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Local governments, businesses having trouble hiring in tight labor market

Alabama unemployment dropped to 3.3 percent in June, Gov. Kay Ivey announced Friday morning.

The figure underscores what local governments and business owners already know: Hiring right now is hard, because the supply of labor is short.

“Everywhere you go, there’s a sign in the window that says ‘hiring,’” said Anniston Parks and Recreation director Frazier Burroughs.

Parks and Recreation is just one of the city agencies feeling the crunch of a tight labor market. At Cane Creek Golf Course, a shortage of workers caused the golf course restaurant to change its hours because too few workers were available. 

It’s all because of an economy that, by most accounts, is roaring back to pre-pandemic levels. In June 2020, with many businesses still under some form of COVID-19 restriction and hospital beds beginning to fill with coronavirus patients, the state posted an unemployment rate of 7.7 percent.

By May of this year, the unemployment rate had plummeted to 3.4 percent, a low number even for good economic times. The June numbers show an additional slight month-to-month drop, at least according to the numbers in Ivey’s Friday release.

“The drastic changes we’ve seen since last year are truly remarkable and are a testament to the dedication and work ethic of Alabamians,” Ivey was quoted as saying in a Friday morning press release.

The numbers aren’t as simple as they appear. The 3.3 percent figure for June is a “seasonally adjusted” number — smoothed out to reflect seasonal changes in hiring.

Most of the other data released by the Alabama Department of Labor shows the state losing a few jobs from May to June, with unemployment ticking up slightly.

“It’s very typical for the month of June, when schoolteachers are off,” said Ahmad Ijaz, a forecaster for the Center for Business and Economic Research at the University of Alabama.

Employment always drops in the summer months, Ijaz said, which is one reason state officials typically present the smoothed out “seasonally adjusted” figure as an accurate picture of the economy.

No matter which set of numbers you use, they show a tight labor market. Within Anniston city limits, unemployment was 6.1 percent in June — not a terrible number, in more normal economic times, but higher than most Alabama cities. In Alabaster, the jobless rate was 2.4 percent. In Hoover, 2.6 percent. 

Some of the state’s biggest job gains were in the “leisure and hospitality” sector hit so hard by COVID in 2020. Non-adjusted numbers show that sector — which includes restaurants — picking up about 8,000 new positions from May to June.

Signs of that surge have popped up recently in Oxford, where new Chick-Fil-A and Chipotle restaurants have opened recently. Texas Roadhouse this week announced plans to hire more than 250 people for its new Oxford restaurant set to open in September.

“So far we’re seeing a pretty good pool of applicants,” said David Conner, service manager for the restaurant. He said the newness of the restaurant has helped attract attention. One challenge in the tight labor market, he said, is finding people who are willing to wait until closer to the September opening to start work.

The labor shortage often pops up in conversations between public officials. At this week’s meeting of the Calhoun County 911 Board, board members mentioned difficulty finding qualified paramedics available to work. At budget hearings this week, the Anniston City Council discussed a possible 2.5 percent raise for city employees, plus bonuses to recruit people to the police force, where the city now has 16 unfilled positions.

The shortage has exerted some upward pressure on pay. According to Labor Department numbers, the average wage in the Anniston metro area went up from $20.92 per hour in May to $21.59 in June.

“Pay definitely helps, but businesses have their limits, as well,” Ijaz said. He said business owners are likely weighing pay increases against their own expenses post-pandemic.

If the upward pressure continues, he said, it’s likely to contribute to inflation. Prices are already rising, he said, though it’s not clear how far the trend will go.

“It’s difficult to say if this is a transitional phenomenon,” Ijaz said.

The unemployment data also shows that the rising employment tide hasn’t lifted all boats. In Wilcox County, in the Black Belt, June unemployment was 10.4 percent, according to the Friday morning numbers.

Capitol & statewide reporter Tim Lockette: 256-294-4193. On Twitter @TLockette_Star.