It is time for action to boost the economy
Johnny Mack Morrow
Franklin County Times
"These are the times that try men's souls," wrote Thomas Paine in the middle of the most difficult time in the American Revolution.
He might as well have been writing about our own time.
We are all concerned about the present and the future. There is seemingly no good news, and all indications are things will get worse before they get better.
Alabama's unemployment rate is the highest since 1993, jumping to 6.7 percent in December, up from 6.0 percent in November, and economists say it's likely to keep going up. While the numbers are of great concern, things are worse elsewhere.
Alabama's rate remains below the national unemployment rate of 7.2 percent, and we are better off than our neighbors. Florida and Georgia announced jobless rates of 8.1 percent and Tennessee 7.9 percent.
Every sector of the economy has been taking a hit. There are slowdowns in every auto plant in the state. Layoffs in the financial industry are at all time highs. Alabama manufacturing had one of its sharpest declines in decades.
Construction has slowed greatly, with the decline lead by residential housing starts. The only bright spot in the past year was agriculture, where the yields were up and prices did not tumble.
State officials believe Alabama's economic output this year could range between a negative 1.5 percent to a positive 0.7 percent, with employment gains or losses and government tax collections falling in the same range.
The deepening recession is taking its toll on families. Unemployment claims are up, yet Alabama's unemployment insurance payments are some of the lowest in the nation. Alabama started this year with more than 35,000 additional families asking for food assistance than a year earlier, an increase of 16 percent.
According to state officials, the vast majority of these families have been people who have not gotten food stamps before. There are more folks receiving food assistance now than there were in the terrible recession in the early 1980s.
It is tough, but in Alabama there are some things that continue to indicate that things may turnaround in the near future. The German steelmaker ThyssenKrupp is building a $4 billion stainless steel plant north of Mobile.
ThyssenKrupp recently announced it will delay the opening of its stainless steel operation at the massive complex for about a year, but there are no delays planned for the much larger carbon steel unit on the same site. The plant should be on-line in early 2010 and employ thousands of workers.
In north Alabama, the military will be relocating thousands of jobs to the Tennessee Valley in the Base Realignment and Closure commission, known as BRAC. This is in addition to building the massive Alabama National Railcar plant in the Shoals.
State officials and economic experts believe that Alabama is better situated than most to weather the storm. But tell that to a family that had to apply for food stamps for the first time. The economy needs help.
The $825 billion economic stimulus package proposed by the new administration is focused on direct assistance to families and the states. Alabama could get more than $3.2 billion spread over more than two years from the stimulus package now moving through Congress. State government spends about $11 billion a year on critical services, so this new infusion would be a huge shot in the arm.
The current version of the stimulus package would provide Alabama with $960 million for budget stabilization, helping everything from state troopers and prisons to the mentally ill. Other amounts could be $798 million for Medicaid to maintain the state's healthcare system, $560 million for highways, $218 million for construction of schools for kindergarten through 12th grade, $207 million for K-12 special education, and $203 million for Title 1 programs for lower-income K-12 students.
If this package passes, it could help keep more people from losing jobs, and more jobs will be created.
Nobody likes to look to Washington for help, but these surely are times that try our souls, and any assistance to stave off the worst will make the recovery that much quicker, and help thousands of deserving families get back on their feet.
Johnny Mack Morrow is a state representative for Franklin County. His column appears each Wednesday.