One in five Louisiana residents lost at least a quarter of their available income between 2008 and 2010, according to an economic insecurity index released Friday by the Rockefeller Foundation and Yale University.
That percentage — 21.8 to be precise — was enough to rank Louisiana 11th-most insecure in the nation, better than many of its Southern counterparts but worse than the national average of 20.3 percent.
The index used survey data compiled by the federal government but keyed on declines in “available household income,” excluding medical bills and debt service from one year to the next. It did not include declines in home values.
“The Great Recession was both broad and deep. No part of the nation was spared,” Jacob Hacker, director of the Institution for Social and Policy Studies at Yale University, said in a release. “Louisiana experienced even higher levels of insecurity than the country as a whole — over 1 in 5 residents experienced large economic losses in 2010. And as in the rest of the country, economic insecurity is substantially greater in Louisiana today than it was a generation ago.”
“Economic Insecurity Across the American States” tracks the percentage of the population of economically insecure back to 1986. It excluded Alaska and Hawaii and included Washington, D.C.
The report noted a rise in economic insecurity since 1986, with the state actually hitting its peak — 23.0 percent of the population — in 2002.
The report found that Mississippi, Arkansas, Alabama, Florida and Georgia have the highest levels of insecurity for 2010, while New Hampshire, Wisconsin, Connecticut, Washington and Minnesota were ranked as the most economically secure.
The state’s 11th ranking is for the period that covers the most recent recession, which ran for 18 months beginning December 2007, though Louisiana’s slump lagged the nation somewhat.
Asked what kind of person makes up the one in five, index researcher Stuart Craig said it could include the working poor or middle class hit by a layoff, or a wealthier family suffering losses in the stock market.
“It’s everybody,” he said, noting the report doesn’t get into the specific causes, but does reflect high economic insecurity is correlated with lower education levels.
“Insecurity is linearly related to education,” he said. “The more educated people are, the more secure they tend to be, and the proportion of people in Louisiana who live in a household headed by a college degree is one of the lowest in the nation.”
States with a greater percentage of black people and Hispanics are less economically secure, and policies affecting employment at the state level can also play a major role in the ranking, the report said.
Michael Manning, president and chief executive officer of the Greater Baton Rouge Food Bank, said there has been a steady increase in need since the financial crisis and the beginning of The Great Recession.
He said a state with chronic poverty has a high level of exposure not only to job losses but day-to-day realities like rising food and gasoline prices.
“There are so many more people who are food insecure or barely above poverty level in this state that a significant rise in gas prices or food or other things will significantly impact them,” he said. “That can make those numbers grow exponentially. They don’t have the margin of error that middle-income people have.”
Manning was quick to add, however, that even those at the middle-income levels aren’t as safe as they often think. A layoff or other financial setback can change things very quickly.
He said the food bank and its partners saw an increase in use by those who lost their life savings at the hands of R. Allen Stanford, who was sent to federal prison earlier this month for 110 years for swindling investors out of $7 billion, many of them in south Louisiana.
“We see that sporadically, as situations present themselves,” Manning said.
Manning said another category of people on the margins are the elderly living on a fixed income.
“They are in a similar situation to the poor,” he said, noting they often have to make a choice between food and medicine. “They are in effect becoming the new poor.
“The thing people don’t realize is, it’s their neighbors,” he said. “It’s so much broader than the traditional vision of the poor and impoverished.”
Manning said Louisiana has also seen a significant number of people coming to the state from the country’s many hard-hit job markets in hopes of finding work. With some good press and a slightly lower unemployment rate, it’s not unheard of for people to pack up the car and head to Louisiana looking for a fresh start.
“They’re just trying to follow the work,” he said. “Some people have said it’s the new migrant farm workers. People who have lost everything and are just trying to find something somewhere else, just a chance.”