4 ways coastal change is impacting Louisiana’s economy

By Dr. Robert Habans, Economist, The Data Center

While Louisiana’s challenges with coastal land loss are difficult to understate, billions of dollars of investments in restoration, protection and adaptation are creating emerging, sustainable industries that are increasingly central to the regional economy of Southeast Louisiana. In The Coastal Index, The Data Center examines the potential for coastal restoration and water management investments from an economic development perspective[1]. The design and construction of water infrastructure create good-paying, accessible jobs and contracting opportunities for local businesses. While these jobs and businesses are critical to an effective implementation of the Coastal Master Plan and other resiliency initiatives, their growth can have the side-effect of diversifying the economy. This is only one of the many ways that economic and environmental change is interwoven.

This post summarizes four key takeaways from two recent Coastal Index publications that explore different economic dimensions of coastal change at length:

1. The share of Southeast Louisiana’s jobs that are middle-earning has grown less consistently than low-earning and high-earning jobs. The water management economy creates middle-earning, middle-skill jobs that are increasingly critical to the regional labor market.

Since 2001, the most consistent job gains have occurred for low-paying and high-paying occupations — they pay median hourly earnings either below $15 or above $35 dollars. However, workers who live in coastal census tracts are disproportionately likely to be employed in middle-earning occupations when compared with Baton Rouge, New Orleans and their suburbs.

These patterns only underscore the economic importance of coastal investments to create opportunity across Southeast Louisiana. The occupations associated with key water management industries tend to pay relatively well. Many of these jobs are in middle-earning, accessible occupations, which help to bolster inclusive opportunities for our workforce. Other high-paying jobs in engineering and sciences are critical to the region’s deep, diverse bench of coastal expertise.

2. Southeast Louisiana has 13 times the national concentration of employment in the heavy civil construction industry most closely tied to coastal investment.

Employment growth has been remarkable in the heavy civil construction industry most closely associated with coastal protection and related infrastructures. At about 10,000 today, industry jobs in Southeast Louisiana have roughly doubled since before the 2005 hurricanes. One in every six jobs added nationally over the post-recession period (since 2010) was in Southeast Louisiana.

Figure 1. Employment in “Other” Heavy and Civil Engineering Construction in Southeast Louisiana

While this construction growth is welcome, employment growth in other industries that conduct design and planning activities around coastal infrastructures has been less stellar. Deepening the access of local businesses and workers to opportunities and forging connections across different industries and domains of expertise will expand the impact of the water management economy.

3. Like protecting and restoring the coast, developing a regional economic specialization requires a long-term perspective.

In some ways, Louisiana is ahead of the game with respect to coastal change. As other parts of the U.S. contend with coastal issues, they may look to Louisiana’s leadership, creating opportunities for local workers and businesses to “trade” on their expertise. The coastal economy spans the design and construction of infrastructure and restoration projects, environmental science and policy, the nonprofit and public sector, and the planning and governance of community-level adaptation. Embedding diverse but specialized coastal expertise into our region’s workforce is critical both to facing our environmental challenges and to diversifying our economy.

4. Coastal areas have provided among the region’s best springboards to upward income mobility. However, the structure of opportunity is changing.

Employment opportunity shapes the capacity of our region’s communities to adapt to a changing coast, but economic opportunity has a geography that is as dynamic as the coast itself. The cornerstone industries that have long defined the regional economy are changing, especially in coastal parishes. For example, since 2001, employment in oil and gas industries has fallen by 6,000 across Southeast Louisiana, while employment in health care services has increased by 20,000. The regional workforce has grown since the recession, but many coastal ZIP codes have shed jobs.

Data from the Opportunity Atlas shows that significant variation exists across the region in terms of upward income mobility out of childhood poverty. Income mobility is high in many coastal census tracts, suggesting that communities facing the most immediate environmental risk also have traditionally provided the among the region’s strongest place-based springboards to upward income mobility.

Learn more about these and other related trends in two new papers released by The Data Center. Changing Coast, Evolving Coastal Economy unpacks industrial trends in the coastal restoration and water management economy and explores the factors that contribute to regional industry specialization. Taking a broader perspective, Reworking the Working Coast investigates how the changing geography of employment opportunity in Southeast Louisiana intersects with the changing coast.

[1] The Data Center defines Southeast Louisiana as a 21-parish region that encompasses the New Orleans-Metairie, Baton Rouge, and Houma-Thibodaux metros.