October 29th, 2009

New unemployment numbers came out yesterday.  Alabama made the top 10 list – and I don’t mean that in a good way.

Our employment rate hit 10.7 percent in September.  That’s the 10th worst unemployment rate in the country.  It is also nearly double what it was just a year ago and the highest it has been in nearly 25 years.

Why so high now, when we keep hearing that the worst of the recession is behind us?

The best analysis I have read is in this article from the Associated Press:

Over the last year, Alabama’s unemployment rate has nearly doubled from 5.4 percent in September 2008. The U.S. Bureau of Labor Statistics reports that Alabama’s rise of 5.3 percentage points from 5.4 percent a year ago to 10.7 percent in September 2009 was the third greatest in the U.S.

“We got into the recession later, but the effect was much greater,” [University of Alabama Center for Business and Economic Research Director Sam] Addy said.

Ranking above Alabama are Nevada (up 6.0 percentage points) and Michigan (up 6.4 percentage points). Those are also the top two states in unemployment, with Michigan at 15.3 percent and Nevada at 13.3 percent.

The man who oversees Alabama’s unemployment compensation benefits, state Industrial Relations Director Tom Surtees, said Alabama was in the middle of the states in unemployment only a year ago. That’s because the early part of the recession curtailed the financial and housing industries, and Alabama was not as impacted as many other states.

Then the recession hit manufacturing jobs, and Alabama has more workers in manufacturing jobs than the typical state, Addy said. Also, professional, business and technical services were hit hard. Those jobs, along with manufacturing, tend to be Alabama’s best-paying.

“When you are losing jobs in higher-paying industries, it affects everyone else because they can’t spend as much,” Addy said.

Posted by Kristina Scott