10
Alabama Business
Economic
Well-Being of
Alabamians,
2000 to 2004
Employment
The first three years of the 21st century
were hard on Alabama workers. Between
2000 and 2003, the state lost about
56,400 nonagricultural wage and salary
jobs, a sharp contrast to the 295,400 jobs
added during 10 consecutive years of
gains between 1990 and 2000. While
2004 presents a glimmer of improvement, jobs are returning more slowly
than they left. Employment is up 400
on average for the first six months of
2004 compared to 2003; however, jobs
fell by 22,450 from 2000 to 2001. The
June 2003 to June 2004 period shows a
slightly larger gain of 2,500 jobs.
Job gains and losses in Alabama over the
last five years were not evenly distributed
among major industry groups. Manufacturing continues to fall into the negative column, although annual losses have
slowly moderated since the June 2000 to
June 2001 period when the state saw a
net loss of 29,900 manufacturing jobs.
Just think how Alabama’s manufacturing
picture would look without the continuing addition of jobs in the state’s auto
industry and in other transportation
equipment. Employment in the trans-
portation equipment manufacturing category increased by 4,700 between June
2000 and June 2004. According to a
study done for the Alabama Automotive
Manufacturing Association, direct jobs
in the state’s automotive industry (which
includes suppliers) rose almost 4,300
from 2001 to 2003 to total 31,197,
despite the loss of 2,000 jobs at seven
plants that closed in 2003 alone. Many
more automotive industry jobs are on
the horizon as Honda and Mercedes
expand production and Hyundai production gets underway early in 2005.
Other traditional manufacturing sectors
continue to struggle, however. Employment at textile mills and apparel manufacturers slid from 49,900 in June 2000
to just 27,800 in June 2004, a loss of
Alabama Nonagricultural Employment
Change from Previous Year
Total
Manufacturing
Trade
Services
June 2000
16,100
-5,400
2,300
16,500
800
June 2001
-22,400
-29,900
-4,800
8,800
100
June 2002
-32,500
-17,000
-9,700
5,200
2,800
June 2003
-10,400
-14,400
1,600
5,100
3,100
2,500
-5,700
5,500
1,900
200
June 2004 (p)
Source: Alabama Department of Industrial Relations.
Government
22,100 jobs. Primary and fabricated metals industries saw jobs in the state drop
from 54,500 in 2000 to 44,000 in June
2004, a decline of 10,500 workers.
Computer and electronic product manufacturing was hit by the high tech slide,
costing the state 3,600 jobs between June
2000 and June 2004.
Services and government have been the
stalwarts of Alabama’s economy since
2000. Overall jobs in services rose
21,000 between June 2000 and June
2004, with about half the gain in educational and health services. Government
employment has also trended up during
this period, with state and local governments responsible for an increase of
6,200 jobs. Wholesale and retail trade
lost 14,500 jobs between June 2000 and
June 2002, but have since added 7,100
jobs.
Despite job losses, Alabama’s labor force
grew by 19,700 between June 2000 and
June 2004, contributing to an increase of
21,400 in the number of unemployed
Alabamians. Total employment of the
state’s workers fell by just 1,700, however, well below the 62,800 jobs lost during
this time. This discrepancy can be
accounted for by an increased number of
residents finding jobs out of state and by
a rise in the number of workers who are
self-employed or employed by a family
member.
Alabama Business
Southeastern Nonagricultural
Employment
Percent Change, 2000 to 2003
United States
Alabama
Florida
Georgia
Mississippi
North Carolina
South Carolina
Tennessee
-1.4%
-2.9%
2.9%
-2.3%
-3.2%
-3.3%
-2.5%
-2.2%
Source: U.S. Bureau of Labor Statistics.
Looking at a comparative group of
southeastern states, Alabama’s job loss
of 2.9 percent between 2000 and 2003
was less than the 3.2 and 3.3 percent of
nonagricultural jobs lost in Mississippi
and North Carolina, respectively. Except
for Florida which posted a 2.9 percent
gain, all of these states fared worse than
the United States over the three year
period.
Income
Alabama’s changing job mix is boosting
the per capita income of the state’s residents at a rate faster than the nation’s.
From 2000 to 2003, per capita income in
Alabama rose 10.8 percent, well above
the U.S. average of 6.0 percent and faster
than all other comparative southeastern
states except Mississippi. Personal
income includes before tax net earnings
by place of residence; rents, dividends,
and interest; and personal current trans-
Southeastern Per Capita
Personal Income
Percent Change, 2000 to 2003
United States
Alabama
Florida
Georgia
Mississippi
North Carolina
South Carolina
Tennessee
6.0%
10.8%
6.8%
5.2%
11.6%
4.3%
7.0%
9.0%
Source: U.S. Bureau of Economic
Analysis.
fer receipts. The state’s per capita disposable personal income, which is
income minus personal current taxes,
was also up 10.8 percent from 2000 to
2003. With the increase in the cost of
living (CPI-U) at 6.8 percent for the
same period, the average Alabamian had
more money to spend in real terms in
2003 than in 2000.
Data for the first quarter of 2004 indicate that income growth continues to be
above average in the current year. Alabama’s total personal income is up 1.6
percent from fourth quarter 2003, which
compares to a 1.4 percent gain for the
U.S. to rank the state 14th on first quarter income growth. Income from earnings rose 1.7 percent for the quarter,
while transfer receipts were up 1.9 percent. Rents, dividends, and interest
increased at the U.S. average of 0.8 percent.
Earnings by industry for first quarter
2004 show the positive effects of ongoing growth in Alabama’s transportation
equipment manufacturing sector. Durable goods manufacturing earnings rose
4.0 percent compared to 2.1 percent for
the nation, while earnings in the construction industry were up 4.4 percent,
well above the U.S. increase of 2.2 percent. At 2.3 percent, earnings in Alabama’s trade sector were also significantly higher than the U.S. gain of 1.5 per-
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cent. However, first quarter earnings in
professional and business services were
well below average (0.4 versus 1.6 percent), while statewide earnings in the
information sector dropped 0.2 percent
compared to a nationwide increase of 1.3
percent.
Looking historically at personal income
for the current quarter compared to the
same quarter a year ago, growth in
Alabama’s quarterly personal income was
close to or above the nation’s from first
quarter 1990 through first quarter 1995.
However, Alabama began to lose ground
in the second quarter of 1995, with
income gains well below the U.S. for the
ensuing six years. Increases strengthened
in second quarter 2001 and have since
continued on a higher trajectory. This
pattern is reflected in the state’s per capita income, which slid from a peak of
84.2 percent of the U.S. average in 1995
to just 79.6 percent in 2000. Recent
stronger income gains have the wellbeing of Alabama’s residents improving,
although with per capita income at 83.3
percent of the national average in 2003,
there is plenty of room for continued
growth.
Carolyn Trent