Alabama’s growing income gap is bad for its economy, report concludes

The widening income gap between the richest Alabamians and everyone else is reducing consumer spending and hurting the state’s economy, according to a new ACPP report released today as part of The State of Working Alabama 2014. Alabama is among the top half of states for the severity of its income inequality, and its income gap is increasing at one of the highest rates in the nation.

“People whose hard work and talent make our lives better deserve to be rewarded for their efforts,” ACPP executive director Kimble Forrister said. “But when income inequality becomes extreme, it hurts the economy and endangers our future.”

Key findings from the report include:

  • Between 1979 and 2007, the top 1 percent of Alabamians saw income growth of 158.8 percent, while the incomes of everyone else grew on average by only 20.5 percent.
  • Between 2009 and 2011, all income growth in Alabama accrued to the richest 1 percent of the state’s population.
  • Between 2008 and 2012, the top fifth of Alabamians held more than half of the state’s total income, and the top 5 percent alone held 21.4 percent.

In 22 Alabama counties, the share of income held by the top 5 percent exceeded the state average. In six of those – Clarke, Conecuh, Jefferson, Lamar, Lowndes and Randolph – that share topped 24 percent.

Numerous state policies could reduce the worst effects of Alabama’s growing income inequality, Forrister said. Ending the state sales tax on groceries and replacing the revenue responsibly would help families make their paychecks go further, he said, as would closing the health coverage gap by expanding Medicaid to cover nearly 185,000 uninsured Alabama workers.

“Alabama should adopt policies that help everyone share in the benefits of economic growth,” Forrister said. “By investing now in education, transportation, affordable housing and other vital infrastructure, Alabama can pave the way for broadly shared prosperity for decades to come.”

The State of Working Alabama 2014: The growing divide: Alabama’s income gap is approaching Gilded Age levels

When the income gap between the rich and everyone else gets too large, the resulting inequality can threaten America’s foundations of fairness, equality and opportunity. Income inequality is deep in Alabama, and it has been getting even deeper in recent decades. Between 1979 and 2007, the top 1 percent of Alabamians saw their incomes grow by nearly 159 percent. But for everyone else in the state, the average income growth in that time was just 20.5 percent.

Policy analyst Carol Gundlach’s new report, part of ACPP’s State of Working Alabama 2014series, examines the growing income gap between the richest Alabamians and everyone else and considers the gap’s implications for the state’s economy and our children’s future. The report also considers how Medicaid expansion, investments in education and infrastructure, and other public policies could mitigate the worst effects of income inequality and promote broadly shared prosperity for all Alabamians.

Many Alabama Workers Have Little to Celebrate This Labor Day

This Labor Day will be a difficult one for many Alabama workers, according to a new ACPP report released today as part of The State of Working Alabama 2014. Unemployment remains high. Jobs have disappeared. Wages are stagnant. The wealth gap between the rich and everyone else has grown.

And trends in unemployment, job loss, wages and income inequality all suggest that the state will continue to feel the Great Recession’s effects for years to come.

Among the report’s key findings:

  • Alabama’s unemployment rate remained among the nation’s highest at 7 percent in July 2014. Alabama is the only state whose unemployment rate is higher than it was in July 2013.
  • Alabama has lost 5 percent of its non-farm jobs since 2007, more than 16 times worse than the national job loss rate of 0.3 percent. The losses have been particularly severe among construction jobs. Job losses from 2007 to 2011 topped 20 percent in some rural counties.
  • Wages are stagnant. Alabama workers have seen a real wage increase of only 4 percent in the last decade, adjusted for inflation.
  • Wage stagnation has fueled a dramatic increase in income inequality in Alabama, measured by the income gap between the very rich and the rest of the population. Between 2009 and 2011, the income of the richest 1 percent in Alabama increased by 4.3 percent while the average incomes of the rest fell by 2.9 percent. Alabama is in the top half of all states for income inequality, and its rate of increased inequality is one of the nation’s highest.

The report reveals, in stark terms, the systemic challenges that Alabama’s workers face as they strive to climb the economic ladder, ACPP executive director Kimble Forrister said. But he said the state can act now to reduce those barriers and to build a stronger foundation for future growth. “Investing in Alabama today will make it easier for more of our people to achieve the American dream tomorrow,” Forrister said. “Our leaders can and should create more high-paying jobs by expanding Medicaid, investing in infrastructure and supporting workers still struggling to recover from the recession.”

The State of Working Alabama 2014: On Labor Day, Alabama workers face high unemployment

Many Alabama workers may find little reason to celebrate as we approach this Labor Day. The Great Recession is officially over, but the average Alabama worker has not yet recovered from it, as employment and jobs continue to lag behind and wages remain stagnant.

Policy analyst Carol Gundlach’s new report, part of ACPP’s State of Working Alabama 2014 series, examines the difficult employment, job and wage trends that working Alabamians face, as well as the growing income inequality between the top 1 percent and the rest of the population. The report also considers how Medicaid expansion, investments in infrastructure, an end to the state sales tax on groceries and other policies could help boost job growth, reduce unemployment and support Alabama workers.

ACPP Report: Alabama Workers to Feel Recession’s Fallout for Years

Many of the pathways Alabamians traditionally have used to get ahead have become more difficult to travel in the wake of the Great Recession, according to The State of Working Alabama 2011, a new Arise Citizens’ Policy Project report released today. Falling median household income, stagnating wages and soaring college costs have made it tougher to climb the economic ladder through hard work or education, the report finds.

ACPP executive director Kimble Forrister said the report reveals, in stark terms, many economic and systemic challenges that Alabama’s workers face in their efforts to create better lives. But he said the state can act now to reduce many of those barriers and to build a stronger foundation for future growth.

“Investing in Alabama today will make it easier for more of our people to achieve the American dream tomorrow,” Forrister said. “Education, health care and other public structures are the backbone of a strong economy, and our state must strengthen them to stay competitive in a fast-paced economy.”

A slightly lower unemployment rate was one of the few pieces of good news for Alabama in 2010, a year that left the state with higher poverty, more uninsured residents and lower median household income. The recession’s lingering effects hit especially hard among young Alabamians: One in four children lived in poverty in 2009-10, and nearly a quarter of Alabamians between the ages of 16 and 24 were unemployed.

Low- and middle-income workers face other challenges while trying to get ahead in Alabama, the report finds. The median cost of undergraduate tuition and fees at the state’s public four-year universities has nearly doubled since 2000-01, and partly as a result, the share of Alabamians with a four-year degree is falling further behind the national average. Alabama’s tax system also continues to require low- and middle-income residents to pay twice the share of their incomes in state and local taxes that the highest earners pay.

ACPP publishes The State of Working Alabama annually. The report uses data from the U.S. Census Bureau and other state and national sources to examine the economic condition of the state’s working families in 2011 along with historical trends.

The State of Working Alabama 2011

Well after the nation’s official recovery from the Great Recession began, Alabama continued to feel the downturn’s lingering effects in 2010: lower median household incomes, more poverty and more residents without health insurance. Unemployment has fallen from its 2009 peak, but the state’s jobless rate remains above the national average. Higher poverty, fueled by lower incomes and stubbornly high unemployment, hit the state’s youngest residents especially hard, with one in four Alabama children living below the poverty line in 2009-10.

Hands on: Alabama’s adult workforce development

As Alabama recovers from a recession that undercut a wave of record economic growth and employment, workforce development policymakers face a two-fold challenge: getting thousands of Alabamians back to work and gearing up the broader workforce for systemic changes in the economy.

This fact sheet offers an overview of skills training programs and related components of Alabama’s complicated workforce development system.

Same work, less pay: The wage gap in Alabama

Imagine the uproar if football officials suddenly were to declare touchdowns worth six points for one team but only five points for the other. Many workers both in Alabama and nationwide encounter just that sort of shortfall with every paycheck they receive. Despite decades of steady improvement, sizable earnings gaps remain between women and men and between racial minorities and non-minorities, both in Alabama and nationwide.

This fact sheet examines the history of wage discrimination, the scope of today’s disparities and how an Equal Pay Commission could help Alabama close the gap.

ACPP Report: Recession Over, but Struggles Remain for Alabama Workers

Alabama’s unemployment rate doubled between 2008 and 2009, leading to more poverty, more uninsured residents and more economic insecurity for workers weathering the Great Recession, according to The State of Working Alabama 2010, a new Arise Citizens’ Policy Project report released today.

Unemployment growth was swift and intense in Alabama last year, the report finds, with almost a third of the state’s jobless workers unemployed for more than six months. Along with many of the job losses came a loss of employer-provided health insurance benefits. As a result, demand for public insurance programs like Medicaid and ALL Kids exploded. The report credits federal stimulus money for keeping unemployment from climbing higher and for helping Alabama’s public services meet growing needs amid declining revenues.

The Great Recession officially ended in mid-2009, but its effects may linger in Alabama for years, the report finds. Unemployment is falling, but forecasts say it will remain high in 2011 as the nation’s economy grows too slowly to reduce joblessness significantly. Alabama’s median household income is lower than it was in 2000-01, and rising college tuition costs and a regressive tax system continue to pose problems as low- and middle-income workers try to get ahead, the report finds. The state’s poverty rate is higher than it was a decade ago, especially for its youngest residents: Almost one in four Alabama children lived in poverty in 2008-09, and more than half lived in families making less than 200 percent of the federal poverty threshold.

ACPP executive director Kimble Forrister said the report illustrates the many difficulties that Alabama’s new leaders will face next year. But he said the state can act now to lay the groundwork for a brighter future.

“We should be careful to maintain adequate funding for education, health care and other vital public services next year,” Forrister said. “Our state has taken a balanced approach of both spending cuts and new revenues in past recessions, and we should do so again as we emerge from this one. Investing in Alabama today will lead to more opportunities and better-paying jobs tomorrow.”

ACPP publishes The State of Working Alabama annually. The report uses data from the U.S. Census Bureau and other state and national sources to examine the economic condition of the state’s working families in 2010 along with historical trends. The complete report is available online at www.arisecitizens.org.

The State of Working Alabama 2010

Like this summer’s BP oil disaster, the Great Recession started for many Alabamians as something far away and impersonal. Then the disaster hit Alabama, and it hit hard. The resulting devastation was far-reaching, with scars that could last for decades even as things begin to return to normal.