Checking Alabama’s ‘status’: HB 56 no cure for a sick labor market

The evidence continues to mount that HB-56, Alabama’s extreme anti-immigrant law, is anything but the economic cure-all that proponents claimed it would be. In fact, the economic data suggest that the law is only exacerbating the state’s stagnating economy and setting Alabama up for even greater trouble down the road.

As Figure A shows, Alabama’s employment levels have essentially flat-lined since the end of the recession. HB-56, the law that would allegedly “free up jobs for other Alabama workers” and “put thousands of native Alabamians back in the work force” has done nothing to jump-start job growth. Table 1 shows the change in employment from Sept. 2011, the month before the law went into effect, to Aug. 2012. With the exception of Mississippi, which lost employment, Alabama had the slowest job growth in the region over the period—less than half the rate of job growth for the nation as a whole.

Table 1 Table 1 (continued)

Total nonfarm employment, United States, Alabama and nearby states, Sept. 2011–Aug. 2012

State Sept. 2011 Aug. 2012 Change Sept. 2011 to Aug. 2012 Percentage change
UNITED STATES  131,694,000  133,300,000 1,606,000 1.22%
Alabama      1,865,700      1,876,100 10,400 0.56%
Arkansas      1,154,700      1,167,700 13,000 1.13%
Florida      7,286,300      7,348,300 62,000 0.85%
Georgia      3,885,800      3,937,700 51,900 1.34%
Kentucky      1,793,700      1,831,200 37,500 2.09%
Louisiana      1,926,400      1,946,700 20,300 1.05%
Mississippi      1,092,400      1,081,500 -10,900 -1.00%
Tennessee      2,664,700      2,683,100  18,400  0.69%

Note: All figures are seasonally adjusted.

Source: Local Area Unemployment Statistics (LAUS) from the Bureau of Labor Statistics.

What about claims that recent reductions in Alabama’s unemployment rate “absolutely, directly coincide with when [the] law went into effect”? Table 2 shows the change in Alabama’s unemployment rate from Sept. 2011 to Aug. 2012. It’s true that Alabama’s unemployment rate has gone down over this period, but it has gone down less than the national average and less than all of its neighbors other than Louisiana, where the unemployment rate was already far lower than rest of the region.

Table 2 Table 2 (continued)

Unemployment rate, United States, Alabama and nearby states, Sept. 2011–Aug. 2012

Sept. 2011 Aug. 2012 Change Sept. 2011 to Aug. 2012
UNITED STATES 9.0% 8.1% -0.9%
Alabama 8.8% 8.5% -0.3%
Arkansas 8.1% 7.3% -0.8%
Florida 10.4% 8.8% -1.6%
Georgia 9.8% 9.2% -0.6%
Kentucky 9.5% 8.5% -1.0%
Louisiana 7.2% 7.4% 0.2%
Mississippi 10.9% 9.1% -1.8%
Tennessee   9.1%  8.5%  -0.6%

Note: All figures are seasonally adjusted.

Source: Local Area Unemployment Statistics (LAUS) from the Bureau of Labor Statistics

Moreover, the drop in Alabama’s unemployment can’t be attributed whatsoever to job growth. The Alabama population grew by almost 20,000 over those 12 months while the state added only 10,000 new jobs. Why the lower unemployment rate? Because over the same period, Alabama’s labor force (i.e., those working or looking for work) shrank by 25,000 people.

Table 3 Table 3 (continued)

Labor force level, United States, Alabama and nearby states, Sept. 2011–Aug. 2012

Sept. 2011 Aug. 2012 Change Sept. 2011 to Aug. 2012 Percentage change
UNITED STATES  154,004,000  154,645,000 641,000 0.42%
Alabama      2,183,012      2,158,400 -24,612 -1.13%
Arkansas      1,369,532      1,379,300 9,768 0.71%
Florida      9,265,041      9,261,200 -3,841 -0.04%
Georgia      4,731,276      4,760,800 29,524 0.62%
Kentucky      2,066,380      2,068,600 2,220 0.11%
Louisiana      2,053,935      2,076,200 22,265 1.08%
Mississippi      1,347,911      1,333,100 -14,811 -1.10%
Tennessee      3,133,236      3,110,200   23,036   -0.74%

Note: All figures are seasonally adjusted.

Source: Local Area Unemployment Statistics (LAUS) from the Bureau of Labor Statistics

Figure B shows changes in Alabama’s labor force over the past two years. Notice what happens when Alabama lawmakers first introduce HB-56 and when enforcement begins: a steadily increasing labor force begins to shrink as the anti-immigrant legislation is first proposed, and the numbers fall dramatically when the law goes into effect.1 This change in direction for Alabama’s labor force level likely cannot be attributed directly to the bill’s introduction—at least not entirely. But in the wake of Arizona’s SB 1070, it’s reasonable to think that heightened concerns among Alabama’s immigrant community could have accelerated a brewing trend. Since enforcement began, the law has likely succeeded in scaring away undocumented workers, but likely also their families, their U.S.-citizen children, and their documented-yet-still-harassed immigrant peers. And in doing so, the state has driven out vital consumers, taxpayers, and small business owners.

Proponents of the law might argue the timeframe I’ve described is unfair since the law’s E-verify component —requiring all state employers to enroll in the federal employment eligibility verification system—only came into effect in April. So what happened to Alabama’s unemployment rate since April? It jumped by more than a percentage point, while the national rate slightly declined.

Table 4 Table 4 (continued)

Unemployment rate, March 2012–Aug. 2012

March 2012 Aug. 2012 Change
UNITED STATES 8.2% 8.1% -0.1%
Alabama 7.4% 8.5% 1.1%
Florida 9.0% 8.8% -0.2%
Georgia 9.0% 9.2% 0.2%
Kentucky 8.6% 8.5% -0.1%
Louisiana 7.1% 7.4% 0.3%
Mississippi 9.0% 9.1% 0.1%
Tennessee 7.9% 8.5% 0.6%

Source: Local Area Unemployment Statistics (LAUS)

If these trends continue, the prospects for Alabama’s economy, its state budget, and its remaining “native population” are grim. But once lawmakers have run out of groups to scapegoat they will have only themselves to blame.


Endnotes

1. The abrupt drop in Alabama’s labor force numbers from Dec. 2012 to April 2012 and the similar drops for Mississippi and Tennessee suggest some statistical aberrations in the Bureau of Labor Statistics’ labor force series for this period, but the overall trend remains. From March 2011 to Aug. 2012, the Alabama labor force shrank dramatically in comparison with the rest of the region.