Of those Alabamians formally in the workforce – i.e., they have a job or are looking for work – just 2.3% meet the government definition of being unemployed. Alabama Governor Kay Ivey announced Friday that the state had set a new all-time record low unemployment last month. Alabama’s preliminary seasonally adjusted March unemployment rate of just 2.3% is a new record low, down from February’s rate of 2.5%. It is also below March 2022’s rate of 2.5%.
Just 53,053 people in the state met the official definition of unemployed in March. This is down considerably from the 56,166 unemployed in February and the 58,074 counted as unemployed in March 2022. That is the lowest number of people counted as unemployed in state history.
“We’re almost a quarter into 2023, and we are already seeing record-breaking success when it comes to Alabama’s economy,” said Governor Ivey. “We have been enjoying a period of low unemployment, high wages, and high jobs count for some time now, and I believe that even greater economic achievements are on their way. We will not back down on our commitment to continue bringing quality, high-paying jobs to Alabama.”
Gov. Ivey has credited her administration’s aggressive recruiting of new industries to the state by offering economic incentives. On Thursday, Gov. Ivey doubled down on this strategy by signing legislation extending the Alabama Jobs Act, the Growing Alabama Jobs Act, and adding additional incentives to the state economic planner toolbox.
“I am proud the Alabama Legislature has officially passed all four bills in The Game Plan package – my plan for our state’s continued economic success,” Ivey said in a statement. “I commend both the Senate and House for their incredible work on this timely legislation that will, no doubt, be transformative for our state and, more importantly, for our families. We are creating stability for our economy and are going to keep Alabama winning for many years to come.”
The state experienced growth of 54,100 jobs in the past 12 months, with the most significant gains occurring in the manufacturing sector (+10,400), the professional and business services sector (+8,700), and the private education and health services sector (+7,500), among others.
Extremely low unemployment and a growing economy pressures employers to pay more wages to recruit and retain workers. Classical economists cite full employment as being between 4 and 5%. At that level, most competent people can find a job, and employers are not under pressure to bid up the cost of labor to get workers leading to inflation across the economy.
“Additionally, we’re continuing to see positive increases in our wages, meaning more money in Alabamians’ pockets,” said Alabama Department of Labor Secretary Fitzgerald Washington. “This month, we reached one of our highest average weekly wages in history.”
Total private wages increased by $30.12/weekly over the year to $1,008.61 in January, marking the third-highest weekly wages in state history.
The counties with the lowest unemployment rates are Shelby County at 1.8%, Morgan County at 2.0%, and Marshall, Madison, Limestone, and Cullman Counties at 2.1%.
The counties with the highest unemployment rates are Wilcox County at 8.8%, Clarke County at 5.9%, and Dallas County at 5.4%.
The major cities with the lowest unemployment rates are Homewood at 1.6%, Madison at 1.7%, and Alabaster, Trussville, and Vestavia Hills at 1.8%.
The major cities with the highest unemployment rates are Selma at 6.4%, Prichard at 5.2%, and Bessemer at 4.2%.
The size of the workforce in March increased to 2,289,759 persons. That is up from 2,287,334 in February and up from 2,286,491 in March of 2022.
There were some negatives in the report, though. Even though wages have risen, Alabama’s labor force participation rate has dropped over the last 12 months. The seasonally adjusted labor force participation rate of Alabamians 16 years old and older in March was just 56.7%. That is unchanged from February and down from 57.1% just 12 months ago.
The state’s 2.3% unemployment rate is well below the national average of 3.5%, but the state’s labor force participation rate of 56.7% trails the national average of 62.6%. How to lure more able-bodied but not working Alabamians off the sidelines and back into the workforce has perplexed employers and state leaders alike.
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