WIOA State Plan Common Elements

Recession and Recovery

Alabama lagged the rest of the nation in the effects in 2008 when the last economic recession hit. Alabama again lagged when the rest of the nation started pulling out of the recession. In 2015, the construction sector still had not yet recovered. Federal, state, and local government budgets suffered tremendously during the recession, and cutbacks occurred at all levels. Federal budget constraints hurt the state’s military operations and the federal research contracts in the state.

In 2016 when states began to see their unemployment rates finally decline, Alabama had the highest unemployment rate in the Southeast Region, and Alabama’s unemployment rate was in the top five highest in the nation. However, the data reflected some confidence in the recovery with civilian labor force numbers rising.  In just two short years, Alabama not only recovered from the recession, but it also reached historic high levels of civilian labor force and number of people employed. In November 2019, the civilian labor force was a historic high of 2,259,373, with only 55,794 people in the state classified as unemployed, equating to a record low unemployment rate of 2.7%.

Alabama’s Manufacturing Environment in the 21^st Century

Historically, the economy in the United States has thrived due to its manufacturing industries. At the turn of the 21^st century, many states had shifted away from manufacturing. Alabama is one of only 5 states in the nation where manufacturing has been largest industry every year since 1990. The 21^st century began with an influx of new major automotive manufacturers into the state, replacing thousands of textile and apparel manufacturing jobs lost over the past two decades.

While auto manufacturers did suffer during the recession, they have experienced increases in auto sales and exports since, which has led to additional shifts and more employees. The resurgence in automotive manufacturing has also led to additional transportation manufacturers locating in the state. Aerospace Manufacturing has always had a large presence due to Marshall Space Center in Huntsville, Alabama, but since 2000 this industry has expanded into new regions of the state to become a major aerospace presence across the nation. Alabama produced a record $21.7 billion in exports in 2017.

Alabama’s Population and Population Growth

The Alabama population count of almost 4.9 million for 2018 was 2.3 percent more than the estimated 4.8 million state population in 2010. The state’s population growth was lower than the nation’s 6.0 percent population increase over the 2010-2018 period. During that period, the population grew faster for North and West AlabamaWorks regions than for the state. During the 2010-2018 period, North AlabamaWorks had the highest population growth at 4.2 percent, followed by Southwest AlabamaWorks (SAWDC) with 3.6 percent, and Central Six at 2.3 percent. East AlabamaWorks had a population decline of -2.5 percent and Southeast AlabamaWorks had a population decline of -0.3 percent.

Based on the 2018 Census Bureau estimates, the population in the state is: 69.1 percent White, 26.8 percent Black, 1.5 percent Asian, and 0.7 percent American Indian. The largest percentage of the White population lives in north Alabama, while the largest percentage of the Black population lives in central Alabama. Washington County—7.8 percent—and Escambia County—3.9 percent—have the state’s largest population of American Indians. The counties with the largest Asian population are Lee County—4.2 percent followed by Sumter County—2.0 percent. The largest percentage of the Asian population resides in Jefferson and Madison Counties. The latest Hispanic population figure for the state 4.4 percent of the state’s population, which is an increase from 3.4 percent in 2010. The counties with the largest percentage of Hispanic population are Franklin – 17.8 percent, DeKalb – 14.8 percent, and Marshall – 14.3 percent.

The population in the state continues to age at a fast pace. In 2000, only 22.4 percent of the population was over the age of 55, while in 2017, 31 percent of the population was over 55. At 22.0 percent, older workers (age 55 and over) constitute a significant and growing part of total nonagricultural employment. The share of older workers age 55 and over across the workforce investment areas ranged from 20.7 percent for West AlabamaWorks to 23.3 percent for Southeast. To meet long-term occupational projections for growth and replacement, labor force participation of younger residents must increase; additionally, older workers may need to be incentivized to work longer.

Alabama’s Employment and Income Levels

During 2014, wage and salary employment for the state averaged 1.86 million, still lower than the pre-recession level of 1.95 million. Alabama’s total employment dropped to an annual average of 1.81 million at the height of the recession. Since 2014, wage and salary employment has reached over 2 million, gaining 81,000 jobs through 2017, 32,500 of them since 2016. The industry sector with the largest effect on the state’s economy continues to be manufacturing, with $19.43 billion in manufactured goods exports in 2016. In the 20th century, the majority of manufacturing in the state consisted of nondurable goods, such as textiles, apparel, food, and paper. Due to changes in trade agreements and many manufacturers moving out of the country due to labor costs, these industries are no longer the primary source of income for the state. In the 21st century, durable goods manufacturing industries have risen to the forefront, through extensive economic development efforts, to replace those thousands of jobs lost in nondurable goods. Transportation manufacturing has had the greatest impact, presently making up 25 percent of the manufacturing employment in the state. Between 2010 and 2016, manufactured goods exports grew by nearly 52 percent. This success is due to the great dedication and effort of the state’s economic development efforts. 

 Overview of Alabama’s Workforce Development Regions & Regional Workforce Councils

In 2016, the state had 10 regional workforce development councils that worked with industry to ensure they had trained workers to meet the demand of those high demand industries. In 2017, the leadership of the Alabama Workforce Council, the WIOA State Board, and WIOA partner agencies decided to reduce the regions to seven. At the same time, the state WIOA leadership worked toward increasing the number of local WIOA boards from 3 to 7 and matched those regions to the 7 regional workforce councils (RWCs). Each of the regions has boards consisting of industry leaders, educators, economic developers, and community leaders. The RWCs are arranged as 501c3 organizations with executive directors and are primarily funded by the state through the Alabama Department of Commerce.

Southwest Alabama Workforce Development Council (SAWDC) was the first RWC in Alabama. This region includes the Mobile and Daphne/Fairhope/Foley metropolitan areas. In 2017, the Mobile local WIOA board expanded to the same geographic area of SAWDC and became the Southwest Alabama Partnership for Training and Employment (SWAPTE). The Jefferson County local WIOA board expanded to the geographic area of the Central Six Workforce Development Council and became Central Alabama Partnership for Training and Employment (CAPTE). The remaining counties that were previously part of the third local state board were divided into the geographic areas of the other 5 RWCs and function under the same names. Each of the 7 regions in the state varies economically. All include at least one metropolitan area, which often drives the economy and jobs in the region. All of the regions also include at least one two-year community college and four-year college or university.

North Alabama Works

North Alabama Works encompasses three metropolitan areas: Huntsville, Decatur, and Florence/Muscle Shoals. The estimated population in 2018 was 1,134,607, which is a 1.3 percent gain since 2016. The per capita income in 2017 was $40,542, which is $263 less than the state average. Total employment in March 2019 was 518,284 519,107, which is up -1.2 percent decline from 2016. at 19.2 percent, manufacturing employs the largest percentage of the workforce in the region. This region is highly-regarded for its nationally recognized high-tech hub in the Huntsville metro. With the second-largest research and development park in the United States, the area is home to a large array of fortune 500 companies, local and international high-tech companies, and U.S. space and defense agencies. This center for research and development employs nearly half of the state’s total architecture and engineering occupations and a third of the computer and mathematical occupations. Employment in the Federal government has declined 4.2 percent since 2009 in the region.

Note: Not seasonally adjusted.

Along with the rest of the state, this region has experienced immense growth in transportation and manufacturing occupations. For several years, motor vehicle body and trailer manufacturing was a large part of the economy in the western portion of the region. In addition, Toyota has operated an engine manufacturing plant in the Huntsville area since 2003, but since the 2008 recession, the region has attracted numerous motor vehicle parts manufacturers. Employment in this industry has increased by 53 percent since 2009. In January 2018, Toyota announced plans to build a $1.6 billion plant located between Decatur and Huntsville that will employ up to 4,000 people. Toyota’s new presence will certainly increase the business for surrounding parts and metals manufacturers in the region and statewide. Although the Huntsville metro is centered on technology, many of the surrounding counties in the region still depend on agriculture, with an estimate of over 2,234 employed in agriculture. The region continues to be a large producer of poultry, cattle, corn, and cotton. 

East Alabama Works

East Alabama Works includes the Gadsden and Anniston metropolitan areas. In 2018, the region’s population estimate was 373,625, a loss of 2.5 percent from 2016. The population in the two metro areas in the region make up over 55 percent of the region’s population. These metro areas had a population decline of over 9,475 people since 2010. Per capita income in the region was $35,162, approximately 13.9 percent below the state average of $40,805 in 2018. The largest percentage of the workforce in the region is employed in manufacturing industries.  Total employment in 2018 was 152,921, up 5.7 percent since 2016. Although manufacturing has grown slightly in the region since 2014, 2.7 percent, the region is still trying to replace textile and apparel jobs that moved overseas. These industries dominated the manufacturing base in the region prior to the year 2000. These industries employed 7,740 in 2000, and only 1,588 jobs remained in 2016. Transportation manufacturing employment has grown 22.5 percent since 2010, with an employment of 9,225 in 2016.

West Alabama Works

West Alabama Works includes the Tuscaloosa metropolitan area; however, the surrounding counties in the region are considered rural. The region had an estimated population of 336,242 in 2018, with the majority residing in Tuscaloosa County. Per capita income, estimate in 2018 at $35,876 in the region, is $4,929 less than the state average. Tuscaloosa County makes up approximately 66.4 percent of the region’s total employment.  Educational Services is the dominant industry in Tuscaloosa County, since the University of Alabama. The region, as a whole, experiences a large impact on manufacturing. Total employment has grown by 2.2 percent since 2014, reaching 138,548 in 2016. While the region has experienced significant losses in apparel, petroleum, and coal product manufacturing, transportation manufacturing in the region has grown. The transportation manufacturing industry, employing 7,200 people in 2016, experienced 15.3 percent growth since 2014.

CAPTE

The most heavily populated region in the state is the Central Alabama Partnership for Training & Education (CAPTE), which consists of the Birmingham metropolitan area. The 2018 population estimate was 1,129,401, showing an increase from 2016 of 2.2 percent. The region’s per capita income is above the state average at $48,469. Nearly 24.5 percent of the state’s workforce is located within the region, with a total employment of 527,579 in 2018. This region is centrally located in the state. This makes it a perfect location for regional distribution centers. The region is also the financial center of the state, with approximately 34,900 employed in finance and insurance industries. This is 48 percent of the state’s finance and insurance industries. According to the Federal Reserve, Birmingham has nearly $220 billion in bank assets, ranking it as the second-largest banking center in the South and 11th nationally. The corporate headquarters for four financial institutions and several major insurance companies are located in the region. The CAPTE region also leads the state in health care services and medical research. The University of Alabama at Birmingham (UAB) is the fourth-largest academic medical center in the United States, and it ranks 44th out of 965 institutions in the National Science Foundation Total R&D Expenditures. Furthermore, UAB’s University Hospital is the third-largest public hospital in the nation.

Central Alabama Works

Central Alabama Works comprises 13 counties and includes the Montgomery and Auburn/Opelika Metropolitan areas. The 2018 population estimate for this region is 755,801, which represents 15.5 percent of the total state population. In 2018, the per capita income was $38,639, 5.4 percent lower than the state average. A large number of veterans live in this region, with the presence of the Maxwell Air Force Base in Montgomery County. Total employment in the region was estimated at 330,580 in 20168, which is a gain of 16,837 since 2016. Like most of the other regions of the state, Central Alabama Works has experienced immense employment growth in transportation manufacturing industries. With the location of a major automobile manufacturing plant in the region, employment has grown 31.4 percent in automotive manufacturing and 17.9 percent in automotive parts manufacturing since 2014. The region has also enjoyed growth in aerospace manufacturing, with continued stable growth and employment over 1,000. Another major industry in the area is education services, due to the presence of several major universities, such as Auburn, Tuskegee, Alabama State, AUM, Huntingdon, Faulkner, Troy Montgomery, and also many community colleges in the region. A study by the Association of Public and Land-grant Universities reported that Auburn had a $5.1 billion economic impact in the state in 2014.  Chemical manufacturing employment has grown 3.7 percent since 2014.  Furthermore, the region has seen stable employment in fabricated metal product manufacturing with just under 3,000 employed.

Southeast Alabama Works

Southeast Alabama Works includes the Dothan metropolitan area and surrounding counties. The population in the region remained stable with an estimate of 378,906 in 2018. During the same period, Coffee County showed the most population growth of 3.9 percent reaching 51,909. Military veterans are a huge part of this region, with the latest figures showing that an estimated 34,000 in the region are veterans, the highest in the state. Houston County had the highest percentage of veterans, with an estimated 8,800 residing there. Coffee county had the highest per capita income in the region, at $42,076 in 2018, slightly higher than the state average. The region’s 2018 per capita income was $37,890, which was $2,915 below the state average. This region is home to a major university, military base, and a strong presence in aviation training. Additionally, the region still holds a major role, both in the state and nation, in agriculture production. The area continues to be a large producer of cotton, peanuts, and poultry, and eggs.

SWAPTE

Southwest Alabama Partnership for Training & Education (SWAPTE), encompasses the southwest region of the state. This area consists of the Mobile and the Daphne-Fairhope-Foley metropolitan areas, which contains the vast majority of the region’s population. The latest population estimates for the region are 765,637. Per capita income for the region in 2018 was $38,406, $2,399 below the state average. Total employment in March 2019 was 319,517, and manufacturing employment has remained stable, with growth around 1.0 percent. Primary metal manufacturing employs over 4,000, and transportation equipment manufacturing has grown to over 7,700 employed, most of the growth being in ship manufacturing. In 2017, Amazon announced the opening of a $30 million Distribution Center and Walmart also announced a distribution center in the area, establishing the area as a hub for distribution centers demonstrating growth of 16.3 percent in warehousing and storage since 2014.

Alabama’s number one manufacturing export is in transportation equipment manufacturing, including aerospace, automotive, and shipbuilding. At the height of the last recession, transportation manufacturing dropped down to 45,692 employed; however, since 2010 transportation manufacturing has grown over 39.8 percent, with automotive parts manufacturing growing the most at 89.7 percent. Ship and boat building had a slight downturn in 2010, possibly affected by budget cuts and fewer federal contracts. However, the sector rebounded to 3,640 in 2011 and continues to increase annually, with a 2018 employment level of 4,890. Due to economic development efforts, thousands of new jobs have been announced for the coming years. Alabama’s Air National Guard’s 187th Fighter Wing in Montgomery will be home to the F-35 jets, which are key to the nation’s future military needs. This will bring more aerospace jobs to the central region. Furthermore, thousands of jobs were announced around the state with companies like Boeing, Airbus, Aerojet Rocketdyne, and Lear. This will boost the need for jobs like avionics technicians and various other engineering and engineering technician jobs. The state will also gain another major automotive manufacturer in North Alabama. Toyota announced that it would open a plant to build both Toyotas and Mazdas creating around 4,000 new jobs in the state. Thousands of additional parts manufacturing and other jobs will follow to supply this new plant. The state is going to have to produce thousands more trained workers in jobs such as CNC operators, machinists, fabricators, industrial machinery mechanics, industrial maintenance specialists, and other skilled manufacturing jobs that require some training and education beyond high school.

One of the industries that was hardest hit by the last recession was construction. In 2008, employment in construction totaled over 105,000 in Alabama. In one year, that total decreased by 15,000. When the recovery began and unemployment rates started to slowly decline in 2015, construction employment continued to decline.  In 2016, construction employment in the state was approximately 83,000. Nevertheless, with new industries bringing construction projects within the last two years and new road and bridge projects across the state, construction employment is increasing. In 2018, construction employment was over 87,000, which surpassed the 2010 level. While the industry has not reached pre-recession employment levels, growth will likely continue over the next few years. After many people lost their jobs during the recession, many who were at retirement age never returned to work, which caused the industry to lose some of its most experienced workers. Now that the industry is recovering, employers are finding it extremely difficult to find experienced midlevel managers. They are also having problems hiring individuals for many of the skilled trade positions, such as electricians, HVAC techs, heavy equipment operators, and cost estimators.

Distribution, like most industries, took a hit during the recession, yet it has steadily increased its employment levels since 2010. Warehousing has especially grown, with an increase of nearly 47.0 percent since 2010, and over 1,500 new jobs announced in 2016-2017. In the last two years, nearly 12,000 jobs have been added statewide in the transportation and warehousing industry. Companies like Amazon, Walmart, Publix, Facebook, and several others have all contributed to this large increase in employment. Regions 1, 4, and 5 added the most jobs totaling over 7,800 of the total.  Several new jobs in food and beverage distribution were announced across the state—many in the Birmingham metro area. For at least five years, the heavy and tractor-trailer truck driver occupations have had the highest number of online job ads statewide, averaging over 2,500 each month. With the increase in distribution, warehousing, and manufacturing, demand for qualified truck drivers will likely increase. Furthermore, new companies are going to require hundreds of customer service representatives, computer-user support specialists, and warehouse jobs requiring industrial equipment operation and maintenance experience.

Information technology, another targeted industry cluster. The largest industry in the information technology cluster is business support services. This industry has grown at a steady pace of over 63.0 percent since 2000. The Huntsville area is the prime location for IT industries in the state. The fact that the baby boomers are retiring and people are living longer is having a large impact on the health care system. Additionally, there are many more specialized jobs in healthcare than in the past, because healthcare costs have risen, and so has demand for healthcare. While hospitals have experienced small but steady growth every year since 2010, most of the growth in health care employment comes from industries that provide more focused care. Industries such as outpatient care centers, home health care services, and specialized health practitioners have doubled in employment since 2010. In addition, employment in residential disability, mental health, and substance facilities have grown 226.0 percent since the turn of the century. Continuing care retirement and assisted living facilities have also doubled in employment.  Furthermore, as the population ages, so does the workforce in the health care industry. In 2018, 21.0 percent of the health care workforce was over the age of 55. With the projection, for the period 2016-2026, of nearly 60,000 new jobs in health care, combined with an increasing number of workers retiring, the demand for healthcare workers will continue to increase.

One of the industries within the healthcare sector that has experienced a large amount of growth is individual and family services. According to a study published in 2018 by the National Center for Health Workforce Analysis, the nation is beginning to experience a severe shortage of qualified workers in these fields, mainly due to the increase of individuals with mental health and substance abuse problems who are seeking treatment. While Psychiatrists are not classified in this particular subsector of healthcare, the shortage for these professionals is problematic. According to the 2019 Occupational Employment and Wage Survey conducted by the Alabama Department of Labor in partnership with the US Department of Labor, Bureau of Labor Statistics, there are only 130 psychiatrists in the entire state. Individual and Family Services consists of various counselors such as school counselors, healthcare social workers, residential advisors, substance abuse counselors, etc.  Since 2016 employment in this industry has grown only 3.1 percent, while the need continues to grow at a much faster pace.

Alabama is targeting industries that are associated with enabling technology due to the increased use of nanotechnology and robotics used in many of the large automotive production plants in Alabama and surrounding states. AIDT manages a robotics technology park. The park consists of three training facilities that are each targeted to a specific industry need. While the industries associated with this cluster show minimal growth thus far, over 1,000 additional jobs have recently been announced specifically for this cluster. Many of the new manufacturers in the state employ the use of robotics and other advanced technology. An Air Force innovation hub, MGMWERX, began operations in Montgomery in 2018. MGMWERX is a partnership with the Air Force Research Laboratory to solve technological and efficiency challenges within the military. 

Cyber Security is another emerging industry that overlaps with the enabling technology cluster.  Huntsville in North Alabama is home to the second-largest research park in the United States, Cummings Research Park, with over 400 Fortune 500 companies, local and international high-technology enterprises, and US space and defense agencies. Cummings Research Park also includes a thriving business incubator and competitive higher education institutions. The Air Force created a cyber college headquartered at Maxwell Air Force Base in 2016. The capacity of the cyber security training reaches airmen around the world. It brings in both local and external experts in cybersecurity to teach these courses. Many of these experts come from the Maxwell-Gunter Annex in Montgomery, where IT and cyber security services are provided to the U.S. Air Force. Due to the military’s needs for cyber training, Montgomery became the first of four cities in the Southeastern United States and the first in the state, with an Internet Exchange. Furthermore, Maxwell, in partnership with the City of Montgomery, the Montgomery County, and the State of Alabama are planning to build an innovation center, which will be a place where leading experts from across the country in technology advancements can collaborate with the military.

The average monthly wage across all industries in the state was $3,817. New hire monthly earnings averaged $2,489, or 65.2 percent of the average monthly wage. The highest average monthly wages were for professional, scientific, and technical services at $6,146; utilities at $6,124; mining at $6,116; and finance and insurance at $5,486. Accommodation and food services paid the least at $1,620. Mining had the highest average monthly new hire wage at $5,411. Mining is followed by professional, scientific, and technical services at $4,877 and utilities at $4,649. Accommodation and food services paid newly hired workers the least at $1,163. The leading industries did not necessarily provide the highest wages. Of the top five employers, only manufacturing paid wages above the state average. The highest wages were in smaller industry sectors—mining; professional, scientific, and technical services; utilities; and finance and insurance.

In 2013, the Alabama Department of Labor conducted a skills survey of over 5,000 employers in the manufacturing, construction, and utilities sectors. The most significant common need among the sectors is employability skills training. Employers also face attendance problems. In addition, employers are not hiring candidates for open positions because the candidates could not pass a drug test. Since employers only perform drug tests on individuals they believe to be viable, qualified candidates, it is conceivable that these are skilled people whose barrier to employment is substance abuse.

The seven regional workforce councils in the state are charged with connecting industries in the region with the public workforce system to assist them with their hiring needs for trained, skilled workers. Many of these regional councils conduct industry-specific regional planning meetings with business leaders to determine the in-demand occupations in each region so the councils can connect with educational providers in the area to provide training to fulfill those needs. In 2016, only 32 percent of jobs were in occupations that typically require formal postsecondary education for entry.  Within this group, jobs in occupations that require a bachelor’s degree for entry held the largest share at 18 percent. Occupations requiring a high school diploma or equivalent and less than high school made up 68 percent of jobs in 2016. All occupations requiring postsecondary education are projected to grow faster through 2026 than the state's total average growth at 9.1 percent. Occupations requiring postsecondary non-degree award or associate degree are expected to grow 10 percent through the 2016-2026 period. When categorized by on-the-job training levels, internship/residency jobs are expected to have the most growth over the period at 11.7 percent.