Alabama unemployment rate among nation's worst

By: The Associated Press | Opelika Auburn News
Published: October 27, 2009

MONTGOMERY — Alabama has earned a spot on a Top Ten list it didn't want.

For September, Alabama had the 10th highest unemployment rate among the 50 states. It also recorded the nation's third-fastest growth in unemployment for the last year.

The director of the Center for Business and Economic Research at the University of Alabama said moving into the worst 10 states for unemployment has psychological impacts, particularly for the unemployed who have been looking for work and are on the verge of giving up.

``It has a dampening effect on morale,'' Sam Addy said Tuesday.

Alabama's unemployment rate of 10.7 percent for September was the state's highest in 24½ years. August's rate of 10.3 percent was 12th worst among the states.

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,'' 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.

Looking ahead, Addy sees two positive signs:

— Alabama's exports, particularly to China, are showing signs of improvement after dropping significantly early in the year.

— The state's industrial recruitment program has kept going full speed during the recession, which is bound to have an impact when a recovery starts.

Surtees points out Alabama had fewer new jobless claims in September than any month this year, and unemployment benefit payments dropped from 102,000 two weeks ago to slightly below 100,000 last week.

Surtees isn't ready to call those signs that unemployment is leveling off, but they are positives for an agency whose job is helping those out of work.