Fitzgerald Washington: Alabama’s workforce continues to grow
We’re at the beginning of another year, and ready to see continued improvement in our economy. At the Alabama Department of Labor, we are busy wrapping up the facts and figures for 2016. There were many improvements last year, and I’d like to let people know about them. We ended the year with our wage and salary employment only 17,000 jobs away from reaching two million. I can’t emphasize how great this news is! The last time our economy supported two million jobs was back in 2007, before the recession, before tens of thousands of Alabamians were relying on unemployment compensation to help support their families, and before our unemployment levels reached record highs. A wage and salary employment level of two million is considered to be a benchmark employment figure. I’m hopeful that we’ll reach that milestone in 2017. As employers’ confidence was sustained and hiring rose, Alabamians continue to join the workforce. We ended 2016 with the largest workforce we’ve had in more than five years. Additionally, more people were working in December 2016 than at any time since April 2008. Employers are hiring, and workers are working. Those who don’t have jobs are looking for jobs, which tells us they believe there are jobs to be had. All of these are positive signs for our economy. Our manufacturing industry continues to lead our economy. In 2016, Alabama ranked third nation-wide in manufacturing employment growth (year over year December). These competitive, sought-after jobs carry wages of more than $20 an hour. As far as unemployment compensation goes, the amount we are paying in benefits and the number of people filing for those benefits are at seven year lows. Those who are receiving benefits are only doing so, on average, for around 14 weeks, which is significantly less than during the recession, when up to 99 weeks were available and some were using all of them. Last year, we paid out over $183 million in Work Opportunity Tax Credits, more than $71 million higher than in 2015. These are credits that employers can take advantage of when they hire certain individuals, such as the long-term unemployed and food stamp recipients, among others. These are dollars that are going right back into our economy to spur spending and encourage hiring. Job orders on the state’s free jobs database, joblink.alabama.gov, were at five year highs, with several months registering more than 30,000 orders! With all of these positives, we still realize that there is work to be done. Even though there are more people working now than in nearly a decade, there are still more than 130,000 Alabamians who are out of work. Our mission, just like that of Governor Robert Bentley, is to make sure that these citizens have the opportunity to get a job, to support their families, and to live a quality life. In order to meet these obligations, we’re setting a few goals: First, we’re aiming to keep 2017’s yearly average unemployment rate below the yearly average unemployment rate of 2016 (5.9%). In order to keep the unemployment rate low, it’s important that we maintain employment levels. This means working with the Governor, state agencies, economic development groups, and local governments in order to keep jobs in Alabama and recruit new ones. Since taking office in 2011, Governor Bentley’s administration recruited 92,000 jobs to the state. These cooperative agreements are beneficial to all involved. We’re also focusing our efforts to surpass economists’ estimates for job growth in 2017. In January of this year, economists predicted that Alabama will gain 18,700 jobs in 2017. We hope to surpass that number, as we have for the past three years. In 2016, the prediction was for growth of 29,450. For the period covering January 2016 to December 2016, jobs grew by 49,600, bypassing the predictions by 20,150! Again, as employers maintain their confidence in the economy and continue to hire, hopefully, this goal will be an easy one to meet. We want to increase awareness of free, valuable services available at our 49 Career Centers located throughout the state. Our Career Centers offer so many wonderful services for both jobseekers and employers. The best part is that they are offered at no charge! Nearly half a million Alabamians were served in 2016, and we hope to increase that number this year. Our regional job fairs, hosted in Montgomery, Dothan, and Birmingham last year, drew more than 12,000 jobseekers to speak with more than 400 employers. We’re bringing our job fairs to other regions of the state this year. Come out and see us! Find out more information about any of our services at labor.alabama.gov. ••• Fitzgerald Washington is the Secretary of the Alabama Department of Labor
Daniel Sutter: Working for a living
Americans have traditionally worked hard, logging longer work weeks and taking shorter vacations than Europeans. Yet two changes in the labor market suggest that our work ethic may be dissolving. The changes are ominous because working for a living is the core of our modern prosperity. The labor force participation rate provides insight on the labor market. A person participates in the labor market if they are employed, or if not employed and actively seeking work. Not everyone of working age wishes to work (e.g., retirees, full time students), so the definition must account for this. Labor force participation stood at 66% in January 2008 and fell to 63% during the Great Recession. Participation typically falls during recessions as some people who lose their jobs become discouraged and stop looking for work. They then temporarily drop out of the labor market. The unemployment rate is now below 5% and the number of persons employed has increased by 13 million, but the labor force participation rate has remained at 63%. Three percentage points might seem small, but this translates into 8 million persons not in the work force today, which equals the number of Americans currently unemployed. In addition, the work participation of men aged 25 to 54 has been declining for decades. In 1954, 98% of men in this age group were in the labor force, compared with 88% today. These are the years of peak earnings, when people should be paying off mortgages and saving for retirement. Economists do not really understand the causes of these labor force participation declines. The President’s Council of Economic Advisors (CEA) could not conclusively identify drivers of the male participation rate decline. The number of Americans on disability has increased sharply in the past 15 years, but the trend predates the rising tide of disability. Generous welfare programs may have diminished work incentives in the 1970s and 1980s, but 1996’s welfare reform significantly tightened eligibility for men. The participation decline may be related to high rates of incarceration; the CEA notes that almost 7% of males aged 25-54 in 2008 had been incarcerated at some point. Time behind bars dramatically impairs employment prospects. Factors which might drive the post-2008 labor force participation decline would only produce a gradual shift. For example, increased graduate school enrollment and more adult children living with their parents should only slowly adjust the rate. Perhaps the 2008 recession provoked the exit of many who were ready to permanently leave the labor force. Our economy must produce the goods and services for our high standard of living. A prosperous economy must reward production. The market economy does this through property rights and voluntary exchange. Goods are owned by the producers until sold. Work is the main source of income for most Americans. Because the division of labor today is so extensive, very few people produce something of value by themselves; we just make a small contribution. Nonetheless, the work is valuable enough to earn a living. This process works so well that today we take it for granted. But humans have been dirt poor throughout most of recorded history. A sustained increase in the average person’s standard of living only began around 1700 with the emergence of the market economy. People’s willingness to work for a living forms the bedrock of prosperity. Today we are wealthy enough to support people who do not contribute. This can be done through help from family and friends, or assistance can also come from government transfer programs. Much of this reflects our compassion, and we can afford this within limits. A market economy leaves people free to choose how much they wish to work, that is, to balance their standard of living and quality of life as they choose. A decline in labor force participation consequently is not necessarily bad. But a decline with few clear causes may indicate a dissipating work ethic. Our wealth may undermine the connection between work and consumption which makes prosperity possible. ••• Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.
Census data shows great strides for women, but much more left to do
In the past four decades, there has been a number of changes in American society and culture. However, for women in the U.S., some things have stayed much the same, according to Census Bureau data released in advance of National Women’s History Month. National Women’s History Month began in March 1857, when women from New York City factories staged a protest over working conditions. International Women’s Day, first observed in 1909, led to Congress establishing National Women’s History Week, commemorated the second week of March. By 1987, Congress expanded the week-long celebration to a month, celebrated in March. As for women in today’s workforce, numbers show significant gains, while others show much work left to do. By way of sheer numbers, women’s participation in the labor force has increased considerably, from 30.3 million in 1970 to 75.1 million females 16 and older who participated in the civilian labor force in 2013. Women made up 37.97 percent of the 1970 labor force, jumping to 47.4 percent of the civilian labor force in 2013. Particular occupations have also seen a sharp increase in women workers. Census data had shown little participation from women in 1970 as accountants, police officers, lawyers and judges, physicians and surgeons, and pharmacists. By 2006-2010, women made considerable gains in those fields – with particularly strong presence as accountants (60 percent). Of the STEM (science, technology, engineering, and math) fields, 63 percent of social scientists are women, the heaviest representation of women among all. Among other STEM fields, about 14 percent of engineers, 45 percent of mathematicians and statisticians and 47 percent of life scientists were women. On the other hand, growth in certain segments of the workforce has slowed for women. The largest gain in women’s workforce participation occurred between 1970 and 1980, followed by a slowdown. An increase of only 0.4 percentage points occurred in the period leading up to 2006-2010. Compare that growth rate to a peak of 4.3 percentage points in the 1970s. Several occupations are overwhelmingly female. For example, women make up 96.3 percent of dental assistants, 95.9 percent of secretaries and 91.2 percent of registered nurses. Those standings have changed the least in the past 40 years. In 1970, secretaries, bookkeepers, and elementary school teachers were primarily women. In 2006-2010, those women-led occupations were secretaries and administrative assistants, cashiers, and elementary and middle schoolteachers. One explanation is the sheer numbers of jobs available; there are more jobs out there for elementary and middle school teaching positions than (as an example) surgeons. In comparison, the leading jobs for men remain the same as back in 1970: miscellaneous managers, truck drivers, and production supervisors. Four decades later, it is truck drivers, various managers, and freight, stock, and material movers. Researchers say the increase in female participation in the workplace started with the economics of the 1970s, beginning when a single-income household could no longer support a middle-class lifestyle. Gender wage gap remained a major issue in 2014; the Census found that year-round, full-time female workers earned 78¢ in 2013 for every dollar their male counterparts earned. Those numbers are not statistically different from 2012. [Source: U.S. Census Bureau]
