For years, Alabama Gov. Kay Ivey has said what Alabama needs is more jobs. Now, she’s admitting that the state may not have enough people to work to fill them.
Ivey published an op-ed on Thursday morning on Alabama Daily News and admitted that, despite having relatively low unemployment, Alabama’s labor force participation rate is lower than almost any state.
This suggests there may be a considerable number of Alabamians who are capable of working but do not.
According to Investopedia, the labor force participation rate predicts the size of an economy’s active workforce. The labor force participation rate is calculated by dividing the number of individuals above 16 in a given population by the total number of working-age individuals who are not institutionalized or in the military.
Unlike the unemployment rate, the labor force participation rate takes into account individuals who have stopped looking for work but still are capable of working. It also is a measure of the percentage of people who are working rather than the percentage of people who are not.
According to the Federal Reserve Bank of St. Lewis, Alabama’s labor force participation rate as of June was 57.4%. Though it’s increased slightly since January, it’s only .1 point higher than June 2022.
Meanwhile, in June, Alabama’s unemployment rate was 2.2%, over 1% lower than the national rate. When unemployment hit 2.6% in July 2022, Ivey touted it as “another employment milestone.”
She continued to tout Alabama’s employment rate for the next year in her press releases. Meanwhile, she failed to mention the state’s labor force participation problem, which was reported several times by 1819 News.
But Ivey, in Thursday’s op-ed, argued this is a “good problem to have,” continuing to promote the “78,000-plus new jobs” she claims to have recruited to the state during her tenure and the passage of her economic development “Game Plan,” which expanded special tax privileges and government funds to specific corporations in the state.
“Just yesterday, the Alabama Department of Labor reported that online job ads were up almost 11% from June last year,” Ivey wrote. “To no surprise, registered nurse positions top the chart. The ads also include anything from retail sales positions to software developers to fast food workers to maintenance workers. To put it simply: If an Alabamian can and wants to work, there is a job opening for them.”
“However, if the only measuring stick we use is the unemployment rate, we are doing ourselves, our people and our businesses a huge disservice,” she argued later in the piece. “A 2.2% unemployment rate, according to the Alabama Department of Labor, means we have a bit more than 50,000 folks looking for work.”
Ivey said she is not insinuating that Alabamians “on the sidelines” are avoiding work intentionally.
Instead, she vowed to address the labor force participation issue by identifying barriers for those not working: childcare, transportation and shifting from a reliance on entitlement programs.
Ivey also promised to use her “Strong Start, Strong Finish” education agenda and increase postsecondary education attainment to prepare Alabamians for the workforce.
“Accomplishing these benchmarks will meet the needs of our employers in this growing and evolving market,” she wrote. “Alabama has led the nation in low unemployment. Now, we will shift our focus to labor force participation. In turn, ‘Help Wanted’ signs will come down, and more of our Alabama families will prosper.”
To connect with the author of this story, or to comment, email will.blakely@1819news.com or find him on Twitter and Facebook.
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