Alabama leaders and policymakers are stressing about one big issue going into the 2024 legislative session: labor force participation.
Alabama’s labor force participation rate is among the nation’s lowest. Only 57% of working-age adults reported they were actively working or looking for jobs as of September 2023. We also have a severe worker shortage, with nearly 100,000 more job openings than workers available to fill them.
This situation gives Alabama workers increased power to negotiate better wages, benefits and working conditions. It also leaves state leaders and employers scratching their heads. Aren’t we supposed to be among the most “business-friendly” states in the country? How can we attract and retain industry if businesses can’t hire workers? And why aren’t more people applying for openings as the cost of living continues to increase?
Consistent barriers to workforce participation
If you want to know why people are leaving the workforce, you need to ask them. Thankfully, we have data to understand what is happening.
Workers who are underemployed or dropped out of the workforce cited three major, consistent concerns, according to multiple recent surveys from the Governor’s Office of Education and Workforce Transformation:
- No transportation.
- Inadequate pay or work schedule. (Workers are looking for full-time work or higher pay.)
- Illness or disability prevented them from working. (Indeed, disability is one of the main driving forces in Alabama’s extremely low workforce participation rates.)
One would hope we would see more of this data informing the conversation about the workforce. But unfortunately, it appears many lawmakers still haven’t seen the data.
Alabama Arise worker policy advocate Dev Wakeley participated in a recent discussion with lawmakers about barriers to workforce entry. He shared Arise’s policy prescription to address this issue, based on clear and direct feedback we’ve heard from workers.
1. Fund the Public Transportation Trust Fund to help workers get to jobs.
Alabama is one of only three states that has no state funding set aside to support public transportation. The Bipartisan Infrastructure Law of 2021 made massive federal boosts in public transit money available across the country. But with no local or state resources to match, cities and counties across Alabama cannot harness those federal matching funds.
Multiple survey groups cited transit access as their top barrier. It’s time for Alabama to join the rest of our Southeastern neighbors by boosting public transportation investments.
2. Stop incentivizing employers who fail to deliver on promises to provide good-paying jobs.
Alabama lawmakers passed “The Game Plan” earlier this year to renew several key economic incentive packages for large employers. Legislators also strengthened some reporting requirements via the Enhancing Transparency Act. These enhancements were critical, as Alabama still ranks among the least transparent states when it comes to economic incentives and tax expenditures.
We applaud efforts to hold businesses accountable for the promises they make when applying for these major tax breaks. But lawmakers must do more to enforce accountability and ensure the investment is paying off. While our state defers millions of dollars in tax revenue for vague incentives with unclear deliverables, many workers are still struggling to access the promised jobs because we have failed to invest in the necessary state infrastructure. And too often, the jobs simply don’t measure up to the promised wages and hiring goals.
3. Expand Medicaid to keep working-age adults healthy and in the workforce.
Investing in Alabama’s health care infrastructure is not just an avenue to create more health care jobs. It’s also a way to keep workers healthy and in the workforce.
Nearly 300,000 working Alabamians fall into the health coverage gap. Many are employed in high-demand but low-paying industries including service, retail, personal care or construction jobs. Consistent health care for low-wage workers can help prevent or control chronic disabling conditions. It also can give workers a lifeline when they are struggling with addiction, substance use disorders or mental illness.
Workers ideally would find good-paying jobs that provide flexible and inclusive family benefits. But they also should retain access to health coverage if they have to take a break from work to handle caregiving duties, manage a health or family crisis, go back to school or start their own business.
Temporarily losing a job with health coverage should not spiral further into permanent, preventable disability or untreated illness. Medicaid expansion would ensure many Alabamians still can get the health care they need during difficult times.
A prescription for a stronger workforce
We applaud House Speaker Nathaniel Ledbetter and the House Commission on Labor Shortage for expressing an interest in looking more deeply into the data around labor force participation. We were also glad to hear multiple lawmakers cite issues including affordable housing, wages and child care. All of these are critical supports to empower people to obtain and maintain employment.
To us, the message is clear: Investing more in work supports like public transportation and health care while ensuring more transparency and accountability for workforce incentives is a key, data-supported strategy to keep more Alabamians working and thriving.