Recruiting, training and empowering a highly skilled workforce driven by business and industry needs is giving Alabama a competitive edge for economic growth.
We see the results of this sound strategy throughout the state. As Governor Kay Ivey recently announced, Alabama’s economic development activity in 2020 generated approximately $5 billion in new investments and nearly 10,000 job commitments. This level of job recruitment is astounding, especially considering the challenges the coronavirus posed to economic developers in 2020. These new jobs will help to lower or keep low our unemployment rate, which is already the lowest in the Southeast.
In economic development, some analysts focus on incentive packages that states offer to attract new businesses. But good business leaders know the most important resource a state can offer is a pool of talented, well-trained and ready workers.
There is no doubt that Alabamians are hard workers. This is no secret among America’s leading industries, who have seen for themselves that Alabama brings to the table dedicated workers and a workforce development strategy that are second to none.
Under Governor Ivey’s leadership, workforce development in Alabama is a collaborative effort. Shortly after assuming office, Governor Ivey launched Strong Start, Strong Finish to integrate Alabama’s early childhood education, K-12, and workforce development programs. Through the Success Plus initiative, a component of Strong Start, Strong Finish, Governor Ivey established a structured path for our state to add an additional 500,000 credentialed workers to the workforce by 2025. In addition, it equips our citizens to work the jobs that are in greatest demand. As Alabama Secretary of Commerce Greg Canfield said, Success Plus gives prospective employers “yet another reason” to locate in Alabama.
These efforts to improve and coordinate our education and workforce training programs have received national acclaim from organizations like the National Governors Association, Credential Engine, the Lumina Foundation, Site Selection magazine and more.
But to keep moving forward, we cannot rest on our laurels. While all Alabamians can be pleased our economy is growing and unemployment is low, our labor force participation rate must improve. Defined by the U.S. Bureau of Labor Statistics, the labor force participation rate is the percentage of the population age between 16 and 64 who are either working or actively looking for work. Alabama’s most recent labor force participation rate is 57.8 percent, compared to the national rate of about 62 percent.
We know a significant number of Alabamians do not work or actively look for work because they fear they will lose benefits or services quicker than they can make up for them through paid employment. A recent survey of unemployed and underemployed Alabamians revealed that more than 37 percent declined or delayed taking a new job or promotion because they were afraid they would lose a government benefit and end up being worse off financially.
Known as benefit cliffs, these situations have long been recognized to create financial disincentives for some individuals to earn more income or train for higher paying occupations. Because many do not know whether a benefit cliff actually exists for their particular situation, low-income workers may decline to take on more hours at work or accept promotions simply out of fear they will lose benefits. This lack of transparency can drive poor decision making and hold these workers back.
To provide this needed transparency, Alabama offers DAVID, the Dashboard for Alabamians to Visualize Income Determinations. Created through a unique partnership between the state and the Federal Reserve Bank of Atlanta, DAVID helps individuals understand how much money they will gain through paid employment in various careers. Alabama is the first state in the nation to create such an innovative tool – a benefits cliff calculator combined with a career planner.
Raphael Bostic, the President and CEO of the Atlanta Fed, said this will help ensure the economy “works for everyone.”
Connecting education and workforce development has proven to be not only a sound strategy for helping unemployed and underemployed Alabamians, it also strengthens our ability to recruit new jobs and economic opportunities. By continuing to provide innovative tools, educational opportunities and world-class workforce training, we can ensure our economy does indeed work for everyone and that Alabama’s best days are yet to come.
