Alabama’s unemployment rate climbed to 12.7 percent in April, the highest level recorded in the state in 37 years, according to figures released this week by the U.S. Bureau of Labor Statistics. The last time joblessness reached a comparable level was in October 1983, when the rate hit 12.8 percent.
The federal figure translates to 283,787 people out of work statewide, based on household and business surveys conducted during the week of April 12-18. But state officials say the true scope of the crisis is even larger. The Alabama Department of Labor’s own weekly claims data shows nearly 500,000 residents have filed for unemployment benefits since the COVID-19 pandemic forced widespread business closures in mid-March, a total that represents roughly 21.5 percent of the state’s more than 2.2 million-person civilian labor force.
The impact has hit south Alabama especially hard. In Baldwin County, 24,965 residents have filed unemployment claims since March 14, amounting to 26 percent of the county’s labor force. Mobile County has seen an even steeper toll, with 48,643 filings over the same period, or 26.1 percent of its workforce. Both counties are running well above the statewide average, underscoring how deeply the pandemic-driven shutdown of tourism, hospitality, retail and service industries has cut into the region’s economy.
The swing is especially stark given where the state stood just months earlier. In February, before the coronavirus reached Alabama, the unemployment rate sat at a historic low of 2.7 percent.
Gov. Kay Ivey addressed the report in a statement, acknowledging the toll the shutdown has taken on workers while defending the state’s response. “While we are certainly disappointed to see our unemployment rate rise so sharply this month, it’s not surprising,” Ivey said. “This global pandemic and national disaster has certainly impacted Alabamians’ ability to work. We know that hundreds of thousands of people have filed for unemployment benefits over the past two months, and we’ve been able to process and pay a great majority of those. We realize there are some still waiting on relief, and we hear and understand their frustration. Please rest assured that my administration is working tirelessly to provide relief to those Alabamians and their families, and I have the utmost confidence in the Alabama Department of Labor and the dedicated state employees there who are working tirelessly to serve their fellow citizens.”
There are some signs the worst of the initial wave may have passed. New unemployment filings spiked between March 28 and April 25, peaking at 102,384 claims during the week ending April 4. Since then, weekly filings have steadily declined, and for the past three weeks no more than 25,000 Alabamians have filed for unemployment statewide in any single week, suggesting the initial shock of business closures has largely worked its way through the system even as the overall unemployment rate remains elevated.
State labor officials also reported this week that more than $1 billion in COVID-19 related unemployment compensation has already been disbursed to Alabama workers. The payments span all three federal programs created under the CARES Act: Federal Pandemic Unemployment Compensation, Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation. In total, $1,007,106,963 has been paid to 267,357 claimants for the period covering March 16 through May 18, covering 1,287,026 weeks of benefits. The Alabama Department of Labor said it has issued payments to 88 percent of those who have filed active COVID-19 related claims since March 16.
ADOL Communications Director Tara Hutchinson said the state’s Unemployment Insurance Trust Fund, which is separate from the federal CARES Act money, has paid out roughly $76 million since the pandemic began and held a balance of $539 million as of last Friday.
Alabama Labor Secretary Fitzgerald Washington said the numbers reflect an economic setback unlike any the state has seen in decades. “I think everyone will agree that these numbers aren’t numbers we ever wanted to report,” Washington said. “This pandemic has negatively impacted Alabama’s economy and in two months’ time has managed to undo years of positive progress. But the impact to our employers and workers who carry the economy is even greater. So many had life altering changes that impacted their families almost overnight. I want all Alabamians to know that we are working nonstop to help move this recovery along. We are developing new technologies, adding staff, and making modifications wherever possible to help our workers through this enormously difficult time.”
Beyond the headline unemployment rate, the state’s wage and salary employment numbers paint a fuller picture of the damage. Total wage and salary employment fell by 201,700 jobs in April alone. The steepest monthly losses came in leisure and hospitality, which shed 79,500 jobs, followed by professional and business services (down 29,500), education and health services (down 26,400) and manufacturing (down 24,200).
Measured over the full year, wage and salary employment in Alabama is down 199,200 jobs, with leisure and hospitality again absorbing the largest share of losses at 87,900 jobs, followed by professional and business services (down 30,800), education and health services (down 25,300) and manufacturing (down 19,100).
State officials say they expect the unemployment rate to remain volatile in the coming months as businesses navigate reopening plans and workers who were furloughed or laid off attempt to return to their jobs. For now, the Alabama Department of Labor says it continues to process new and backlogged claims while urging residents who have not yet received benefits to keep filing weekly certifications so their claims remain active.