It’s Labor Day weekend. The days are ever so slightly cooler. Football season has started. And Alabama’s economy is officially “open for business.” So why are so many jobs still going unfilled in our state? Why are employers looking for workers and not finding them?
A look at some very interesting data can provide a few answers.
Unemployment vs labor force
Alabama’s unemployment rate is one of the lowest in the nation, a very impressive 3.2% in July. But another number doesn’t get as much attention as the unemployment rate: the labor force participation rate. Labor force participation is the number of people who are either working or looking for work divided by the total number of working-age, non-institutionalized people in the state.
Alabama’s labor force participation rate is one of the nation’s lowest. That means many people here are neither working nor looking for work. And that low number may tell us about why a lot of available jobs are not being filled.
In 2008, Alabama’s labor force participation rate was 60.6%. That means 60.6% of potential workers were either employed or looking for employment. By July 2021, our labor force participation rate had declined to 48th nationally at 56.7%. Alabama is also 44th nationally in the share of our adult population who are employed ‒ only slightly under 55%.
Barriers to work
We all know how hard-working the people of Alabama are. We pride ourselves on our work ethic, independence and resilience. But many Alabamians face significant barriers to employment that the pandemic has exacerbated. And those structural barriers have left many jobs unfilled while potential employees are unable to work.
One important explanation revolves around child care. In the recent study, “Where Are They Now? Workers with Young Children during COVID-19,” M. Melinda Pitts of the Federal Reserve Bank of Atlanta found that the workforce exits of women with children under age 13 accounted for much of the decline in employment. And she attributed much of this decline to the unavailability of quality child care during the pandemic and continued unwillingness to use child care services with the virus still raging. Even with schools and child care centers reopening, Pitts concluded, the continued risk of COVID-19, low vaccination rates and uncertainty about school closures would continue to depress employment rates among women with young children.
Every couple of weeks during the pandemic, the U.S. Census Bureau has conducted a survey in every state called the Household Pulse Survey. This survey asks a sample of people about how the pandemic has affected their lives, from food security to employment and income. The most recent results from Alabama, for the weeks of Aug. 4-16, provide meaningful insight into why Alabamians may not be taking advantage of the supposedly booming job market. (Arise calculated the following percentages based on survey results.)
- Despite the low unemployment rate, many Alabamians, especially women, are not yet employed. Among Alabama women who responded to the survey, 47% were not employed in the seven days preceding the survey, compared to slightly more than 37% of men who were not working.
- When asked why they were not working, nearly 12% of Alabamians who are not retired and do not have a disability said they were caring for children not in school or day care. Another 5% said they were caring for an older adult.
- About 5% of Alabama respondents who are not retired and don’t have a disability said they weren’t working because they were afraid of getting COVID-19.
- More than 11% of Alabamians who are not retired and don’t have a disability said they had lost their job because of the pandemic.
- About 4% of Alabama respondents who are not retired and don’t have a disability said they weren’t working because they didn’t have transportation to work.
- The Household Pulse Survey doesn’t break out non-employment rates for men and women by race. But it does show non-employment rates are higher in general for Black people (nearly 49%) and Hispanic/Latinx people (46%) than for white people (40%). Whether because of COVID-19’s impacts or employment barriers or both, people of color are disproportionately affected. This is consistent with research by the Economic Policy Institute which found that Black Alabamians had a 2021 unemployment rate 40% higher than did White Alabamians.
Alabama businesses are desperately looking for workers, and Alabamians want to return to work. But for this to happen, our leadership needs to support workers instead of blaming essential income supports or the workers themselves for vacant jobs. What should elected officials do?
Many of the jobs that remain unfilled are in the service sector. These are the public-facing jobs filled by people we hailed as “essential workers” last year. People essential to our recovery from the pandemic and its recession need a living wage. They also need employment supports like health insurance, paid time off and protections from potential coronavirus infection so they can return to work and still take care of their children and families.
Congress has appropriated significant funds to support child care centers and the parents who need them. And the Department of Human Resources has done a good job of targeting money where it most needs to go. But the number of respondents listing child care or senior care as the reason they are not able to work indicates even more needs to be done. Alabama should redouble its efforts to ensure safe, affordable child care and senior care are available when people need to work, including evenings and weekends.
Alabama lacks public transportation in all but our biggest cities. Even there, transit is limited and often doesn’t get people to the jobs available to them. If Congress approves new infrastructure funds, Alabama should invest heavily in public transportation in both urban and rural counties. These investments would help residents get to work, school, the doctor’s office and other essential locations.
Unemployment insurance benefits
More than 11% of Alabama Household Pulse respondents say they have lost jobs due to the pandemic. That may result from their employer laying them off, going out of business or closing temporarily. People unemployed because of the pandemic continue to need unemployment income (UI) benefits. Alabama’s unemployment compensation system unfortunately has failed to respond adequately either during the recession’s height or our slow recovery. The decision to reduce UI benefits in an effort to force workers back into jobs has only increased suffering without filling the vacant jobs. Alabama needs to invest in a robust unemployment compensation infrastructure. The state also needs to bolster benefits for laid-off workers still suffering the pandemic’s effects.
Nearly 9% of all the people who responded to the Household Pulse Survey in early August said they were not working because of disability or health problems. Adequate, accessible and affordable health care services can help people address health problems that make work difficult or impossible. Alabama must expand Medicaid to provide these health services if we want to jump-start our economy fully.
The Alabama Department of Labor should return to its former practice of releasing unemployment data via news releases. Months after cutting off the $300 federal supplement, UI claims remain at 297% of pre-pandemic claim numbers. This data shows that, contrary to the false narrative pushed by some officials, pandemic unemployment has never been a result of the increased benefits available through federal assistance. The state should return to publicly acknowledging the data that lays out recent policy mistakes and the number of Alabamians harmed by anti-worker decisions.
Finally, 5% of Household Pulse respondents who are not retired and do not have a disability said they had not reentered the workforce because of very realistic fears of COVID-19. Alabama and the nation need to ensure our investments in public health interventions and COVID-19 mitigation are science-based and effective. That includes efforts to address vaccine hesitancy and misinformation in Alabama.