy in this region. (Page 22 of Feldman's ruling PDF).
 The Times-Picayune, which has steadfastly opposed the moratorium, cited the role of the economic impact of the moratorium on the development of Judge Feldman's ruling.

But, what if the job losses were imaginary, or worse, part of a hoax?

There can be no doubt that a total shutdown of deep water drilling would have a significant economic impact on Louisiana. But, that is not what has been proposed, despite the fact that this is precisely how some opponents of the moratorium have tried to frame the issue. What has been proposed is tighter safety, environmental and liability regulation on an industry that has called the shots in the Gulf of Mexico for several decades. The moratorium was used to allow new rules to be set and to determine what had gone wrong on the Deepwater Horizon.

The suit against the moratorium, though, was not brought by the companies that own the leases and are responsible for the drilling activity in the Gulf. That would be the big oil companies.

Instead, the suit was brought by essentially three groups of service companies who have bet their respective banks on deep water drilling. Those are Hornbeck Offshore Services, and companies controlled by the Bollinger and Chouest families.

These companies and those families have gotten rich helping the energy companies exploit the Gulf and Louisiana's offshore waters. In their view, no ecological or environmental cost has ever been too high a price to pay to enable them to continue their work.

Not even the largest oil spill in U.S. history.

What is equally tragic is that most of Louisiana's political class feels exactly the same way about the price the state pays for the few thousand jobs, the pittance of oil revenue (compared to, say, third world countries), and political contributions through which the industry controls the state.

The Jindal Tragedy

No politician exemplifies this craven attitude more so than Bobby Jindal. Confronted with the ruin of Louisiana's seafood industry, Jindal sided with the Bollingers, the Chouests, the Louisiana Oil and Gas Association and others in the 'no price is too high' crowd.

There was a moment after the Deepwater Horizon explosion where Jindal nearly appeared to appreciate the importance of Louisiana's coast. It proved fleeting. When he began prattling publicly for permits to build berms, it was nearly over. Any and all thoughts that Jindal cared about Louisiana's environment (other than as a backdrop for press conferences) were obliterated on June 20 when his attorneys added his voice to those of his patrons' voices in challenging the moratorium. Jindal was back 'home.'

The irony is that this so-called reformed governor is more deeply committed to protecting the interests that have dominated this state for decades than any governor in modern history, including Edwin Edwards. Edwards first came to office in the 1970s while oil and gas were still booming and jobs in the industry were plentiful.

Jindal is governor at a time when the industry has pulled its best jobs out of the state, leaving a few thousand drilling jobs. The refineries are still here. Today, the oil and gas industry in Louisiana has the distinct look and feel of a colonial power. A few tokens are thrown to the locals in the form of jobs and money for politicians, but the wealth is shipped out of state.

President Obama recognized that the interests of Louisiana and the interests of the industry are separate and distinct. He chose the interests of the state in allowing the Department of the Interior to proceed with the moratorium.

Jindal, who dreams of replacing Obama in the White House one day, either does not grasp that divergence, or he does get it but does not have the courage to act on that knowledge. Either way, it's a pretty damning assessment of the governor who is supposed to be the smartest guy in the room.

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