While Alabama’s unemployment number hovers around 3%, the state’s economy is still struggling with significant headwinds, given the workforce participation numbers are down significantly from their highs prior to the pandemic.
That has led to supply chain disruptions, delay of expansion efforts, and some businesses having to limit their hours of operation to deal with the labor shortage.
During an interview with Mobile radio FM Talk 106.5’s “The Jeff Poor Show,” State Rep. Danny Garrett (R-Trussville) said the drop in workforce participation has not gone unnoticed by state policymakers.
“The analogy that I’ll make, and it may be a poor analogy, but [Pete] Buttigieg recently said the reason we had all these backups at the ports coming into the country was because of the strong economy,” he said. “Of course, that is not the case. There are a lot of problems and a lot of reasons for the backups — not related to the economy is moving so fast we can’t unload things fast enough. The same is a lot of our economic spin that is going on right now. I think unemployment is low. But that is only low because very few people who are not working are looking for work. I think the last number I saw only had 6,500 people who were actually technically unemployed, meaning they don’t have a job. They’re not looking for work. There are probably 50,000-60,000 people in the state who were employed prior to COVID that are now not working and are now not looking for work.”
“And so, they don’t come into the unemployment statistics,” Garrett continued. “They’ve become part of the labor participation rate. Now, I’ve learned the highest our labor participation rate has been in Alabama has been 61%. It dropped down to around 55%. Now, I think it is back up to around 56-57%. But that’s a lot of people that are just not looking for work. And that’s troubling because if you look at the low unemployment rate — every you go, businesses can’t hire workers. They’re advertising for workers. They’re shutting down the hours. We have plants and factories that want to expand. And even before the pandemic, they could not find workers. So, there’s this workforce issue in the state, but it’s been exacerbated right now because we’ve got people who are just not looking for work.”
According to the Jefferson County lawmaker, with the billions of dollars injected into the Alabama economy from the federal government, an artificial minimum wage has been established of “about $15 an hour.”
“I’ll say this, too — with all the federal assistance — there has been $47 billion of federal money come into the state thus far, and there is a lot more to come,” Garrett added. “Of that $47 billion — some of that has been to supplement unemployment benefits the state did away with June 19, some of it is in these childcare credits that used to you had to file your return and get it on the backend when you file your return. Now this money is going in advance form straight to people. You had rental assistance. You had a 30% of the SNAP benefits. We have, through the back door, managed to set a new minimum wage that’s about $15 an hour because the employers I’m talking to, and the data I have come across really suggests it takes about $32,000 a year for someone to get back in the workforce and to forego all the federal assistance they’re getting right now. It’s a problem for us right now. Some of these benefits are expected to expire at the end of the year. I would be surprised if they’re not extended.”
Garrett insisted elected officials and their staff at the executive level were exploring solutions.
“Labor participation is an issue,” he continued. “The good news is the Governor has a got a good team, and they’re gathering data, and in the next couple of months, I think we’ll have some good recommendations. The lieutenant governor has a workforce task force that has been focused on this. I’m less focused on the unemployment rate and more focused on the labor participation rate and what we can do to get that back into balance.”
@Jeff_Poor is a graduate of Auburn University and the University of South Alabama, the editor of Breitbart TV, a columnist for Mobile’s Lagniappe Weekly, and host of Mobile’s “The Jeff Poor Show” from 9 a.m.-12 p.m. on FM Talk 106.5.
