Today’s guest columnist is Don Erwin.
In Alabama, we love winning the economic development megaprojects: Mercedes, Airbus, Honda, Hyundai, Mazda-Toyota.
The list is long, and each has brought thousands of new jobs.
What if the Birmingham metro could win a 68,000-job megaproject?
Holy moly!
That’s more jobs than Alabama’s entire automotive industry. Is Apple or Google moving out of California?
It will cost money, but we’re used to paying big incentives for big projects, right?
The Labor Force Participation Rate (LFPR) is the percent of a community or state’s population ages 16 and over who are working or actively looking for work. Utah has the highest LFPR at 69.8%; Mississippi has the lowest at 54.4%. Alabama’s LFPR is 57%, the fourth lowest of the US states.
The Birmingham metro’s Labor Force Participation Rate (LFPR) is about 61%. Each one percent Birmingham can raise its LFPR adds about 8,800 people to the labor force. If the Birmingham metro’s LFPR equaled Nashville’s (68.7%), there would be 68,000 more people either working or actively looking for work in the Birmingham metro! And that’s without a single new person moving here.
Can you imagine the prosperity that 68,000 additional people working would bring? More money to care for families. More cars and houses bought. Retail sales would boom. Existing job vacancies would be filled, and business recruiters could show prospective companies there’s a workforce waiting for them in Birmingham. Per capita and household income would rise. So would government tax revenue to provide increased services. There would be more prosperity for all.
Equaling Nashville’s LFPR is unrealistic, you say? Perhaps. What if we equaled Atlanta’s LFPR (67.3%)? That would add 55,000 people to the Birmingham metro workforce. If we equaled the Louisville Metro’s LFPR (65.2%), it would add 37,000 people. Even equaling Memphis’ LFPR, which isn’t so great (63.7%), would add more than 23,000 people to the workforce.
We struggle to attract people to move to Birmingham, but there are people already living here who could live more fulfilling and productive lives if they were working. Let’s help these people reach their potential.
Our low LFPR is a challenge for the entire Birmingham metro; the City of Birmingham makes up less than 18% of the metro population.
Raising the Labor Force Participation Rate (LFPR) is much more than just telling people to “get a job.” There are good reasons why our LFPR is low.
How we can raise our Labor Force Participation Rate
We need to make it easier for parents with young children to work. Center-based childcare in Alabama costs an average of $7,500/year; home-based childcare costs about $6,000/year—if you can find it.
Alabama has the sixth highest disability rate among the US states. Even worse, Alabama ranks 49th for disabled people with jobs. COVID showed that many jobs can be done remotely, and that opens new opportunities for disabled people.
In 2017, Alabama had the highest opioid prescribing rate in the country, with almost three times as many prescriptions written per person as the lowest-prescribing state. Between 1999 and 2015, the rise in opioid use caused the total prime-age labor force participation rate in Alabama to decline by 2.6 percentage points, a loss of 46,300 workers. According to the CDC, in 2020 there were 139 opioid prescriptions dispensed for every 100 people in Jefferson County. And this is just the legal drugs.
We need to help people acquire the skills to be employable. Many workforce development programs exist at different levels of government and the private sector. A goal of every such program should be to help increase the Labor Force Participation Rate.
Human nature is such that some able-bodied people have figured out how to game the system and “get by” without working. We should make that more difficult.
Let’s attract new people to the Birmingham metro, but let’s also help those already living here live as productive lives as possible. It would help them and help us all.
Don Erwin was an economic developer for twelve years. He is the author of Buffalo Hunting in Alabama, a novel about the competition among cities and states to attract economic development projects. He lives in the Birmingham metro.
David Sher is the founder and publisher of ComebackTown. He’s past Chairman of the Birmingham Regional Chamber of Commerce (BBA), Operation New Birmingham (REV Birmingham), and the City Action Partnership (CAP).
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Invite David to speak for free to your group about how we can have a more prosperous metro Birmingham. dsher@amsher.com.
Don
Very timely and doable. Just not sure Apple and Google corporate are leaving California anytime soon? There is a very interesting book review in today’s Wall Street Journal about Elon Musk.
He might be a good fit for Metro Birmingham at some point in time !!!
I have bought Elon Musk’s bio and look forward to reading it!
Time for lunch again soon, George.
Don
Alabama politicians will never allow a 68,000 job mega-project because it would change the political demographics in Alabama in a way that would hurt them.
Pat:
Oh no!!! You might be correct as these outside mega projects have had a positive impact on Georgia. But we have to be creative and go for it!
Announcing new jobs is one of the few ways politicians can show the voters they are doing a good job.
That being said, the “68,000-job megaproject” in my article is not a real project, just a way of saying that total employment comes not just from attracting big projects, but also finding ways for existing residents to join or rejoin the labor force.
To me, attracting meaningful new industries to ALABAMA will require
our governmental leaders to give up
the old hard-line rhetorics (“..draw the line..”) and apply modern-day standards for our young and educated workforce. Or, maybe it’s time for them to step up – become more vocal- take leadership jobs, as ALABAMA is their home and their future!
That is the process. It seems to be working in Georgia!!!
I am encouraged by the entrepreneurial efforts underway in Birmingham.
Excellent information and presentation of data and thoughts about it.
One take I see that is not yours is the idea that crept in at the beginning that you are thinking one company, newly arrives and opens to 68,000 jobs all at once. You know and I know that is not going to happen, not likely to happen anywhere on earth.
Tallahassee, Florida just finished a new Amazon distribution center. (what happened when the one west side of Birmingham opened? First, the building has no windows, inhumane, insane!. the Public was told there would be thousands of jobs. You do know that the most employees in that place are going to be robots! so what is next? Unemployed robots?.
A couple of points here. Our thoughts must be futuristic, not historic. That is how a city becomes a leader.
Another point that is really more serious is the focus of yours. People to thrive and improve their home and their hometown will get nowhere much more than drugged, obese, diabetic and/or dead if they continue to insist on being useless dependent living day by day as pitiful slobs. And Alabama has far too many of those!
Better education is critical. Poorly educated politicians are worthless, even dangerous.
Where is the inspiration, energy vigor, determination. You have it. You just did a great job of sharing it. Be louder, go father out beyond our little group. I think you are working on it and I really truly encourage it. Thank you so very much!
The “68,000-job megaproject” in my article is not a real project, just a way of saying that total employment comes not just from attracting big projects, but also finding ways for existing residents to join or rejoin the labor force.
Thank you for your thoughts. The more involved we all are, the better.
Don
One thing to note is that Labor Force Participation Rate considers anyone over the age of 16 in the calculation. That includes people in retirement age. The aim should be to raise the Prime Age labor force participation rate. Otherwise raising costs so that retirees would have to re-enter the labor force would technically raise the lfpr, but by doing something nobody should want.
Similarly, if single-income households can thrive in the metro, then that’s actually a good thing. An ideal situation would be good childcare for households that want two-member income, while also single income being cost-effective enough for those who want a stay at home parent. That situation wouldn’t maximize lfpr, though.
Very good points.
The availability of comparative data limits the conclusions that can be drawn. It’s more difficult to find prime age labor force participation rate (ages 25-54) data to compare different metros.
You are right that thriving economies put pressure on living costs. The housing costs in Nashville are very high now, for instance. On the other hand, you can find a gigantic mansion in the Alabama Black Belt for very little money, but chances of finding good jobs there are difficult. The key is find a good balance.
True that about housing costs in Nashville relative to Birmingham. Redfin has me on their email list, based on my curiosity about real estate prices in certain zip codes in Nashville and Birmingham. This morning they sent me two listings in back-to-back emails. For $350K you can buy a nice looking 2,400 sq.ft. house on Birmingham’s Southside. The same $350K you can get a 950 sq.ft. house in our West Nashville neighborhood. Whether working or unemployed, it’s tough to find affordable housing in Music City. But still they come…
Actually, recruiting major corporations to a city can bring tangential benefits in addition to jobs, tax revenue, etc. But also costs. Today’s Tennessean has this report about housing in Nashville. Amazon’s new regional corporate headquarters may be a double-edge sword: the massive firm can make a sizable donation to the city’s affordable housing fund. But it’s also partially responsible for the higher costs in the first place. Amazon helped caused an influx of new residents from even higher-cost cities such as SF, LA, NYC, who’ve driven up real estate themselves.
https://www.tennessean.com/story/news/2023/09/19/amazon-launches-new-affordable-homeownership-program-in-nashville/70843737007/
I may have missed the specifics. Is the author suggesting the creation of government run child-care centers? Is he implying disabled workers are unable to compete with able bodied workers for remote jobs? In reference to opioid prescriptions is the author diagnosing patients and providing options for pain management? Is the author asking for an increase in workforce development programs or that he thinks those programs are mismanaged?
My sardonic response is in response to yet another article pointing out problems or providing targets/goals without any semblance of a plan to correct the problems or a path to guide us to achieve the goals.
I have zero problem with people pointing out problems or setting goals for the community. I have a problem with people who want to point out problems but who are unwilling to even provide a plan for a solution. That is NOT leadership. Leadership is NOT shining a light on a problem and hoping other people will solve it. Leadership is shining a light on the path to correct a problem.
Read it this time. You misunderstood I am sure, Because I know you are better than that. Please and Thank you!
WOW i did not know that. The residents of Alabama have contributed so much to the human rights movement worldwide that such should be celebrated and taught these facts in all the schools in this state! Either way young people will find out the truth and the facts regardless of how much the legislature try’s to rewrite history for some odd ball reason.
Yes, I agree, You are right about that! Thank you
I wrote a massive reply to this before and it must have been too big because it did not publish. I don’t know about this. Afterwards I asked you simply to reread and re-think what you wrote, because I think it was misunderstood by you. It do not see how anything written in the posting could possibly, rationally, have resulted in your response. I do think if you read it more carefully that you are very definitely intelligent enough to see it. Otherwise I would like to know what I might be missing. Thank you
It’s not quite possible to conquer the world in 650 words. Sorry.
Ha ha ha
Go Don Erwin and continue to share your forward thinking solutions!
Don, you are quite right. But it only takes a spark to light a fire, sbd
I hope you are that spark!
Remember Rosa Parks set down so we can stand up! Light the fire Don!
Fine example, not forgotten, should not be and her influence was not just at her old home on State Highway 10 a few miles east of Abbeville, (HQ of Yellowwood lumber) where there is a posted historic landmark sign. Her influence has been international for the betterment of Alabama and Birmingham and her spark even lit Martin Luther King himself. I have driven by that sign many times.