Getting Alabama’s economy off life support

December 6, 2013 chris
Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedIn

Next year is an election year, and one of the topics you will hear the most about is jobs.

You don’t have to be a politician or a pollster to know that jobs are the number one issue on most voters’ minds – and with good reason!

For the past five years, our economy has been limping along, struggling to create jobs. This fear of what tomorrow may bring has kept investments stagnant and prevented businesses from growing. That, in turn, has led to stagnant job creation.

In fact, if it hadn’t been for exceptionally strong growth in Alabama’s manufacturing industry, our state would have lost more jobs than it created over the past year.

According to the Alabama Department of Labor, since October of 2012, Alabama has only created a net of 300 jobs. While private-sector jobs added about 6,500 new jobs, the public sector (including federal, state and local government employees) lost 6,200 jobs.

Our manufacturing industry is the only thing that saved us. Job losses in almost every other segment of our economy were only made up by exceptionally strong growth in the transportation manufacturing industry. Without the growth in manufacturing, Alabama would have lost more jobs than we created.

In addition to the report from the state Department of Labor, according to the magazine Business Insider, a report from the Federal Reserve Bank of Philadelphia showed that Alabama is one of only five states to have seen our economy shrink over the past year.

Clearly, what we are doing is not working. We cannot continue to gamble on a strategy of paying low wages and giving away more corporate welfare to multinational corporations without job commitments.

While I strongly support targeted tax incentives, I believe those incentives must be done the right way. When we do them the right way, everybody wins. A perfect example is the Mercedes plant in Tuscaloosa. Over the past 20 years, that plant has continued to grow and create jobs. In fact, it is a big part of the transportation manufacturing industry that saved us from being in the red on job creation over the past year.

Doing tax incentives the right way means being competitive, but including clawback provisions so that if the jobs don’t come or if the company closes after a few years the taxpayers will get their money back. 

The wrong way to do it is the way we did it with ThyssenKrupp. We gave ThyssenKrupp $1 billion is tax incentives to build a steel plant in Calvert, near Mobile. The plant was built in 2010, and in 2012 ThyssenKrupp put it up for sale.

Thankfully, it was announced last week that the plant was bought by ArcelorMittal and Nippon Steel and Sumitomo Metal Corp. So, hopefully, we will survive this disaster and bring these jobs back. But we never should have been put in this terrible position in the first place.

If we are smart about recruiting industry and use targeted tax incentives with clawback provisions, we then can create jobs again. But we cannot continue to pursue the same failed policies that we have been following.

A big part of job creation and economic recruitment is focusing on education. It is important that we support not just traditional college education but also vocational training and two-year colleges.

Not everyone wants, or can afford, a college degree. In fact, only 22 percent of Alabamians have a bachelor’s degree or post-graduate degree.

People who learn a trade can make just as much – sometimes more – than those with a college degree. And it can be a much more affordable option for those who cannot afford a four-year degree. We need to do more to support our two-year schools and vocational training.

Education is so important because it not only helps the person being educated but also the community as a whole. Better schools make a community more attractive to potential employers looking to move or expand their businesses. They want to know that the workforce is educated enough to do the jobs they bring. And with the way technology is changing our economy, more and more jobs require better education.

We also need to invest more in our infrastructure. This will create jobs in the short-term, but will also help bring more jobs in the long-term by making our state and local communities more attractive to the businesses we are trying to recruit.

Alabama’s economy has been on life support for too long, and it is clear that our state leaders do not know what to do to turn things around. But the good news is that we can get back on track if we start doing what we know works and start investing in the people of Alabama once again.