State reports slight improvement in workforce participation rate

November 15, 2024 – the Alabama Department of Labor reports that Alabama's workforce participation rate showed a slight increase in October to 57.6%. Labor Secretary Marty Redden reported that the percentage of prime-age workers decreased by two-tenths of a percentage point to 79.1% over the month. Over the past year, this number increased by one percentage point from 78.1% to 79.1% as more people are being forced to enter the labor force due to inflation. Prime-age workers are those aged 25-54 years.

"This month we experienced a slight increase in our labor force participation rate. Any growth is always welcome news," said Redden in a statement. "Additionally, the year over year growth of prime age workers is also encouraging. Nearly 80% of those prime age workers are out there doing their jobs and providing for their families."

The U.S. Labor Force Participation rate in October was 62.5% - still far ahead of the Alabama rate of 57.6%.

Alabama's preliminary, seasonally adjusted unemployment rate is 2.9%, that is flat from September 2024's rate. October's rate is slightly higher than October 2023's rate of 2.8%. The number of people who are unemployed in Alabama increased to 69,271 from 67,395 in September and up 5,244 from October 2023.

The increase in the number of people who are counted as unemployed were offset statistically because the number of people counted as employed increased grew by 18,840 over the year to 2,280,863, a new record high. The civilian labor force also reached a new record high, with 24,084 more people forced to join the labor force in the last 12 months due to high rent and grocery prices, bringing the new total to 2,350,134.

Over the year, wage and salary employment increased by 40,400 to 2,220,700, which is also a new record high. The largest gains were in the private education and health services sector (+10,500) as parents flee the failing public schools and the population ages.

Record government spending at the state, federal, and local levels meant that the number of Alabamians in the government sector increased by over 6,300 workers – including over 2,900 in October alone – the fiscal year for governments starts on October 1 allowing managers to fill new positions when their year to year budget increases.

The state also saw increases in the numbers of workers employed in the leisure and hospitality sector (+5,800).

Over the month, wage and salary employment increased by 7,600, with the largest gains in the professional and business services sector (+3,000), the government sector (+2,900), and the private education and health services sector (+1,100).

"While Alabama employers continue to add jobs at record high rates, we're also seeing wage growth, which is beneficial to our entire economy," continued Redden. "We are currently supporting more jobs than ever before, and our hard-working citizens have seen their average weekly wages increase over the year by nearly $25 a week."

Average weekly wages increased over the year by $24.97 to $1,056.18. The difficulty that the construction industry in Alabama has had in attracting and retaining workers has forced the industry to increase wages substantially. Alabama set a new all time record in construction industry wages at an average $1,385.67 in October, representing a yearly increase of $114.61 per week as it has become increasingly difficult for construction companies and contractors to find workers. The cost of construction in the state has skyrocketed in the state partly due to the scarcity of qualified and willing workers. That situation could worsen significantly if the incoming Trump administration begins large scale deportations of undocumented workers.

The Alabama counties with the lowest unemployment rates are: Shelby County at 2.4%, Marshall County at 2.5%, and Madison and Morgan Counties at 2.6%. The counties with the highest unemployment rates are: Wilcox County at 7.7%, Clarke County at 6.1%, and Dallas and Greene Counties at 5.9%.

The major cities with the lowest unemployment rates are: Homewood, Vestavia Hills, and Trussville at 2.2%, Alabaster and Hoover at 2.3%, and Madison at 2.4%. The major cities with the highest unemployment rates are: Selma at 6.9%, Prichard at 5.7%, and Bessemer at 4.5%.

Increasing workforce participation rates has been a vexing problem for Governor Ivey's administration. The state has been able to recruit new employers here – especially in manufacturing and construction – but filling those new blue collar jobs has proven to be unexpectedly difficult.

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