At 2.8% unemployment, state says there are more workers to train for new, better jobs

At 2.8% unemployment, state says there are more workers to train for new, better jobs

By MARY SELL, Alabama Daily News

Alabama retailers have two of their busiest days of the year this week, Black Friday and Small Business Saturday, and they’ve been looking for new employees.

Listings for retails salespeople, registered nurses and customer service representatives topped the online wanted ads in Alabama in October, with a total of 6,662 ads placed, according to the Alabama Department of Labor.

“Finding qualified applicants is their No. 1 issue,” said Nancy King Dennis, spokeswoman for the Alabama Retail Association.

Alabama’s unemployment rate hit another record all-time low in October at 2.8 percent. The state is tied with Colorado for the largest year-over-year decline of 1 percent. 

But state officials say there are still hundreds of thousands of unemployed and underemployed Alabamians who, with some training, can fill more jobs.

“Some people think Alabama has reached a level of ‘full employment,’ but that is not the case,” Alabama Secretary of Commerce Greg Canfield told Alabama Daily News. “This is our opportunity to get granular and deploy a strategy focused on the 500,000 or so underemployed and the 63,000 Alabamians who remain unemployed.”

Alabama Labor Secretary Fitzgerald Washington said there are still Alabamians who want jobs. Thousands of them turn out for the job fairs his department holds around the state.

“We know there are individuals who are still looking for work, and those who are underemployed,” Washington said. 

Underemployment means people are working less than full-time or in jobs that are inadequate to their training or economic needs.

“… We have to make sure we clear a pathway for them to jobs we know exist,” Washington said.

By the numbers

In October, 8,941 initial claims for unemployment benefits were filed by the recently unemployed, according to Labor. That’s down from 10,580 in October 2018. And last month, a total of 14,057 people received unemployment benefits, down from 15,228 in October 2018. People receiving unemployment must be available for and looking for work.

Minimum wage in Alabama is $7.25 an hour, and retail salespeople earn an average wage of $13.52 per hour, according to Labor.

“Even temporary workers, (retailers) have to pay a competitive wage to get those employees,” Dennis said.” “No one is paying (minimum wage).”

Sustained low unemployment can sometimes lead to wage inflation. In many businesses, retail included, wages for employees are the largest portion built into the price of products. When demand for workers increases while unemployment is falling, employers are forced to increase wages to attract workers, sometimes causing a drop in productivity.

Ahmad Ijaz, executive director and director of economic forecasting at the University of Alabama’s Center for Business and Economic Research, said so far, there aren’t signs of inflationary pressures.

“I think there is still some slack in the labor markets, considering we still have 63,333 people unemployed and the underemployment rate of around 22 to 23 percent,” Ijaz said.

During the past 12 months, average weekly earnings increased by 3.2 percent to $862.76, but Ijaz points out that Alabama’s manufacturing sector wages fell by 1.1 percent. 

“But we are getting close to a point where wage pressures could begin to pick up,” Ijaz said. “At some point, if the economy continues to grow at its current pace, we may start seeing upward pressure on wages in the near future, although no one is actually anticipating inflation level going up, currently the forecast for consumer prices only calls for a 1.5 percent increase in 2020 and wage cost index going up by 3.2 percent.”

A lofty goal

Gov. Kay Ivey has set a goal of adding 500,000 credentialed workers to the workforce by 2025, which if accomplished would bring the level of work-age Alabamians with post high school training or degrees from about 43 percent in 2016 to 60 percent.

Fitzgerald said veterans, people with disability and people recently in jail or prison are pools of potential workers.

Canfield said the state is focusing on underserved populations, rural workforce development and training and employment of veterans.

“And we are learning of opportunities to have real financial impact in our population of single mothers who, upon removal of childcare and transportation barriers, could enter the workforce, according to a recent study performed for the Women’s Fund,” Canfield said. “Fortunately, we have already been taking steps to help employers fill their worker pipelines through expanded job training and apprenticeship programs.”

The highest unemployment in the state is currently Wilcox County, at 6.3%. Four years ago, it was 16% and at the height of the recession, it was 30 percent, Washington said.

“We’ve been very strategic in our job fairs, specifically in rural areas,” Washington said.

To reach more potential workers, Washington said multiple state agencies, local communities and economic development groups will have to work together to connect potential employees to jobs.