Birmingham Uses Labor Data Analysis to Build a Stronger Workforce

It’s important for regions to have modern, skilled workforces and ensure they have outside dollars coming into the community. With a new report released today, we analyze the job market of the Birmingham, Ala., region and provide a foundation for local leaders as they use real-time labor data to guide their community’s decisions and improve their workforce.

The Bold Goals Coalition of Central Alabama commissioned Burning Glass Technologies and the Council for Adult and Experiential Learning to conduct a joint economic development and labor market analysis to examine the issues and opportunities facing the region. With these insights, the coalition is launching the “Building (It) Together” public engagement campaign to present the findings and engage the public on ways to build a strong mix of industries while providing workers with wages that can sustain a family.

Shifting Birmingham’s Focus from Local to Global

Economists speak of “traded” industries that operate in national or international markets, and “non-traded” industries that are purely local. The key industries of Birmingham are non-traded businesses that involve economic activity within the region, rather than bringing in wealth from outside. Specifically, the local economy relies heavily on Health Care and Retail, which do not attract dollars from outside the community. As a result, the region is missing out on the opportunities available in an interconnected world.

As you can see by the table below, Birmingham is behind neighboring cities and the national average when it comes to traded industries.

Region % of Employment in Traded Industries
New Orleans30.8%
National Average36.0%

To expand into global markets, the report recommended Birmingham focus on two key areas:

Expansion of Employment Opportunities

Expanding high-skill employment opportunities within growing traded sectors, such as international automotive manufacturing, can increase opportunities for advanced manufacturing workers.

Industry Growth

Promoting growth in new industry areas can build upon the strengths of the local workforce and graduates from local institutions. This includes using the region’s strengths in the Health Care industry to expand into life sciences and biotechnology.

Building a Stronger Workforce

The report found Birmingham’s current demand for workers leans heavily toward low- and middle-skill jobs when compared to the nation and to similar cities (as seen in chart below). This reflects the relatively high concentration of retail and transportation industries, which commonly hire large numbers of low-skilled workers such as cashiers and drivers. This dynamic presents unique problems in a digitizing world, as these positions are among those that are growing the slowest, present the greatest wage stagnation, and are at the highest risk of automation in the coming years.

In order for Birmingham to develop new traded industries, the region requires workers with the skills that those industries need in order to expand. Regional leaders, including educators, employers, and policy makers, need a deep understanding of the existing workforce, the skill sets that will be required in the future, and the gaps which will need to be addressed. There are several areas where Birmingham plans to focus in order to prepare its workforce to meet the needs of these new industries.

The coalition plans to invest in workforce training for target industries, such as IT, Engineering, and Skilled Production. Coalition efforts will also focus on creating a stronger pool of bachelor’s-level science workers. Increased and better aligned investments in training, both traditional and non-traditional, in these currently undersupplied areas will be crucial to success.

RegionLow SkillNon-Digital Middle SkillDigital Middle SkillHigh Skill
Atlanta, GA18.7%7.5%36.9%36.9%
Birmingham, AL24.0%15.9%38.7%21.4%
Nashville, TN24.0%6.1%41.4%28.5%
New Orleans, LA27.7%6.5%41.6%24.2%
National Average21.0%8.0%38.0%33.0%

Read the full report Building (It) Together: A Framework for Aligning Education and Jobs in the Greater Birmingham Region to learn more about how Birmingham plans to improve their economy.

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