Dr. Gary Wagner – Economic Update 2022

We are joined by Dr. Gary Wagner, Acadiana Business Economist and Endowed Chair at UL-Lafayette BI Moody III College of Business Administration.

This is Dr. Wagner’s second interview, the first having been conducted in March 2020, just before the pandemic put things to a standstill for a while and threw the job market a curveball like no other. other.

The pandemic recession has been historic. Dr Wagner always follows economic data and was surprised by the number of job losses we saw in a short time, saying: “It was unlike anything we had seen in 80 to 100 years.

Fortunately, the United States has recovered all the lost jobs. Lafayette has done very well over the past six months compared to the rest of Louisiana, with many health care job gains. The oil and gas sector hasn’t lost jobs but is still hovering around 13,000, where we were at the end of 2014 when the market bottomed out.

With oil and gas still being Louisiana’s highest-paying job field, the state of this industry is a critical concern. Dr. Wagner reflected on the mid-1980s when the energy industry peaked and made up one-third of Louisiana’s economy; 33 cents of every dollar earned in those days was related to oil and gas. Today it is 1%. According to Dr. Wagner, “We are now seeing the consequences of outdated tax policies put in place decades ago that are not conducive to attracting business. Historically relying on oil and gas production as a captive resource with our tax system built around this commodity,” we can expect stagnant trading conditions.

Southern states tend to rely on sales taxes rather than property taxes, which Dr. Wagner says is a less stable and regressive way to tax citizens. He prefers to see a property tax as the primary source of revenue because it’s more stable and has less impact on low-income people who end up spending more of their income on taxes when they buy home goods. base.

Health care drives job growth in Acadiana and is our largest employer along with education, with 20% of our jobs coming from these two sectors. Six percent of our local economy is tied to oil and gas. Wagner noted that our region recovered very quickly after the blow it suffered in late 2014. “It speaks volumes about our people because few regions have rebounded from such a blow to their economy.”

With UL-Lafayette now designated as a Carnegie R1 University (a top research institution), Lafayette and the surrounding area have much to celebrate. Dr. Wagner said this recognition will attract talented people and not just academics who want to work for UL. Lafayette will be seen as a hub of creativity, talent and innovation. Innovation is the engine of a region. Other metropolitan areas that have R1 universities, such as Austin, Columbus OH, and Raleigh/Durham, have all experienced exponential growth and are known to attract talent. He noted that he could think of only two thriving metropolitan areas that do not have R1 universities: Boise, Idaho has Hewlett Packard and attracts top talent; and Rochester, Minnesota has the Mayo Clinic and is a medical center.

“Lafayette is a great place to live with an excellent university. I have worked at other R1 universities and have never seen anywhere else the connection our people have here with the university as it does at UL. The community support for UL-Lafayette is incredible. And what a beautiful place to live! People can work remotely anywhere now and have options as to where they can live. We have a very unique culture compared to the rest of the country and we could become a bedroom community for Houston. We can capitalize on our quality of life.

Inflation is the biggest problem we face today. He doesn’t predict much growth next year due to inflation. While people saved at record levels at the start of the pandemic due to uncertainty about the future, the stimulus package boosted spending to high levels, leading to a 40-year high for the inflation, the highest since the 1970s. Nothing at this stage indicates that it will turn around anytime soon. Locally and nationally, we won’t see much job growth as the Federal Reserve aggressively raises interest rates as a way to slow the economy and bring inflation under control.

Lafayette’s patent count is comparable to the national average and higher than the rest of the state. But this is not the only way to innovate in the market. Dr. Wagner would like to see a greater partnership with UL-Lafayette and the healthcare sector to drive innovation in this industry.

Investing in our public education system is also a key priority for Dr. Wagner. He thinks it’s important to keep our talent here. “The people who will drive the future of our region are here now. Investing in education and cultivating an entrepreneurial spirit in our young students will pay dividends 20 years from now. Most of our students will stay here; it is a long-term strategy.

“Seattle became ‘Seattle’ because Bill Gates was born there. Likewise, Austin is a tech hub because Michael Dell went to UT-Austin and started Dell Computers. Who knows where the next Bill Gates is, sitting around ‘Acadiana just waiting to grow? I’d rather see investment in the people who are here than trying to get people to come here. We’re underinvesting in public education. I want to see our children to be talented and innovative. Innovative places invest in education. Look at Raleigh/Durham in 1950. The research triangle was nothing. It is now one of the highest earning places in the They made targeted investments that really paid off, and they stuck to the plan.

Dr. Wagner publishes a quarterly report with updates on economic conditions and trends. You can access economic activity forecasts from Louisiana’s BI Moody III College of Business Administration here and sign up to receive updates.

We thank Dr. Wagner for his service to our community and the students he teaches. Introduction to Economics and Economic measurement analysis!