Alabama’s unemployment rate in May stood at 9.6 percent, slightly higher than a year earlier and well above the national rate of 9.1 percent. Seven counties had unemployment rates of more than 15 percent, the highest being Wilcox County at 21.7 percent. More than 206,000 Alabamians currently are without jobs, and the 1.8 million people on nonfarm payrolls this May is about the same as in May 1997.
When I wrote about Alabama unemployment in December 2006, the rate was 3.6 percent; only 80,000 Alabamians were out of work; and we had been below the national average unemployment rate for more than five years.
It now seems clear that the prosperity of those years was not permanent, but rather cyclical.
It is not surprising then that the governor and Legislature have given high priority to legislation intended to stimulate job growth.
The Full Employment Act of 2011 offers small businesses a $1,000 income tax credit for each new job paying at least $10 an hour. But is this our best job-creating strategy?
It has been traditional in this state to think that tax incentives are the key to job creation. However, Alabama already collects the nation’s second-lowest state and local tax revenues per capita, 25 percent below the median of all states.
On the other hand, national tests in 2009 showed that only 21 percent of eighth-graders in Alabama’s public schools were proficient in math, versus a national average of 32 percent, and only 23 percent were proficient in reading, as compared with a national average of 30 percent.
Most states are ahead of us on these measures. Which of these key ingredients — taxes or schools — needs the most work in order to improve the state’s economic competitiveness?
From the Public Affairs Research Council of Alabama’s test score analyses (see http://parca.samford.edu/testscores.html), we know that Alabama has many high- as well as low-performing schools. All students can learn at high levels and every school can improve. They are more likely to do so when families and the community become engaged. The state should encourage accountability for results.
In the next few months, the governor will develop and present a strategic plan for state government, which provides much of the financing for public schools. He also will lead the State Board of Education in selecting a new state superintendent. In carrying out these important responsibilities, he should give a lot of thought to the connection between good schools and economic development.
EDITOR’S NOTE — Jim Williams is executive director for the nonprofit, nonpartisan Public Affairs Research Council of Alabama. Jim may be contacted at jwwillia@samford.edu.
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