The Alabama Policy Institute (API) did a deep dive into Alabama's workforce participation numbers.
The report analyzed several factors influencing employment, from automation in manufacturing to video gaming.
Alabama's Labor Force Participation Rate (LFPR) was 57.2% in 2023, compared to 62.6% nationally. There were around 140,000 job openings in the state in 2023, indicating that something was preventing people from entering the workforce.
"Increasing dependent care needs, automation in manufacturing, the opioid crisis, the decline of the nuclear family, inflation, the pandemic, expanded unemployment benefits, skills mismatches and an aging population are all strong contributors to the decline in the labor force in recent years," the report states.
Nationwide, the report found that fewer men are entering the workforce for many reasons, including being more interested in video games and leisure.
"Princeton economists estimated that video games were responsible for anywhere from 23% to 46% of the decline in work hours for young men during the 2000s," the report states. "The same researchers explain this phenomenon as the value of leisure time increasing and the value of work decreasing to men."
In Alabama, a lower labor participation rate among men is more likely due to automation in manufacturing jobs and a high number of incarcerated males.
A low LFPR is significant because it can negatively impact the economy by slowing the growth of Gross Domestic Product (GDP), leading to a higher tax rate and causing the price of goods to increase.
Further, people do not feel their wages are keeping up with inflation.
"Despite wage increases beginning to match inflation in recent months, most workers still see the wages as unsatisfactory," the report stated. "Nearly half of America reported feeling "very stressed" about price increases and wages."
So, what are leaders doing about it?
The API report listed ideas and answers from other states, including Utah, North Dakota and Nebraska. It then added notes on Alabama leaders who have taken steps to address labor force participation.
"Alabama leaders have taken note of the state's exceptionally low labor force participation rate and begun searching for solutions," the report concluded. "However, addressing such a far-reaching problem will require creative solutions and the willingness to make large changes, such as reducing regulations that prevent housing and childcare expansion."
The full report is provided below.
API Workforce by Erica Thomas on Scribd
To connect with the author of this story or to comment, email erica.thomas@1819news.com.
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