Mixed Economic News
August 6, 2007
First, the good news. According to recent reports in the Birmingham News, Alabama is experiencing an economic boom and individual workers look to benefit.
This first article describes a low unemployment rate, a growing industrial sector, and a growing gross domestic product, all which outpace national averages. A second article indicates that wages are on the increase in our state, growing by 4.7 percent in 2006 over the previous year.
That all bodes well for families who are struggling, in large part, because of inadequate wages. The question for some may remain, however, whether the state is producing a workforce adequate for the “high end” industrial jobs becoming available. Our educational system needs to keep up with this kind of demand.
And then there is the bad news. According to this article from Cincinnati, Alabama is seeing a growth in bankruptcy filings. This is a trend in the southeast, unlike the rest of the country. Whether this is a result of purely economic reasons, or the culture among legal professionals who are encouraging the practice (as the article suggests), this number merits watching, especially as we see economic growth.
Measuring Severe Poverty
Low wealth, like every other segment of the economic spectrum, can be subdivided into smaller categories. Here’s an article that speaks of those in this country who can be described as “severely poor,” defined as those who live at half the poverty income rate. According to this study of the 2000 and 2005 census figures, these numbers are rising, reaching a 32-year high.
Most disturbing is that those who are poor already are becoming poorer: “While the rate of new entrants moving into poverty is somewhat stable, those who are becoming truly poor are increasing at a rate 56% higher than the growth rate of new entrants into poverty.”
The Perspective on Alabama
Sometimes it’s helpful, if embarrassing and/or frustrating, to read about Alabama from the perspective of someone outside the state. Here’s an article that reports the frustration that some taxpayers in Oregon feel when they realize that they receive back relatively little in federal moneys relative to the taxes they pay.
Telling here, for me, are the comments from the director of the Oregon Economic Forum. He says, basically, that those who have the most income can and should expect this kind of outcome. It’s just the way things should work. Beyond that, he says, is the issue of self-image. How do we want to see ourselves? Pointing to Alabama and West Virginia, who receive far more in federal dollars than we send to Washington, Tim Duy says, “Look at the states that are big recipients of federal dollars relative to taxes paid. Do you really want to be a welfare state? Is this something Oregonians want to achieve?”
Just where do we rank in this area? According to these figures from 2004, we are number six nationally, receiving $1.71 for every dollar of federal taxes spent.
This is certainly not to say that Oregon has all its poverty problems licked. Check out this interactive map that indicates they are 17th nationally in poverty with a 14.1% poverty rate.
But just how do we feel about being described as a “welfare state?”
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