Columnist Geoff Daily explores Lafayette’s economy and government, providing critical commentary about what’s working and what’s not.

COLUMN: Lafayette's economic performance went from best to worst. Why?

Lafayette is one of the worst performing large cities in America. That’s not my opinion. That’s the opinion of the Milken Institute, which produces the annual Best Performing Cities report. Out of the 200 largest cities in the U.S., Lafayette ranked 196th in 2024. 

Lafayette used to be a high flier on this list. Driven by Hurricane Katrina’s diaspora and a booming oil and gas industry, Lafayette spent 2007 to 2014 in the top 25, peaking at no. 9 in 2009. But the bottom started falling out in 2015 when the oil market crashed. And we’ve spent the last seven years stuck in the bottom 25. Now, according to this ranking, we’re the fourth worst performing city in America.

That news may or may not come as a surprise. The next time I hear a local leader publicly express significant concern about the overall direction of Lafayette’s economy will be the first. And Lafayette doesn’t feel like one of the worst cities in America. Life’s pretty great here actually.

Part of me wants to discredit this list and ignore it. The Milken Institute is a think tank founded and funded by notorious junk bond trader Michael Milken. The report’s methodology doesn’t capture all the nuances that would provide a richer understanding of how well a city’s performing. And you could argue that the whole report is just a glorified listicle designed to get clicks more than perform any serious analysis.

But it’s also a consistent multi-decade benchmark based on real data that’s hard to hand wave away. It’s the kind of list we should be striving to move up on. Not so that Lafayette can have an arbitrarily higher ranking, but because we want Lafayette to be a high-performing city that’s creating more jobs and higher wages and a stronger tech economy.

It’s worth diving deeper into Milken’s scores to understand what’s affecting Lafayette’s performance rating. Personally, I’m not satisfied with Lafayette ranking as one of the worst performing cities in America. And I want to see our community do more to fight back against these troubling economic trends.

Jobs, jobs, jobs

There are three main categories of econometrics used in this ranking: labor market performance, access to economic opportunities, and high-tech impact. Let’s address each in turn.

Labor market

This one’s easy to understand. It’s all about the relative growth of wages and jobs:

Measure2024 Rank2009 Rank
Job Growth 2017-202216022
Job Growth 2021-202218323
Short-Term Job Growth 2022-202311314
Wage Growth 2017-202219516
Wage Growth 2021-202218210

These rankings don’t necessarily mean our performance in these areas was good or bad in a vacuum. For example, back in 2009 when Lafayette peaked at #9, we were ranked super high when it came to job growth even though we were actually losing jobs. We were just losing them less slowly than others.

These days, jobs and wages in Lafayette are growing more slowly than most other large cities in America. That’s not surprising. Since 2014 Lafayette’s lost more than 10,000 oil and gas jobs, which doesn’t just hurt job growth; it also hurts wages since those historically tended to be higher paying jobs. Losing those jobs decreases local wages overall.

Economic opportunities

These econometrics are more recent additions to Milken scoring methodology. And they uncover some surprising findings:

Measure2024 Rank
Broadband Access 2022184
Housing Affordability 202249
Resilient Households 2022166
Gini Index 2022180

At first, I was surprised to see Lafayette’s Broadband Access ranking so low. Don’t we have some of the best internet in the country with LUS Fiber? But then I realized two things.

First, they’re using stats for Lafayette Parish, not just the city. Second, they’re tracking the number of households with broadband rather than just those with access to broadband.

Broadband access outside of the city isn’t as good in some areas. And in the city we have lots of homes that may have access to fiber but can’t afford it.

Housing affordability was another surprise given recent concern about the cost of living in Lafayette in general. But again, we need to remember these are based on parish stats, not just city.

Plus, while Lafayette’s housing costs are rising, it doesn’t seem like it’s been as bad as many other cities. So this is an example of a stat that may look OK on the surface, but doesn’t necessarily reflect the lived reality of people struggling to find affordable housing in Lafayette today.

Resilient households is a measure of how many households have the financial capacity to deal with an emergency. The Gini Index is a measure of inequality based on income distribution in an area. On both measures Lafayette’s not doing great.

Tied together, they describe how vulnerable Lafayette is. We’re prone to natural disasters, and local households don’t have a lot of cash laying around to pick up the pieces when a hurricane or flood happens. High income inequality points back to poor wage growth, and the fact that many people in our community are struggling to get by.

High-tech impact

Lafayette has long strived to position itself as a technology hub, but the results of those efforts are somewhat middling:

Measure2024 Rank
High-Tech GDP 2017-2022193
High-Tech GDP 2021-2022195
High-Tech Concentration79
LQ Count111

High-tech GDP growth is pretty straightforward as it just refers to the amount of revenue generated in our economy from high-tech companies. By that measure Lafayette’s one of the worst performing cities in the country.

The other two metrics are based on high-tech location quotient. The LQ is used to determine if an industry has the same share of employment in an area compared to the national average. It helps assess if an area is above or below average in terms of an industry concentration.

On this front, Lafayette’s not doing as bad, as we’re basically average when it comes to the size of our technology industry. But at the same time those first two numbers show that our technology industry is growing slower than pretty much any other large city in America.

So now what do we do about this?

It’s simple really. We just need to grow more jobs, increase average wages, accelerate our high-tech industry, and get more people on broadband, while improving housing affordability and lowering income inequality. Easy peasy.

Obviously none of this is easy. And there are no silver bullets. We don’t just need one more CGI to replace the jobs we lost in oil and gas. We need 15.

We don’t just need a conglomeration of sports facilities that might attract thousands of people to spend a weekend here. We need to attract thousands of people to move to Lafayette because there are great-paying jobs available for them to make their lives here.

We don’t just need better educational outcomes. We need better entrepreneurial outcomes that empower all of our young entrepreneurs to start and grow businesses here.

We need to not be afraid to admit that where Lafayette currently stands and what we’re currently doing as a community aren’t good enough. That’s not to tear down any of the existing efforts, but to build support for striving to achieve more. To regain the momentum that once put Lafayette atop the rankings for best performing large cities in America.