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Group floats three-part strategy to improve workforce shortage

The low-income advocacy group Alabama Arise recently unveiled a three-part strategy to improve Alabama’s workforce participation rate, which at 57%, remains among the lowest in the country.

While Alabama’s unemployment rate is currently a healthy 2.3%, the state’s labor participation rate – which unlike the unemployment rate, factors in all Alabamians whether they’re seeking employment or not – is the third-lowest such rate in the country.

In recent months, state leaders have focused their efforts to improve labor participation. Gov. Kay Ivey has called on lawmakers to identify and eliminate barriers to employment, while lawmakers, state department heads and industry leaders have worked to identify such barriers through the newly formed Labor Shortage Commission.

Members of the Labor Shortage Commission – which included Dev Wakeley with Alabama Arise – identified economic factors as the most common barriers to employment during its most recent meeting, factors that Alabama Arise cited heavily in its three-part strategy to improve labor participation.

Written by Alabama Arise Executive Director Robyn Hyden, the first strategy to improve labor participation is for the state to fund its Public Transportation Trust Fund, a fund created by lawmakers in 2018 that has yet to be allocated any state money. 

Hyden said that Alabama could receive significant matching funds were they to allocate state money to the fund given that the 2021 federal infrastructure bill dedicated $109 billion to public transportation projects. Without any matching state funds, however, those federal dollars are left on the table, Hyden argued.

Along with Hawaii and Nevada, Alabama remains as one of just three states that have not set aside state funding for public transportation.

“Multiple survey groups cited transit access as their top barrier,” Hyden said. “It’s time for Alabama to join the rest of our Southeastern neighbors by boosting public transportation investments.”

The second strategy, Hyden wrote, was to improve accountability for economic incentives offered by the state.

Alabama lawmakers have approved a number of economic incentives over the past several years, including the four-bill package passed earlier this year known as “The Game Plan,” which included incentives for businesses that invest and create jobs within the state.

Those incentives, however, could come with more enforcement mechanisms to ensure businesses hold up their end of the bargain, Hyden argued.

“While our state defers millions of dollars in tax revenue for vague incentives with unclear deliverables, many workers are still struggling to access the promised jobs because we have failed to invest in the necessary state infrastructure,” she said. “And too often, the jobs simply don’t measure up to the promised wages and hiring goals.”

The Game Plan bill package did include measures to increase transparency, specifically through the Enhancing Transparency Act, which requires the Alabama Department of Commerce to publish information regarding awarded economic incentives, something Hyden applauded lawmakers for in the report, but argued the state “must do more to enforce accountability.”

The third and final strategy listed in the report was to expand Medicaid, something Alabama Arise – along with most Democratic state lawmakers – have advocated for for years.

“Consistent health care for low-wage workers can help prevent or control chronic disabling conditions,” Hyden said. “It also can give workers a lifeline when they are struggling with addiction, substance use disorders or mental illness.”

Alabama remains one of ten states that have not expanded Medicaid, with the debate largely falling along partisan lines.

Opponents of expanding Medicaid often cite the price of doing so, which is estimated to cost $225.4 million per year over the next six years. Supporters of expanding the low-income health program, including Hyden, argue that those costs are largely offset by matching federal dollars, and that doing so could eliminate one of the most-commonly cited barriers to employment.

At the most recent meeting of the Labor Shortage Commission, Ted Hosp, vice president for government relations at Blue Cross and Blue Shield of Alabama, stressed that addressing poor health was a key component in improving labor participation.

“A survey conducted by the governor’s office (said) the second-most mentioned reason for people being unemployed or underemployed was their health,” he said. “In order to really address all of the barriers, we can’t overlook the fact that we are an unhealthy state with people who a lot of times simply aren’t ready to go to work because they lack health, and they lack access to health care.”

While many conservatives oppose Medicaid expansion over concerns about costs, Hyden argued it was the most efficient path forward given that doing so could provide health coverage to close to 300,000 more Alabamians.

“Workers ideally would find good-paying jobs that provide flexible and inclusive family benefits, but they also should retain access to health coverage if they have to take a break from work to handle caregiving duties, manage a health or family crisis, go back to school or start their own business,” she said.

“Temporarily losing a job with health coverage should not spiral further into permanent, preventable disability or untreated illness. Medicaid expansion would ensure many Alabamians still can get the health care they need during difficult times.”

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