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Evaluating Alabama’s Economic Progresscomment (0)

May 23, 2013

By Jim Williams


 

Alabama trailed all but four states in employment growth during 2012, according to data recently released by the U.S. Department of Labor. Federal statistics also show that the number of Alabamians employed in 2012 was 5 percent lower than in 2007, the peak year before the “Great Recession” of 2008–2009. Only three other states had worse records over this six-year period.

Jobs and personal income are the key indicators of a state’s economic performance, and Alabama’s governors traditionally pay great attention to them. Often they rate their performance by citing the number of jobs announced in economic development projects, but growth in total employment and personal income per capita are much better indications of the state’s actual progress. 

These negative employment results have captured current attention, but it is important to place them in context. Are there bright spots in the state’s employment picture, and where might attention be focused to create improvements?

Alabama’s job-creating performance in the years leading up to the Great Recession was perhaps the best the state has known. In 2007, our unemployment rate was lower than that of all but 10 other states, and employment peaked in total and as a percent of the state’s population. Thus, 2012 employment is being compared with stellar results from the pre-recession period. In some ways that momentum continues: for example, Alabama’s unemployment rate has remained at or below the national average in all but three of the past 37 months.

The most recent employment data from the Alabama Department of Industrial Relations indicate monthly job growth, but the longer-term picture continues to reflect mixed results for the recovery period. 

Statewide employment in April 2013 was about 43,600 or 2.3 percent lower than in April 2007. Construction employment was down by more than 33,000 or 30 percent; manufacturing jobs were off by almost 49,000 or 17 percent; and retail and wholesale jobs were down by about 24,000. On the other hand, jobs in healthcare and social assistance were up by more than 15,000 or 8 percent, and government employment by 16,400 or 4.5 percent.

The employment picture is much better in Alabama’s larger urban areas, home to about two-thirds of the state’s jobs, than in the more rural parts of the state. PARCA calculations indicate that the state’s “metropolitan” counties had a 6.4 percent unemployment rate in 2012, compared to 9.7 percent in the remaining counties. 

EDITOR’S NOTE — Jim Williams is executive director for the nonprofit, nonpartisan Public Affairs Research Council of Alabama.

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