Our Views: The two faces of the Sun Belt

• Published: Jun 24, 2009 - Page: 8B

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For years, Louisiana was among the laggard stepchildren of the South. When other states boomed, we either were suffering from low energy prices — one of the reasons states with more balanced economies boom — or grew only modestly in terms of population and wealth.

Now, though, there’s an upside to the bad news of the past, and more spring in the stepchild’s stride because Louisiana’s economy in general is weathering the national recession better than many other states.

Having not risen so high, in terms of both house price inflation and in terms of real economic growth, our state has not had so far to fall.

The Brookings Institution think tank called it a case of two Sun Belts.

“Large swaths of the South and West, particularly metropolitan areas in Florida, Arizona, Nevada, and inland California, have suffered severe employment, output, and home value declines over the past year due to the broader housing fallout,” a Brookings analysis reported. “Wages in those metro   areas have risen rapidly, most likely due to a slowdown in less-skilled migration to those areas, and to disproportionate losses of lower-paying jobs. Yet parts of the Southwest and Deep South — including metro areas in New Mexico, Texas, Oklahoma, Arkansas, and Louisiana — have performed relatively well, experiencing less severe job losses, relatively large wage gains, and modest home price increases.”

The reasons for the difference: “Specializations in energy and government, large amounts of federal hurricane recovery funding for the Gulf Coast, and smaller increases in housing prices during the early and mid-2000s may all help to account for their better performance.”

Those are key factors in Baton Rouge’s economy and the reason that indexes compiled by Brookings and others have been kind lately to Louisiana’s capital city. There is still hurricane recovery-related spending helping New Orleans and energy-development continues along the coast, making the Houma metropolitan area among the best for job growth in the United States.

We welcome the good news, but we also caution against a belief that today’s good news will automatically translate into a quick recovery from today’s recession. Job losses are all too common in the state and in Baton Rouge’s metro area; national business trends have a local impact.

With college budgets and state   health-care spending on the chopping block, the foundations of current success might be eroded very quickly.

The cities — not only Baton Rouge but Lafayette and others — might have been helped by the concentration of “eds and meds,” what Brookings called the jobs driven by higher education and health-care institutions. Cities as diverse as Honolulu, El Paso and Washington, D.C., are among the eds and meds capitals.

Some perspective is in order. We can recall years and years of analysts noting that Baton Rouge and Lafayette were brighter spots in a Louisiana economy that lagged its peers in the South.

If that story is not to be repeated, Louisiana must orient itself toward a competitive future with the leading states of the South — even if those states struggle now with housing collapses and slowdowns in their traditional manufacturing bases.

A new economy awaits after this recession. Louisiana, and particularly Baton Rouge and Lafayette, must make decisions today to use relatively good times to position ourselves for that new economy.