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ALABAMA’S AND MARYLAND’S SIMILAR BLACK UNEMPLOYMENT RATES MASK
MAJOR DIFFERENCES IN LABOR MARKET CONDITIONS  
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Chandra Childers and Valerie Wilson
May 23, 2024
Economic Policy Institute
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_ If Black unemployment rates are so similar in both states, why are
employment-to-population ratios so different? Because of fundamental
differences in each state’s approach to social and economic policy.
_

Maryland and Alabama similar unemployment rates very different labor
markets for Black workers,

 

 Nationally, the Black unemployment rate remains below historic
norms, averaging 6% in the first quarter of 2024
[[link removed]].
Since 2019, two states—Maryland and Alabama—stand out as
consistently having Black unemployment rates below the national
average. Among states where Black workers comprise at least 5% of the
labor force, the state with the lowest Black unemployment rate has
been either Maryland or Alabama for the last 13 quarters (back to 2021
Q1). In fact, these two states have had the lowest and second lowest
Black unemployment rates (not always in the same order) for eight of
the last nine quarters (from 2022 Q1 to 2023 Q4).

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Despite the remarkable similarity in unemployment rates shown
in FIGURE A, Black workers in Maryland and Alabama may not be as
equally well off as they appear to be. FIGURE B reveals that between
2018 and 2023, a much larger share of Maryland’s Black population
was employed than Alabama’s. In 2023, the employment-to-population
ratio (EPOP) in Maryland was 64.6%, compared with just 55.5% in
Alabama and 59.6% for the United States as a whole. 

If Black unemployment rates are so similar in both states, why are
employment-to-population ratios so different? Because of fundamental
differences in each state’s approach to social and economic policy.
While Alabama adopts the Southern economic development strategy
[[link removed]], for example, Maryland does
not. This strategy seeks to disempower workers—especially Black and
brown workers—to ensure employers can extract their labor for as
little compensation as possible. In practice, this translates to
higher rates of incarceration in Alabama than in Maryland, especially
for Black men. Alabama has no minimum wage, compared with Maryland’s
$15 per hour wage floor. Alabama lacks pro-worker, family-supportive
labor policies like Maryland’s paid sick days and paid family and
medical leave laws. And Alabama underinvests in public services.

Each of these policy decisions limits job opportunities that support a
decent standard of living and can lead workers to become discouraged
and leave the labor market. Since workers who leave the labor market
are no longer counted as unemployed, the Southern economic development
strategy may be artificially lowering Alabama’s Black unemployment
rate. To underscore how vastly different labor market conditions are
for Black workers in two states with similarly low unemployment rates,
we compare these components of the Southern economic development
strategy in Alabama versus Maryland. 

Alabama incarcerates more of its residents

FIGURE C shows that Alabamians are incarcerated at a rate that is 1.4
times higher than all Americans and 1.7 times higher than
Marylanders.1
[[link removed]] This
is remarkable given that the United States as a whole
already incarcerates its citizens at a rate higher than any country
in the world [[link removed]]. It is
not just that Alabama imprisons more of its residents than Maryland
does, Black Alabamians are highly overrepresented in the prison
population. 

According to data from the Prison Population Initiative, in 2021 just
26% of Alabama’s resident population was Black compared with 43% of
its jail population and 53% of its prison population
[[link removed]]. Maryland also
incarcerates Black residents at a disproportionately high rate—Black
Marylanders made up 29% of the resident population of the state
[[link removed]] but were 59% of
Maryland’s jail population and 71% of those in Maryland’s prisons
[[link removed]]. However, since
Maryland incarcerates residents at a lower rate, fewer Black residents
are incarcerated overall: 594 per 100,000 Black Marylanders compared
to 1,014 per 100,000 Black Alabamians are incarcerated in prisons
alone. 

Incarceration disproportionately impacts Black men
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has ripple effects in the labor market for reentering workers
since having a criminal history
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it more difficult to find a job. Ban the box policies
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to reduce the stigma and penalty associated with a criminal record by
eliminating disclosure on job applications and delaying background
checks until later in the hiring process. Maryland
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statewide ban the box policy for both public and private sector
employment, while in Alabama, ban the box has only been adopted for
the city of Birmingham
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While these facts do not establish a causal relationship, a striking
pattern between rates of incarceration and EPOPs for prime age Black
men emerges. Between 2017 and 2021, prime-age (25–54) Black men in
Maryland, where incarceration rates are lower, were an average of 14.9
percentage points more likely to be employed than prime-age Black men
in Alabama. As shown in FIGURE D, 83% of prime-age Black men in
Maryland were employed compared with just 68.1% in Alabama and 75.4%
of Black men nationally. Similarly, Black women were more likely to be
employed in Maryland (78.6%) than they were in Alabama (70.6%) or
nationally (72.5%). 

Large numbers of low-wage jobs do not serve Alabamians and their
families

Another factor distinguishing Alabama’s labor market from that of
Maryland is the quality of available jobs. The Southern economic
development model prescribes that workers are paid low wages and, in
keeping with this, Alabama has no state minimum wage; what applies is
the federal minimum wage, which has been stuck at $7.25 per hour since
2009. In contrast, as of January 1, 2024, Maryland raised its minimum
wage from $13.25 per hour to $15 per hour. 

In December 2023, before Maryland’s $15 per hour minimum wage
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effect, fewer than 10% of Marylanders were paid less than $15 per
hour. But in Alabama, the percentage of workers was 22%: More than one
in five Alabamians were paid less than $15 per hour. 

Many Alabamians lack access to paid sick leave and paid family and
medical leave

In addition to differences in employment-to-population ratios,
incarceration rates, and minimum wages, Alabamians are much less
likely than Marylanders to have access to paid sick leave and paid
family and medical leave—supports which are crucial for balancing
work and family. For example, while 90.8%
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workers in Maryland have access to paid sick leave, just 68.2%
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in Alabama. Again, these dramatically different outcomes reflect
different policy approaches in the two states.

Maryland has an earned sick and safe leave law
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all workers can accrue up to 64 hours of leave time to use for their
own or a family member’s illness and in cases of domestic violence,
sexual assault, or stalking. The law requires employers with 15 or
more employees to provide paid leave, while smaller employers may
provide unpaid leave. Additionally, Maryland Family and Medical Leave
Insurance goes into effect starting in 2026. This law requires all
employers to participate in some form of paid leave insurance offering
workers up to 12 weeks of paid leave
[[link removed](FAMLI)%3F-,%E2%80%8B,or%20simply%20%E2%80%9Cpaid%20leave.%E2%80%9D] for
the birth of a child, their own or a family member’s serious
illness, or to arrange for a family member’s military deployment. In
contrast, Alabama does not require employers to provide workers with
paid family and medical leave. Rather, employers or individuals may
purchase paid family leave benefit policies from private insurance
companies. This approach will undoubtably leave many workers,
especially low-wage workers, without paid leave. For those who are
covered, policies will likely provide fewer weeks of coverage and
lower wage replacement rates
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higher costs. 

Alabama underinvests in the public sector

The private versus public approach to paid leave is emblematic of
broader differences in how the role of government is perceived in
Alabama versus Maryland. These disparate views are clearly reflected
in each state’s willingness to invest in its public sector, even
when the cost is subsidized by the federal government rather than
being paid from state and local revenues. Under the American Rescue
Plan Act of 2021 (ARPA), federal funds were granted directly to state
and local governments. In addition to investments in infrastructure
and public health, other approved uses of these funds included
offering hiring and retention bonuses to fill public employee
vacancies and raising public sector wages. As of September 2023,
Maryland has spent 86% of its total state allocation and increased
public sector employment by 3.5% between September 2022 and September
2023. Alabama, on the other hand spent just 36% of allocated funds and
public sector employment grew just 1.1% over the same period.

These data show that comparing state unemployment rates in isolation
paints a misleading picture. At any level of geography, the
unemployment rate overlooks workers who want a job but aren’t
actively searching due to discouragement, care responsibilities, or
other obstacles. But interstate comparisons of unemployment rates also
fail to distinguish the quality of jobs available and how policy
choices influence these outcomes. Maryland and Alabama provide a
striking example of how policies to support working people, ensure
adequate pay and access to paid leave, and invest in public goods can
help drive higher rates of employment while helping workers to cover
basic necessities like food, rent, childcare, and transportation. 

1. 
[[link removed]]The
overall incarceration rate includes those in prisons, jails, federal
prisons, youth facilities, and involuntary commitments. Prisons and
Jails make up the vast majority of these. 

*source Alabama outline map
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Maryland outline map
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_CHANDRA CHILDERS is a senior policy and economic analyst with the
Economic Analysis and Research Network (EARN) at EPI. Her work is
primarily focused on supporting EARN’s state and local policy
research and advocacy network in the Southern United States. Childers
is committed to economic justice and ensuring that all workers have a
voice in their workplaces and that they experience real economic
security independent of race, sex, or economic status. Using an
intersectional lens, her research focuses on employment, earnings, job
quality, and worker power. _

_Before joining the EARN team at EPI, Childers was a Study Director at
the Institute for Women’s Policy Research, where her work focused on
occupational segregation, the gender wage gap, and Black, Hispanic,
and Native American women’s access to good jobs that pay well,
provide benefits, and ensure economic security for them, their
families, and their communities._

_VALERIE RAWLSTON WILSON (she/her) is a labor economist and Director
of the Economic Policy Institute’s Program on Race, Ethnicity, and
the Economy (PREE), a nationally recognized source for expert reports
and policy analyses on the economic condition of America’s people of
color. As PREE Director, Wilson has worked to elevate EPI’s thought
leadership on issues of racial and economic justice and expand
PREE’s capacity to prescribe policy solutions that center racial
equity. Prior to joining EPI, Wilson served as Vice President of
Research at the National Urban League, where she played a pivotal role
in the production of the organization’s annual signature
publication, The State of Black America, and assisting the historic
civil rights organization in shaping its national economic policy.  
In 2022, she was President of the National Economics Association, an
organization founded to promote the professional lives of black
economists while expanding knowledge of economic issues of particular
interest to communities of color. In 2023, she was elected to become
a fellow of the National Academy of Public Administration.  _

_Throughout her career, Wilson has written extensively on various
issues impacting racial economic inequality in the United
States—including employment, wage, income and wealth
disparities—and has also appeared in major print, television, and
radio media.  Wilson has testified before Congress on racial
disparities in unemployment and earnings and was keynote speaker for
the regional Federal Reserve Banks’ series on Racism and the
Economy: Focus on Employment.  She has twice served on National
Academies panels charged with proposing ways to improve the EEOC’s
ability to measure and collect pay information from U.S. employers in
support of the agency’s responsibility to investigate charges of pay
discrimination. In 2010, through the State Department’s Bureau of
International Information Programs, she was selected to deliver the
keynote address at an event on Minority Economic Empowerment at the
Nobel Peace Center in Oslo, Norway._

_EPI is an independent, nonprofit think tank that researches the
impact of economic trends and policies on working people in the United
States. EPI’s research helps policymakers, opinion leaders,
advocates, journalists, and the public understand the bread-and-butter
issues affecting ordinary Americans.  Donate to EPI.
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* Black workers
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* unemployment
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* Labor
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* Inequality
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* Racism
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