News from the Tennessee Valley Business

Alabama’s growth
not for all

Low unemployment rates and lots of headlines on industries recruited to the state leave us with the sense that Alabama is in an economic upswing.

A report last week by the nonprofit Arise Citizens’ Policy Project is a harsh reminder that most citizens are not sharing in the largesse. The report was a compilation of statistics by the U.S. Census Bureau and other respected data-gathering agencies.

Despite the state’s successful efforts to attract industry, manufacturing jobs are down. Median hourly wages are flat and household income is falling. Tuition and health insurance are less reachable for most Alabamians than they have been in the past.

In 2005-06, Alabama’s median household income dropped to $38,160, about $10,000 less than the national average. It’s a decline that has held disturbingly steady since 1999. Median wages have remained essentially flat for several years.

The most alarming statistics in the Arise report make clear that workers are not among the beneficiaries of Alabama’s recent economic success.

Even as workers’ wages remain stagnant, their productivity has gone up. The state’s gross domestic product has jumped 18 percent since 2001. During the same period, median wages have increased only 7 cents per hour, to $13.44. Wages actually dropped 61 cents per hour between 2005 and 2006.

While household incomes are heading down in Alabama, the means to lift income in the future is increasingly out of reach. Tuition costs at four-year state schools have increased 78 percent in the last 10 years.

Between 2005 and 2006, the percentage of Alabama children (under 18) without access to health insurance skyrocketed by 64 percent, Arise reports, reversing advances in recent years.

The percentage of uninsured adults also climbed from 2005 to 2006. In 2006, according to the census figures relied upon by Arise, 15.2 percent of adult Alabamians had no health insurance.


Another report issued last week, this one by the Mortgage Bankers Association, provided data to back up the widespread panic over home foreclosures. Alabama has plenty to worry about, the figures suggest, but generally is in better shape than other Southeastern states.

At 6.23 percent, Alabama is among the worst states in terms of the percentage of mortgage loans past due. Look at the seriously delinquent loans, however, and Alabama is in the middle of the pack with 2.42 percent. Seriously delinquent loans are those either in the midst of foreclosure or are more than 90 days overdue.

The numbers are predictably uglier for subprime loans. Almost one in 10 subprime loans in Alabama is seriously delinquent. Seventeen percent is past due.

The most frightening figure, both in Alabama and elsewhere, involves the delinquency rates for subprime adjustable rate mortgages. Even in a low-interest environment, 13 percent of Alabamians with this type mortgage are seriously delinquent and 22 percent are overdue in their payments.

If fears that interest rates will climb are valid, a troubling statistic could become a statewide crisis.

Contact Eric Fleischauer at

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