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Economy

Study | Alabama’s Economy: Progress and Prospects

Stephen G. Katsinas and Noel E. Keeney

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A key issue facing businesses and citizens alike is how will our state capitalize on the current economic boom to prepare workers for 21st century jobs. Before analyzing Bureau of Labor Statistics data and their implications for policymakers, we begin by noting there is much good news:

  • From November 2018 to November 2019, Alabama led the nation in lowering its unemployment rate–a 1.2 percent decrease.
  • From November 2018 to November 2019, Alabama was sixth among all states in increasing its labor force participation rate–a 1.2 percent increase.
  • Workforce development is an integral part of Governor Kay Ivey’s Success Plus initiative, launched in April of 2018 with the goal of adding 500,000 skilled employees with degrees, certificates, and credentials to the Alabama’s workforce by 2025.
  • Our workforce development program was recently selected by the National Governors Association to become a mentor state within its Policy Academy.

STARS: Alabama’s Original Alignment Program

When Sen. Jimmy Holley wrote the 1994 bill creating Alabama’s Statewide Transfer and Articulation Reporting System, transfer was from one 2-year college to one 4-year university. Today, transfer is a dynamic process that integrates and aligns advanced placement, dual enrollment, and CTE credits earned in high school ​prior​ to college entry.  Just a third of Auburn University and University of Alabama graduates in 2015-16 earned all their credits at these two universities. With half of all CTE credits at community colleges on Pell Grants, Pell can be considered a workforce training program. Nearly every high-wage, high skill job requires at least some credits beyond high school, which is why Alabama needs a better aligned systems across all P-22 education and our workforce training system to save students and families time, credits, and money. This is what the unsung hero of our state’s alignment efforts, the STARS program, does.

Change: The Magazine of Higher Learning: Volume 51 Issue 3 https://www.tandfonline.com/doi/full/10.1080/00091383.2019.1606607 

Lower Unemployment

Alabama had the largest percentage decline in its unemployment rate among all fifty states from November 2018 to November 2019.  Alabama’s decline of -1.2 percent was three times better than the national average of -0.4 percent. Our statewide unemployment rate of 2.7 percent rate was tenth lowest.   Chart 2 compares the unemployment rates of the state of Alabama and national average over four decades. Every county in Alabama saw improved unemployment rates in 2019 compared to 2018.

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Labor Force Participation Rates

Recent national publications have cited the diverging Alabama and Mississippi economies, which were “two peas in a pod” for nearly 150 years.  For decades, the two were roughly six to seven percentage points below national averages. Then, in 2017, Alabama’s labor force participation rate suddenly ticks up toward the national average, while Mississippi’s ticks down.

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Alabama’s investment explains why. Alabama’s labor force participation rate was 56.8 percent in April 2017 when Governor Ivey assumed office. It has improved by 1.8 percent in just two and a half years. If Alabama gets to the national average of 63.2 percent, 196,000 more Alabamians would be working. This is roughly 40 percent of Governor Ivey’s target of 500,000 new Alabamians by 2025. However, we note that other states are moving forward too, so Alabama cannot satisfy itself by being average. 

Moving Forward:  Progress and Prospects

Alabama’s Strong Start, Strong Finish program is comprehensive in sweep and scope that includes but is not limited to:

  • universal pre-K-12
  • expanding apprenticeships and school-to-work pathways
  • aligning education and workforce training programs
  • expanding broadband and
  • expanding STEM teacher pathways.

A statewide task force charged to create a pipeline of computer science teachers for Alabama schools was begun, and the first class of new computer science teachers graduated in 2019 (recent Praxis test results for the initial class are promising). Efforts to seamlessly integrate early childhood, K-12 education, and workforce development efforts, combined with new funding, appears to have accelerated Alabama’s progress in 2019 and 2020. Today Alabama is a top destination for new business locations, and Kay Ivey is among the ten most popular governors of any state

Alabama’s state-level investments build upon federal efforts led by Senator Richard Shelby in 2016 to make the Pell Grant program year-round.  This was accomplished on May 4, 2017 as President Donald Trump signed the Consolidated Appropriations Act of 2017, which created a summer Pell grant of about $3,000 per student. Since Alabama has the lowest state-student aid program of any southeast state, federal student aid undergirds our state’s alignment programs, as Chart 1 shows.

Today’s positive position is in part due to enactment a decade ago of the Rolling Reserve Fund, which sought to end the “boom and bust” education funding cycles. When combined with federal and state alignment efforts, Alabama is positions well. Today’s challenge is to better align our education and workforce programs with services such as transportation, childcare, food security, and housing.

Alabama has built positive momentum to give our current and future workers the 21st century skills needed to compete in the global economy.  K-12, community college, regional and flagship university, and independent non-profit education leaders are combining with our state’s workforce training system to create a seamless journey all the way through. Now, as the Alabama Legislature considers a lottery to fund universal pre-K and establish a statewide College Promise program, our future is limited only by our vision.  Alabama’s challenge is to match potential with possibilities for progress.

Stephen G. Katsinas is Director of the Education Policy Center at the University of Alabama and Professor of Higher Education and Political Science. Noel Keeney is a Research Associate at the EPC. Katsinas coordinated a visit by Alabama leaders, including State Superintendent Eric Mackey, Alabama Commissioner on Higher Education Jim Purcell, and ACCS officials to visit Knoxville to see the Tennessee Promise, in May 2019.

 

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Economy

NAALC to hold public union event in Madison

The event will allow a variety of labor union members and officials to meet and discuss pertinent issues and planning. 

Josh Moon

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(STOCK PHOTO)

The North Alabama Area Labor Council will hold a solidarity event on Saturday in Madison, with several area labor union members present to answer questions from the public. 

The event, which will start at 9 a.m. at the Steamfitters and Pipefitters Union Hall on Madison Blvd., also will allow a variety of labor union members and officials to meet and discuss pertinent issues and planning. 

According to a press release from the NAALC, a number of current representatives from area unions will be present, including members from the American Federation of Government Employees Local 1858, International Association of Machinists and Aerospace Workers (IAMAW) Local 44, IAMAW Local 2766, Ironworkers Local 477, International Alliance of Theatrical and Stagehand Employees Local 900, American Postal Workers Union Local 259 and the International Federation of Professional and Technical Employees Local 27.

The union reps plan to discuss basic issues with anyone interested, such as the basic benefits of union membership and how to form a union at your local workplace. 

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Economy

New unemployment claims decreased last week

Fewer people joined the unemployment rolls last week compared to the week before.

Micah Danney

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(STOCK PHOTO)

There were 7,964 new unemployment claims filed in Alabama last week, down from 8,581 filed the previous week, according to the Alabama Department of Labor. 

Of the claims filed between Oct. 11 and Oct. 17, there were 4,032 related to the COVID-19 pandemic. That’s 51 percent, compared to 36 percent the previous week.

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Economy

Governor announces auto supplier IAC plans Alabama expansion

IAC is committing $34.3 million in new capital investment to expand its new manufacturing facility located in Tuscaloosa County.

Brandon Moseley

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(STOCK PHOTO)

Gov. Kay Ivey announced Monday that International Automotive Components Group North America Inc. plans to invest over $55.9 million in expansion projects that will create 182 jobs at two Alabama facilities.

“International Automotive Components is a leading global auto supplier, and I am pleased that this world-class company is growing significantly in Alabama and creating good jobs in Cottondale and Anniston,” Ivey said. “IAC’s growth plans show that Alabama’s dynamic auto industry continues to expand despite today’s challenging environment.”

Nick Skwiat is the executive vice president and president of IAC North America.

“Alabama was the logical choice due to its skilled workforce and proximity to the customer,” Skwiat said. “We are excited to see the continued growth of the automotive industry in Alabama and we plan to grow right along with it. We thank the Governor and Secretary Canfield for their leadership in this sector.”

IAC is committing $34.3 million in new capital investment to expand its new manufacturing facility located in Tuscaloosa County. This facility will produce door panels and overhead systems for original equipment manufacturers. That project will create 119 jobs at the production site in Cottondale.

IAC also plans to invest $21.6 million at its manufacturing facility located in the former Fort McClellan in Anniston. That East Alabama project will create another 63 jobs.

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This project builds on a milestone 2014 expansion that doubled the size of the Calhoun County facility. There IAC manufactures automotive interior components and systems. Key components produced at the Anniston plant include door panels, trim systems and instrument panels for original equipment manufacturers.

IAC Group is a leading global supplier of innovative and sustainable instrument panels, consoles, door panels, overhead systems, bumper fascias and exterior ornamentation for original equipment manufacturers.

IAC is headquartered in Luxembourg and has more than 18,000 employees at 67 locations in 17 countries. The company operates manufacturing facilities in eight U.S. states.

“With operations around the globe, IAC is the kind of high-performance company that we want in Alabama’s auto supply chain to help fuel sustainable growth,” said Alabama Commerce Secretary Greg Canfield. “We look forward to working with IAC and facilitating its future growth in this strategic industrial sector.”

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Danielle Winningham is the executive director of the Tuscaloosa County Industrial Development Authority.

“International Automotive Components is a valued part of Tuscaloosa County’s automotive sector,” Winningham said. “We are grateful for IAC’s investment in our community and the career opportunities available to our area workforce as a result of their investment.”

“The City of Anniston is excited that IAC has made the decision to expand here. I have enjoyed working with the leadership at IAC, the Calhoun County EDC, and the state of Alabama to get this project finalized,” said Anniston Mayor Jack Draper. “This is even further evidence that Anniston is indeed open for business.”

Only Michigan has more automobile manufacturing jobs than the state of Alabama. Honda, Mercedes, Hyundai, Polaris, Toyota and soon Mazda all have major automobile assembly plants in the state of Alabama.

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Courts

Aderholt fully supports Barrett’s confirmation process

Confirmation hearings began last week and a vote on her confirmation is expected in the next week just days before the general election.

Brandon Moseley

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Congressman Robert Aderholt

Congressman Robert Aderholt, R-Alabama, updated his constituents on the confirmation process for Supreme Court nominee Amy Coney Barrett. Aderholt said, “I do support her fully and I know she will defend life, protect the Constitution, and uphold our freedoms.”

Confirmation hearings began last week and a vote on her confirmation is expected in the next week just days before the general election.

“Senate Democrats are not seriously questioning Judge Barrett on her credentials, instead they have decided to attack her character and her beliefs,” Aderholt said. “I am disappointed to see this unfold on the national stage, but I think Judge Barrett stood strong and did well during this first week of hearings.”

“While I do not have a vote in her confirmation process, I do support her fully and I know she will defend life, protect the Constitution, and uphold our freedoms when she is officially sworn in as an Associate Justice on the Supreme Court,” Aderholt said.

Barrett is a Notre Dame graduate, has served on the U.S. Seventh Court of Appeals and is a former clerk for the late Supreme Court Justice Antonin Scalia.

“I clerked for Justice Scalia more than 20 years ago, but the lessons I learned still resonate,” Barrett said. “His judicial philosophy is mine, too: A judge must apply the law as written. Judges are not policymakers, and they must be resolute in setting aside any policy views they might hold.”

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Barrett vowed to keep an open mind on any matter that comes before the court, though Democrats fear she is prepared to overturn Supreme Court precedent on abortion rights and the Affordable Care Act.

That the Republican controlled committee will recommend that Barrett be confirmed appears certain. A vote to confirm Barrett to the nation’s highest court by the full Senate could occur just days ahead of the Nov. 3 election.

President Donald Trump has been the president of the United States for less than four years but if Barrett is confirmed, then he will have selected one third of the U.S. Supreme Court. Barrett fills a place created by the death of the late Associate Justice Ruth Bader Ginsburg, who died in September.

Aderholt is in his 12th term representing Alabama’s 4th Congressional District. He faces Democratic nominee Rick Neighbors in the Nov. 3 general election.

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