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?
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. email@example.com.