In the last three months of 2012, Alabama’s economy was a top-5 performer nationally. According to the coincident index compiled by the Federal Reserve Bank of Philadelphia, Alabama did well when it combined total jobs, unemployment, total wages and hours working in manufacturing. But when the bank looked at the entire year, the state ranked only 30th, though that was not as bad as it could have been.
Not everything was rosy, however. Though unemployment went down dramatically in the last quarter of the year, this might have been in part the result of people no longer looking for work. During the year, the state’s economy added jobs much slower than the rest of the nation.
Still, this improvement coming at the end of 2012 points to potential growth in 2013 and even more growth in 2014. This was the conclusion reached recently by Samuel Addy, director of the University of Alabama’s Center for Business and Economic Research (CBER).
Addy, speaking at CBER’s Economic Outlook Conference, predicted slow improvement, but improvement nevertheless.
The brightest spot Addy noted was Alabama’s auto industry, which set production records last year. Wages in that sector of the economy are nearly twice what the average worker makes, and because of overtime, he added, “a lot of workers are making … in the six figures.
Troubling still is underemployment — people either working part time or at a wage that won’t pay their bills. Sadly, some 24 percent of the state’s workforce falls into that category. With Gov. Robert Bentley opting out of the Medicaid expansion under the Affordable Care Act, many — if not most — of the underemployed will be without health insurance.
Not only is this a helping hand we are not extending, as David Bronner, director of the Retirement Systems of Alabama pointed out when he spoke to the CBER gathering, the expansion would have also been a job-creator.
Nevertheless, if the projections are right, more people in 2013 and 2014 will be working, more wages will be earned, more things will be bought and more taxes will come into the state coffers.
Finally, Alabama may be able to better fund the services it provides and state agencies will not have to find new ways to cut even deeper into their budgets.