Workforce expert lends insight into Alabama’s low unemployment numbers, worker shortage

Alabama’s unemployment numbers are below the national average at less than 4%, but many business owners are struggling to fill their staffing needs due to a workforce shortage. Matt Ulmer, Community Workforce, Leadership & Economic Development specialist for the Alabama Cooperative Extension System at Auburn University, weighs in on the issue and gives insight into how the situation may play out through the summer and remainder of 2021.

What are the state’s current unemployment numbers, and how do they compare with the past few years?

The Alabama Department of Labor Current Civilian Labor Force data is a great resource for this info. Their most current numbers from March suggest our unemployment rate was at 3.8%, while the U.S. at large was at 6%, so we’re trending better than the national average. Looking back to February—after numbers have been calibrated further—Alabama’s revised unemployment rate was actually closer to 2.6% and the U.S. closer to 3.5%.

Comparatively, in March of 2016, our unemployment rate was 6%, March 2017 was 5.1%, March 2018 was 4%, March 2019 was 3.3%, and March 2020 was 2.6%. Interestingly, after the pandemic shelter in place orders went into effect and certain business types were closed, the 2020 Alabama unemployment rate rose to 13.2% in April, dropped to 7.9% in May, and gradually fell to 4.7% in October.

While the state’s unemployment numbers are low heading into the summer, many business owners are in dire need of employees. Why is there such a workforce shortage if unemployment is low?

The availability of skilled, dependable labor is the number one issue in economic development. This issue is not necessarily a new one, but it’s been brought to the forefront more visibly given the social and economic impacts of the pandemic. Alabama needs to continually cultivate skilled workers and attract talent from other places if we want to encourage our existing employers to expand and to increase our attractiveness to employers looking to locate business operations in Alabama. Our leaders in the Department of Commerce, K-12 and the community college system have done excellent work in this space, but we still need more folks willing to get training and build their careers in Alabama. With Alabama’s unemployment rate under 4%, those who are looking for jobs may have plenty of employment opportunities to explore depending on where they are and the skills and experience they possess.

Do you think Alabama’s low unemployment number is an accurate reflection of the reality, or is it low because people are not taking unemployment benefits because they are living off the trio of federal COVID-19 stimulus payments?

It likely is a reflection of reality, given the consistent documented need for skilled workers across Alabama’s industry sectors even before the pandemic arrived and given the fact that we’ve shown our economy’s demand for workers has gotten our unemployed to these low rates previously. More research needs to be done to show what impacts the stimulus payments and unemployment benefits have made on keeping folks out of the workforce.

Traditionally, the biggest barriers to keeping folks out of the workforce include access to reliable transportation and childcare availability. The pandemic has increasingly caused everyone to place a greater focus on the health and well-being of themselves and those around them when considering whether they should return to work or allow their children to return to in-person instruction.

What do you think the summer will bring, as far as sourcing the workforce and the state’s unemployment numbers?

Gov. Ivey’s decision to suspend the expanded unemployment benefits effective June 19, coupled with the highly accessible vaccine and decreases in case/death rates related to COVID-19, will likely increase workforce participation. With our adjusted unemployment rate for February under 2.6%, employers may not see a significant influx of new workers entering the workforce—at least not all at once. It may take time for those wanting to work to get things like reliable childcare and consistent transportation arranged, or become fully vaccinated, before transitioning back to work.

Leaders within local government, nonprofit and business communities can take steps to help lower barriers for those interested in going back to work by highlighting space availability at area daycares, promoting transportation options capable of getting people to work, promoting local vaccine clinic information broadly and hosting job and resource fairs to help connect prospective employees to employers.