“As we begin a new year, I hope that this great recession is nearing its end and will allow our nation’s and our state’s economy to begin to repair itself,” Tom Surtees, the director for the Alabama Department of Industrial Relations, said after recently releasing the latest state unemployment figures. “As that happens, I would like to remind everyone that the unemployment rate is a lagging indicator of economic recovery.”
UNEMPLOYMENT RATES
The Alabama Department of Industrial Relations announced the unemployment rate reached 11.1 percent in January, up from December’s revised rate of 10.9 percent.
Tara Hutchison, public information officer for the Alabama Department of Industrial Relations, said economists expect the unemployment rate to peak sometime this year.
She said the unemployment rate is highest in south Alabama counties.
“The highest (unemployment) rate is in the Black Belt and historically it always has the highest rates,” Hutchinson said.
But unemployment rates can be misleading.
Hutchinson pointed to Wilcox County, which has a 27.4 percent unemployment rate.
In comparison, St. Clair County has an 11.8 percent unemployment rate, while Talladega County posted a 14.6 percent unemployment rate for January.
Even though Wilcox County recorded the highest state unemployment rate in January, which is double that of St. Clair and Talladega counties, Wilcox County has fewer unemployed workers than either of the two northern counties.
The Alabama Department of Industrial Relations reports there are 916 unemployed workers in Wilcox County. Talladega has 5,205 unemployed workers while St. Clair County has 4,055 as of the end of January.
Nationally, Alabama ranked 42nd of the 50 states and the District of Columbia in unemployment numbers for January. The unemployment rate in Alabama, 11.6, is above the national average of 9.7 percent. North Dakota recorded the lowest unemployment rate of 4.2, according to the U.S. Bureau of Labor Statistics.
Southeastern states including Georgia (10.4), Kentucky (10.7), Tennessee (10.7), Mississippi (10.9), Florida (11.9), and North (11.1) and South Carolina (12.6), were among the states with the highest unemployment rates and all were above the national average,
PREPARING FOR THE FUTURE
Neal Wade, director of the Alabama Development Office, said he has seen positive economic changes, which could produce jobs for unemployed workers.
“I’m absolutely optimistic,” he said.
However, Wade said he does not expect to see dramatic decreases in the state’s unemployment numbers.
Wade said realistically he doesn’t expect to see the unemployment rate to go under double-digits before the end of the year.
“In 2011, we’ll see a turnaround in unemployment, not in 2010,” he predicted.
Wade said the Alabama Development Office, which works to create new jobs, operates differently in the current economic climate.
“I think the whole approach to job creation has changed since the downturn in the economy,” he said. “Recruiting is now only 20 percent of job creation.”
Wade said the focus for the Alabama Development Office and other economic development authorities scattered throughout the state, is on existing industries and expansion. However, there are new projects waiting in the wings when the economy improves.
“Six months ago, we saw that some of the projects were not as strong as we would have liked,” Wade said. “Today, we’re seeing global companies looking to expand operations in Alabama. It’s important to be ready when the economy recovers.”
He said his office is trying to get everything in place for new development, so when there is an upswing in the economy, the Alabama Development Office is ready to welcome new companies to the state.
“If we win some of these projects, it will take some time before they come on line,” Wade said, adding that the decline in unemployment rates will lag behind projects, which will create new jobs. “Realistically, 2010 is going to be a tough year for unemployment.”
STIMULUS MONEY
Todd Stacy, Gov. Bob Riley’s press secretary, said he was uncertain how much economic stimulus the American Recovery and Reinvestment Act of 2009 provided for those in Alabama.
“It has certainly filled holes in the budget,” Stacy said. “As far as the state, there was more red tape than recovery, but I wouldn’t go as far as saying it hasn’t helped at all.”
Stacy said the red tape involved with tapping into stimulus money has discouraged the use of available federal funds.
He also said the stimulus money the state has received is being spent over a two-year period, instead of all at once, during a one-year period.
“We’re trying to be as responsible as we can with the money,” Stacy said.
While the unemployment rate continues to climb, Stacy said the numbers are rising slowly.
“It’s not the dramatic increase we saw a year ago,” he said. “It’s slower, but we know there are a lot of folks out there who are hurting.”
JUMPSTARTING JOBS
Stacy said Riley is trying to encourage state legislators to pass three bills he believes will help stimulate the state’s economy and create new jobs for unemployed Alabama workers.
The three House Bills the governor has introduced to legislators are House Bills Nos. 90, 163, and 181.
Stacy said attention to the most important issue facing the state, unemployment, has been overshadowed by electronic bingo this legislative session. However, the “Jumpstarting for Jobs” tax credit is the governor’s top priority.
“The bills are aimed at helping businesses get back to the hiring mode,” Stacy said. “We know this will create jobs.”
Stacy said the “Jumpstarting for Jobs” bill will provide up to a $1,500 tax credit for every new job an employer creates. The amount of the one-time “Back to Work Tax Credit” depends on the employee’s wage.
He said the credit is designed to jumpstart job creation and accelerate economic recovery.
“It gives businesses the incentive to hire workers,” Stacy said. “The higher the wage, the higher the tax credit. We want people to have higher-paying jobs.”
He said another bill targets creation of jobs in rural counties that have the highest unemployment rates.
Stacy said the legislation would encourage businesses to open shop in rural counties suffering the most during the economic slowdown.
He said the bill would give employers an income tax credit of $500 per new job created in rural counties with high unemployment. The tax credit is available for each of the first three years the job exists.
Stacy said Riley also proposes legislation which could provide tax incentives for small businesses that provide health insurance for their employees.
He said in 2008, the Legislature passed and Riley signed a bill to increase the tax deduction available to employers and employees of small businesses for health insurance premiums to 150 percent of the premiums paid.
Stacy said the proposed legislation, currently in committee, would increase the income tax deduction for health insurance premiums paid by small business employers and employees from 150 to 200 percent.
He said the tax incentive would allow small business owners to deduct twice the amount they pay for health insurance premiums from their state income taxes. The deduction is available to businesses with fewer than 25 employees.
HARD SELL
State Sen. Jim Preuitt, D-Talladega, said he has not seen Riley’s economic stimulus legislation package but worries about providing tax credits during uncertain times.
“None of that will be a fast fix for the economy,” he said.
Preuitt said tax credits could choke off the future flow of state revenues and put the state in a pinch when businesses start receiving the tax credits.
He said a shortfall in revenues, because of future tax credits, could force layoffs of state employees.
“The recession didn’t happen overnight, and we will not get out of this overnight,” Preuitt said. “We can’t print money like the Feds.”
He said there are signs the nation is coming out of the recession, but it will take more time.
“You can’t eliminate the revenue stream to create new jobs,” Preuitt said.
But Stacy said Riley’s proposed legislation would spark economic growth and help create new jobs now, when it is needed the most.
He said the proposed tax credits are only available for a limited time and will provide the necessary economic spark until the economy is firing on all cylinders.
“We need to do something right now,” Stacy said, adding that Riley’s legislation could create 6,000 jobs immediately.
Wait, that's not much more that the 60% we are paying now. If you don't think the 60% is a fact, then you are not paying attention.
WakeupAmerica, will you ever say "ENOUGH" and take a stand??????
Do you really expect someone who is getting money to stay at home to search for a job? If you believe that, you're naive because you're not paying attention.
Well now that businesses are forced to buy healthcare, there's another reason to go overseas.