Jobless rate hits Alabama hard
Published 9:29 pm Monday, March 30, 2009
With each passing month the economy seems to slip deeper into trouble. We look for signs that hopefully the bottom has arrived, the worst has come, and that we are taking the first steps back to recovery. What we see are more banks failing, companies teetering on the brink of disaster, and the biggest concern of working families, unemployment, continuing to grow.
For many of us in the state it feels as if we had been whistling past the graveyard.
While the rest of the country sees home values plummeting, Alabama’s prices have remained steady. Four of the top ten cities in the country where home prices have gone up are right here in Alabama.
While plant closings and going out of business stories became commonplace, they were often offset in Alabama by other positive economic news, like the $300 million expansion by Mercedes in Vance, or the continued progress at the $2 billion ThyssenKrupp plant at Mobile.
Bucking national trends, personal income grew more in Alabama than in the nation as a whole last year. Per-capita personal income in Alabama grew by 3.8 percent, as our state was one of a handful where family income rose faster than inflation.
And most importantly, for months our unemployment rate also was much lower than the national average. Now, it would seem that our luck has begun to slip.
Alabama for the first time in many years now exceeds the national average for unemployment. Our state’s February unemployment rate of 8.4 percent surpassed the national average of 8.1 percent, and is now at its highest point since January 1987.
The recent sharp increase in job losses surprised many state economists. 76,000 jobs were lost from February 2008 to February 2009, but most of them occurred in just the last four months. And the losses are now
coming from all sectors of the economy, not just manufacturing.
We are doing better than our neighboring states, with Florida at 9.4 percent, Georgia at 9.3 percent, and Mississippi and Tennessee, both at 9.1 percent. But that is cold comfort to a breadwinner who lost their job and can’t find another.
That is why the continued rumblings in the governor’s office that he may reject $100 million in federal unemployment assistance have many in disbelief. If he makes this error, then it will be up to the Legislature to do what is necessary to bring that assistance to the families who truly need it.
The $100 million unemployment assistance comes from the American Recovery and Reinvestment Act of 2009, which most of us know it as the recently passed stimulus bill. These are funds that not only would help families that have lost a job through no fault of their own, but would be a direct shot in the arm to the state’s ailing economy.
The governor is willing to reject this money because he believes in five years it may make an increase in unemployment contributions for some businesses.
That is right, during the worst economic time in decades the governor is worried about five years from now, when hopefully, unemployment will not be a problem. The governor should tell his worries to the single mom who just lost her job at the factory. Tell that to the dad who was laid-off and can’t find another job in his field.
The fact is Alabama has some of the lowest taxes in the nation for business. We have some of the lowest unemployment costs as well, mainly because compensation is some of the lowest. In order to draw down that $100 million we need to make adjustments like modernizing the state’s bureaucracy and provide things like an extra $15 a week if the unemployed have children.
And if it turns out in five years rates on business would need to be raised because of the adjustments, we can change the program back to where it was. Yet the governor’s supposed concern about five years down the road may lead him to reject $100 million going to unemployed families. It is unconscionable.
Now is not the time for politics, hard line ideology or partisanship. Families are hurting, we are shedding jobs at a rate not seen since the early 1980s, and every dollar we can put into the state’s economy is critical.
Unemployment is getting worse. People need help. There is a lifeline available. We must do the right thing and make sure Alabama families have some help in these troubled times.