Has the local economy recovered from the 2020 slowdown? Has Mobile returned to its long-term trend of business activity? This discussion attempts to answer these questions with the use of three indicators.
The first was employment. The number of employees divided into 10 industries was tracked monthly to measure the trend and changes in each.
The second was the wages and salaries paid by each industry. These numbers reveal the salary structure.
The third is the two multiplied together. The number of employees multiplied by the wages paid produces the Money Available to Spend (MATS). This figure, which is similar to the Purchasing Power figure published by the federal government, provides the basic demand for goods and services.
The results show the following. The two dates in May have been used in government reports as a basis of comparison. May 2012 is used as a new base year for comparison to later years to assess a trend. May 2019 is a new base year to use for comparison to assess the COVID shutdown impact starting in April 2019. October 2021 is the latest monthly figure available.
Trend (May 2012): Employees – 175,400, MATS – $803 million
Pre-COVID (May 2019): Employees – 180,200, MATS – $835 million
Current (October 2021): Employees – 183,800, MATS – $830 million
The current local workforce is 101.9% of the total employees that existed in the base pre-COVID month of May 2019. The current MATS indicator of $830 million is 99.4% of the pre-COVID level of $835 million. This means that the number of employees is slightly higher, and the MATS indicator is slightly lower. The numbers among all 10 industries show that the largest increase in employment is in the Leisure and Hospitality area where the workers do not receive the highest compensation. The employment trend is headed in the right direction. The level of wages and salaries need to increase further.
MATS is a useful and meaningful indicator as it follows changes in employment and wages, which is the objective of economic development efforts by public and private sources. It captures the impact on economic activity caused by local changes in industry employment or wages or both, or new industry in the county.
One reader asked if comparable indicators can be generated for Baldwin County. The answer is no as the data needed is not produced in the same detail by the state or the federal government.
Don Epley, Ph.D.
Professor Emeritus of Finance, University of South Alabama
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