A year ago, Alabama was one of 50 states facing a titanic blow to its economy – a nearly 30% drop in gross domestic product in one quarter – as the coronavirus lockdown crippled entire sectors of the economy.
Shops and shopping centers closed. Restaurants closed. Hundreds of thousands of Alabamians have been made redundant or temporarily lost their jobs. Entire offices moved their business online while workers stayed at home.
A year later, Alabama appears to be in a better position than other states as the United States seeks to recover. Like other restaurateurs, Bob Baumhower had to get creative to stay afloat. He converted his business to take out and deliver groceries while waiting for a small business loan.
“We have reached our last payroll,” Baumhower said. “We had enough money in the bank to pay half the payroll, and then we got approved.”
A year later, Baumhower’s 12 restaurants are operational, including one that opened during the pandemic, and another is underway.
Alabama is ahead of most other states in the speed of its COVID-19 recovery. According to Moody’s Analytics and CNN Business, the state has the fifth-best “back to normal” ranking in the United States, based on its employment and production numbers.
According to the Business and Economics Research Center at the University of Alabama, Alabama’s economy recovered from the coronavirus fall, growing nearly 35% in the third quarter of 2020 and d ‘about 4% in the last quarter. The center predicts 3.1% growth in 2021.
It’s a surprising turn of events. Consider that at the height of the pandemic shutdown in April, Alabama’s unemployment rate stood at 12.9 percent, its highest in nearly four decades and nearly 10 percentage points higher than the preceding month. The pressure on services was evident lLast summer, hundreds of unemployed Alabamians waited for hours for the chance to meet with a representative from the Alabama Department of Labor. This is after weeks of complaints about overloaded phone lines.
But by November, the unemployment rate had fallen to 4.4%, which was closer to the 2.7% recorded by the state a year earlier before the virus.
So what happened? Keivan Deravi, founder of Montgomery Economic Research Services, said Alabama was able to weather the storm because its economy is more focused on producing goods than services. The state gained 6,700 construction jobs and lost just 4,100 manufacturing jobs. At the same time, state and federal governments have not experienced a sharp reduction in their revenues, which would have resulted in cuts in services and employment.
Alabama again recorded a net loss of 34,000 jobs last year. But there is hope for the future. CBER executive director Ahmad Ijaz said the economy is expected to be booming by the second half of 2021, assuming most people will be vaccinated by the second half of the year.
But there has always been damage to the most vulnerable workers in society. A survey conducted by the nonprofit Adelante Alabama at the end of last year among workers earning less than $ 15 an hour showed that despite the pandemic, many low-wage workers still lack access to health insurance, paid vacation or even unpaid time off for sickness, family care or quarantine.
The pandemic has also imposed difficult choices on low-wage workers. Just over half, 57%, said their hours had been reduced due to the pandemic, while 19% were actually more working because of the virus. About 11% said if they did not show up for work they would be made redundant and 11% said they could not work because they had to take care of children or family members.
At the local level, business leaders like Baumhower kept their cool and kept going. Others, like the owners of Birmingham’s Thank You Books, have kept their business going through customer loyalty and ingenuity. The store reopened in the summer of 2020. Customers have returned, said co-owner Elizabeth Goodrich, resisting COVID guidelines and spending money while maintaining a sense of balance.
“For me, the store is a real anchor in all the best ways,” says Goodrich. “I feel better when I’m there, being able to do things that seem normal and routine to me. … We love books and we love people.
You can read the stories of other people affected by the pandemic in the articles below:
To see all the stories of Alabamians affected by COVID, go here.