Baton Rouge, La.
This Mississippi River port and capital city of a major resource state may yet prove that geography is destiny.
In the early years of the 18th century, the French settled here, on the first bluff along the river north from the Gulf of Mexico.
Baton Rouge, which at least half the inhabitants pronounce Batten Roodge, means "red stick" in French. The name refers either to a tall red cypress, stripped of its bark and marking the line between the hunting grounds of two Indian tribes, or to tall blood-stained poles, with fish and bear heads attached in sacrifice, erected by the Indians.
In any case, Baton Rouge today is the farthest inland deep-water port in the United States. It has grown from almost scratch to become one of the top five ports in the country in 26 years.
Visitors are told with precision that 308 billion gallons of river water flow past Baton Rouge every day. These billions are available for the cheapest transportation there is and for use in industrial processes. And water, plus gas (once cheap and still bountiful), has made the area around Baton Rouge one of the leading petrochemical centers in the US. The 100-mile strip from Baton Rouge down to New Orleans is termed "the Ruhr Valley of America."
National andd international corporate names here include Ethyl Corporation, Allied Corporation, and Dow Chemical Company. The Exxon oil refinery is the secondlargest in the US. The aluminum industry, too -- Kaiser Aluminum & Chemical Corporation and Ormet Corporation are two of the big names -- has had a happy home in southern Louisiana, with its easy access to Jamaican bauxite. These capital-intensive industries require considerable support forces -- maintenance, construction, metal fabrication, and so on.
The capital of Louisiana is no exception to the rule that state government exercises a stabilizing influence over a local economy. Indeed, state government here, fueled by severance taxes on energy and other resources, has been a real growth industry. A recent study has found the number of state employees up 53 percent over the past 10 years, reaching more than 85,000.
A great many of these work in the Baton Rouge metropolitan area, where state and local government accounts for 17.1 percent of personal income. Moreover, a movement to consolidate state offices, now scattered in leased space all over town, into new state-owned facilities could culminate in a considerable construction boom downtown.
There are also two major universities here -- Louisiana State University, with some 30,000 students, and Southern University, known as the largest predominantly black university in the country, with some 8,000 students. The two schools employ a total of some 5,000 people.
Baton Rouge has also benefited from proximity to the natural gas deposits of the Tuscaloosa Trend, considered one of the most significant natural gas finds in the country over the past 20 years.
While many Sunbelt areas have blossomed as people went where few had gone before to build whole new industries, Baton Rouge has achieved its substantial growth on the basis of its natural resources and its position squarely "at the bottom of the America," near the mouth of the Mississippi, whose drainage basin is home to 60 percent of the national population.
From 1970 to 1980, the population of East Baton Rouge Parish, in which the city of Baton Rouge is located, increased 28.4 percent, to 366,191. The population of the city itself grew 32 percent during the decade. The four-parish (county) metro area contains nearing a half-million inhabitants.
The East Baton Rouge Parish labor force grew 86.3 percent over this period, to over 200,000. Per capita income rose from $2,907 to $7,016. In the past 10 years, retail sales have gone up 239.8 percent, from $550 million in 1971 to $1. 8 billion in 1981. There has been some $6.5 billion in industrial investment over the past 10 years.
The local economy prospered through the 1973-75 recession, and it weathered the slump of 1979-80 fairly well.
But the current recession has hit Baton Rouge with a thud. Local unemployment is about as bad as the national average -- around 10 percent. The petrochemical firms in particular have been hard hit. Fred Loy, vice-president of the Louisiana Chemical Association, speaks frankly of numerous and severe layoffs and of "very bleak" prospects for 1983.
Why is this recession different? Because its reach has been so broad, for one thing; the highest unemployment since 1941 has led to reduced demand for the products of the petrochemical plants, the plastics and fibers used in houses and automobiles.
Loren C. Scott, an LSU economics professor, says the city's slight dependence on durable-goods manufacturing has usually been a buttress against cycles. This recession has overrun that defense.
The oil glut and attendant price drop have hurt energy-related industry, and general recession has cut demand for energy. (The Exxon refinery, however, is running at nearly 90 percent of capacity, compared with a national industry average of 70 percent.)
The petrochemical industries are in a peculiar bind. Intrastate natural gas -- the Louisiana gas that fuels Louisiana industries -- is more expensive than federally regulated interstate gas. As a result plants outside Louisiana using Louisiana gas can undercut prices of plants inside the state.
There continue to be some bright spots even now: Retail sales and nonresidential construction are both reported to be doing well. In an Associated General Contractors of Louisiana survey, Baton Rouge members reported contracts up nearly 200 percent for the first quarter of 1982 over the first quarter of last year. Greater Baton Rouge now has some 3 million square feet of office space; another 1 million are either on the drawing board or under construction.