Northwest Alabama Comprehensive Economic Development Strategy Are As Follows

Northwest Alabama Comprehensive

Economic Development Strategy! ! 2012 ! ! ! ! ! ! ! ! !

! ! ! ! ! !

! ! A Strategic Plan for Economic ! Development for the Northwest Alabama Economic Development! ! ! District ! !

! prepared by the ! ! Northwest Alabama Council of Local ! ! Governments (NACOLG) Section and Organization 1.0: Introduction: Process Purpose,

1.0 Introduction: Purpose, Process and Organization

1.1. Comprehensive Economic Development Strategy & Purpose

The Comprehensive Economic Development Strategy (CEDS) is a five‐year strategy for economic development in northwest Alabama. It brings together private and public interests to create a guide to economic development for the five‐county region of northwest Alabama that includes Lauderdale, Colbert, Franklin, Marion, and Winston Counties. The CEDS is designed as a regional comprehensive plan. It involves development district partners, including local government representatives, workforce training providers, non‐profit Chambers of Commerce, local economic development authorities; it encompasses a broad range of important initiatives in order to define the economic development landscape of northwest Alabama and direct the Northwest Alabama Council of Local Governments (NACOLG), which is the regional Planning Organization designated by the Economic Development Administration of the U.S. Chamber of Commerce.

Through analysis of the region’s unique characteristics, the CEDS provides an opportunity to analyze the human and physical capital of the region and establish priorities for investment and funding leading to job creation and retention. The CEDS is the outcome of an on‐going, diverse and inclusive planning process involving both private and public partners. This process allows the formation of a strategy representing the widest possible constituency and presenting the viewpoints of laypeople and professionals as to the direction and character of economic growth in the region. This understanding of economic development priorities allows for targeted investment into economic development initiatives with the broadest support and greatest likelihood of success.

In addition to the broad‐based planning components of the CEDS, the document is required to qualify for federal investments under the Public Works and Economic Development Act of 1965. EDA investments are intended to promote and complement private sector investment in economic development in areas suffering from economic dislocation due to changes in global competitiveness, acute historic economic hardship, or sudden and severe job loss. The document is prepared by a Planning Organization, which is responsible for appointing a Strategy, submitting a compliant CEDS document (see 13 CFR 303.7), updating or revising the CEDS, and reporting the CEDS to other entities. The Planning Organization charged with managing the CEDS process for Region I in Alabama is the Northwest Alabama Council of Local Governments.

1.2 The Planning Organization, CEDS Committee, and CEDS Content

The Northwest Alabama Council of Local Governments (NACOLG) represents the five counties and 32 municipalities of northwest Alabama. Founded in 1967, NACOLG houses numerous planning and governmental service functions, including Aging Services, Transit, Metropolitan and Rural Transportation Planning, and a staff of grant‐writers and planners. Since 2002, the five‐county NACOLG region has been an Economic Development District, the regional designation used by the Economic Development Administration to administer public works assistance, economic adjustment planning aid, and technical assistance. The NACOLG Board of Directors has also served as the Economic Development District Board.

Regulations require that the Board name a Strategy Committee to oversee the development and review of the CEDS. This committee is composed of representatives of public and private organizations including major regional employers, governments, workforce development representatives, labor groups and minority groups. The broadly representative body must be constituted by a majority of private sector representatives chosen from the executive and managerial level employees of for‐profit enterprises. Remaining members represent non‐profit sectors, governments, and higher education.

Regulations also mandate a portion of the content of the CEDS. An acceptable document must include an overview of the economic geography and economic conditions of the region, to include: economy, population, geography, workforce development and use, transportation access, resources, environment and other pertinent data. The document provides an in‐depth analysis of the strengths, weaknesses, opportunities, and threats in the economic development of the region and identifies the topmost regional priorities for implementation.

As a Planning Organization with a number of additional functions, NACOLG encourages CEDS participation on the part of the public, private interests and individuals as a means of identifying priorities for investment. Although inclusion in the CEDS is a requirement for certain federal funding opportunities, NACOLG strongly promotes the CEDS plan and planning process as an opportunity for coordinating additional efforts, such as MPO, RPO and other implementation opportunities. The incorporation of wide regional projects (both short and long term) into one document and into a process of continuous review maintains awareness and increases leverage and opportunity for implementing these projects. The multi‐jurisdictional nature of the CEDS includes in its planning process opportunities for implementation from a comprehensive variety of sources, including local, state and federal agencies and actors and representing private and public sources of investment and implementation resources.

1.3 The CEDS Planning Process: Planning for Partnership

A broad understanding of the direction and long‐term goals of economic development activities is necessary for crafting the strategic building blocks of economic and community development. Under the planning framework for the Northwest Alabama CEDS, the implementation of one or several strategies accomplishes an objective; several related objectives realize a particular goal. From this perspective, the CEDS takes on both short‐ and long‐range significance as the centerpiece economic planning and as the central economic priority‐setting mechanism for the activities of the region’s economic development district. Whether resulting from private or public sources or located within a local, regional or statewide scale, the CEDS’ comprehensive nature is designed to coordinate investment and implementation opportunities and direct these toward the region’s highest identified priorities to sustain economic growth.

Foremost, the CEDS process is meant to be a private‐public partnership with the goal of creating a viable short‐, intermediate‐ and long‐range economic development plan. To this end, the CEDS Strategy Committee met in May 2012. A second essential element of the CEDS review process involved public participation, discussion and feedback. To accomplish this, local level public meetings were held in July and August 2012 in the five counties of the NACOLG region.

1.3.1 Plan Development

The process of developing the plan, which is interactive, exploratory, and informative, is the heart of any plan. The final document plays an important role, encapsulating the discoveries made along the way, but never fully encompasses the significance of planning in terms of capacity‐building and networking. To facilitate this process, NACOLG engaged the development community at four distinct levels: the executive‐level elected officials of the region, represented on the NACOLG/EDD Board; the Strategy Committee, made up of public‐ and private‐sector representatives; development partners identified from the regional community; and the general public. Of these groups, the CEDS Committee, development partners, and the highest elected officials of the various local governments were specifically targeted to encourage the greatest input and feedback. The NACOLG/EDD Board was involved through participation in local level public meetings, particularly in the latter discussions related to specific strategies, and through oversight and adoption of the final CEDS document. Throughout the process, the general public was kept informed through media coverage and Internet publications found at the NACOLG website.

The development of the plan began in January 2012 when a strategy was adopted for producing an economic audit, reviewing existing development efforts (strategies from previous CEDS and the strategic plans of partners and multi‐jurisdictional agencies), and garnering feedback. Data‐gathering began for the conduct of the economic audit portion of the plan (See Section 3) as did the development of the Strategy Committee and partnership structures. Two phases of public meetings and discussions were agreed upon, with the first encompassing the visioning and goal‐setting portion of the plan and the latter to provide an opportunity to review and comment upon specific project proposals to be included as strategies for implementing the plan. The meetings were divided between local‐level public meetings meant to obtain input and review of the plan at the county level and meetings of the Strategy Committee, which was represented the region as a whole and incorporated local initiatives into a broader framework for economic development.

1.3.2 Vision, Goals, and Objectives

The final stage of establishing a framework for economic planning was synthesizing feedback from various meetings and previous planning actions into an ongoing and adaptive framework to plan for economic growth. This was accomplished by establishing a planning framework classifying planning priorities in terms of priorities and time horizons for achievement. These planning activities produced a framework stating goals, objectives, and strategies representing development priorities with different time requirements. All planning activities outlined in the CEDS represent methods of achieving an overall Economic Vision in the following planning framework:

Vision: Statement of the priority or highest accomplishment of the plan.

Goals: What is to be accomplished in categorical terms.

Objectives: What must be done to meet goals, expressed in more specific terms.

Strategic Projects, Programs and Activities: Specific work items for implementing the plan, which are divided into suggested projects and vital projects.

To fill in the layers of this framework, both abstract, value‐oriented positions and concrete, project‐oriented approaches were considered. The Economic Vision was established, which represented the highest order economic values for the region, by reference to the longstanding Vision Statement of the Comprehensive Economic Development Strategy, which was reviewed and very slightly revised in the current five‐year plan. From the various feedback gained, the Economic Vision endorsed by the Board and the CEDS Committee was the following:

Northwest Alabama will continue to be a regional community defined by a distinctive and recognizable identity, high quality of life, strong leadership and public participation, resilience, and unity in pursuit of a sustainable, globally and regionally competitive economy.

Next, the assets and weaknesses were examined for insight into the goals of regional development. These goals were designed to be comprehensive‐ that is, encompassing the broadest range of priorities for economic and community development necessary for economic growth and prosperity. From conversations, feedback, and responses it became obvious that the goals of economic development could not be neatly segregated away from community development objectives. In other words, to support economic development and to provide the employment, wage and industrial opportunities needed, the region must also consider the quality and content of its community development agenda. This meant that regional and local actors must provide for workforce, housing, education, neighborhood and infrastructure developments that were conducive to producing economic opportunities.

Three related goals surfaced this process. These were discussed and endorsed by the Strategy Committee and the EDD Board because of their broad support and repeated iteration in planning meetings. Although prioritized differently at each of the four local levels, Infrastructure (Transportation and Community Facilities), Support for Business and Industry (Workforce Development, Recruitment and Retention), and Community Capacity Development (Planning and Capacity Building) were categories of activities that seemed to capture the essence of much of the interrelated actions needed for regional economic development. These categorical statements were expanded into broader statements and incorporated as development priorities in the CEDS plan. They are described more fully in Section 4.0.

Next, working from concrete proposals to fill in the gaps in the planning framework, strategic projects and activities were examined. These were categorized as either suggested projects, which are important but not directly related to jobs and private investment, or vital projects related directly to economic development through the creation of jobs and private investment. Examining the ways in which these strategic projects tended to cluster provided a framework for establishing the middle tier objectives, or benchmarks, for the CEDS. A summary of Vision, Goals and Objectives is presented below. A review of strategic projects is presented in Section 7.0 CEDS Plan of Action.

Summary

The vision, goals and objectives of the Northwest Alabama Comprehensive Economic Development Strategy are as follows:

Goal I: Infrastructure (Transportation and Community Facilities)‐ Improve the quality of infrastructure in northwest Alabama’s counties, cities, and communities.

Objective (a): Identify and remedy dangerous transportation patterns throughout the region.

Objective (b): Improve regional and local surface transportation networks to increase access to goods, services, markets, and employment opportunities.

Objective (c): Identify and complete improvements to the region’s multi‐modal transportation network to improve local and regional access to goods, services, markets, and employment opportunities.

Objective (d): Identify and complete improvements to infrastructure systems and community facilities that allow for a continued high quality of life by municipal and county residents.

Objective (e): Foster sharing of municipal services and public infrastructure where beneficial to area municipalities and counties.

Objective (f): Seek funding for housing initiatives and neighborhood redevelopment fostering compact commercial and residential forms.

Goal II: Support for Business and Industry (Workforce Development, Recruitment and Retention) ‐ Establish strategies that coordinate public agencies and private entities in a cooperative effort to attract and retain business and industry.

Objective (a): Expand access to and understanding of technology in the region, including communications and workforce/workplace technology required for advanced manufacturing and other business needs.

Objective (b): Identify opportunities to expand workforce development opportunities by coordinating agencies and industries/businesses and implementing appropriate educational/skills development and recruitment programs.

Objective (c): Promote strategies that prepare the region to attract new business and industries, including appropriate workforce and infrastructure initiatives, as a means of attracting higher‐ skill and higher‐wage employment opportunities.

Objective (d): Support the retention and expansion of existing businesses through programs to attract and enhance financial and human resources.

Goal III: Community Capacity Building (Planning and Capacity Building) ‐ Promote quality of life and community identity necessary to leverage the economic benefits of physical and human capital.

Objective (a): Explore the application of asset based economic development principles to the development programs of the region.

Objective (b): Improve resident and visitor recreational and cultural opportunities as a means of facilitating population growth, retention, and increased economic opportunity.

Objective (c): Initiate an urban and neighborhood planning process that provides master plans and infrastructure improvement assessments for municipalities and counties within the NACOLG region.

Objective (d): Promote community resiliency and preparedness for disasters and severe economic shocks, including the preparation of communities and the continuing recovery efforts of communities affected by the April 27, 2011 tornadoes.

1.4 Implementation and Performance Measurement

The CEDS is designed to be a results‐oriented plan that guides the regional planning and development efforts of the Planning Organization in the short term, while establishing practices, policies, and initiatives that will lead to long‐term, transformative development in northwest Alabama. Responsibility for implementing the CEDS rests with the Planning Organization in conjunction with member governments and regional partners. Progress and Performance are defined and measured separately. Progress will be measured with respect to action items included in Section 6.0 and described more fully in Section 7.0. Performance will be measured with respect to the objective criteria found in Section 8.0.

Another significant change to the format of the CEDS has been the separation of strategies into Vital and Suggested Strategies and the choice to further describe these as Action or Awareness items. In order to hold the Planning Organization accountable, the Strategy Committee and EDD Board of Directors chose to identify strategic priorities beyond the authority or direct control of the Planning Organization and to focus instead on accountability for actions within the scope of the agency’s resources and authority. As mentioned above, progress will be measured with reference to the Vital and Suggested Projects while Performance will be measured objectively with reference to the metrics found in Section 8.0.

1.5 Document Organization

The remainder of the CEDS document describes the background for economic planning in Northwest Alabama, including a description of the political and geographic environment (Section 2.0) as well as an economic audit of the region (Section 3.0). Both the background information and the

economic audit are designed to provide relevant, timely material to economic developers throughout the region. The broad array of information, in particular the statistical information of Section 3.0, is meant to be a foundation for further inquiries undertaken by Planning Organization staff and other economic developers. These statements do not represent the definitive conclusions of the Planning Organization or its partners; instead, they are a point of reference and a beginning point for a continuous process of inquiry designed to provide greater understanding of the economic climate, its components, and its effects and the residents of Northwest Alabama. Then, in Section 4.0 the planning framework of the CEDS is reviewed and the goals and objectives of the plan are described in greater detail before presenting the specific project‐oriented strategies included in the 2012 CEDS. The collaborative planning framework of the CEDS is described in Section 5.0, which details the agency’s efforts to develop the CEDS through community partnerships and outreach. Section 6.0 presents the strategic projects, priorities, and activities of the CEDS; and Section 7.0 presents a detailed plan of action. Section 8.0 contains a review of specific, objective performance metrics that will be used to evaluate the Planning Organization’s performance in addition to progress.

8 Section 2.0: Background

2.0 Background

This section of the CEDS addresses the existing physical and non‐economic conditions affecting economic development of the NACOLG Region/Economic Development District (EDD). This section provides an overview of the major non‐economic characteristics shaping development in Lauderdale, Colbert, Franklin, Marion and Winston counties, including the geography, transportation and infrastructure, and outside forces that affect prospective economic development in the region.

2.1 Geography

The NACOLG region consists of Colbert, Lauderdale, Franklin, Winston, and Marion counties and is diverse in history, geography, and culture. The region is bounded in the north by the State of Tennessee and to the west by the State of Mississippi. The five counties together have an area of 3,364 square miles, with 109 square miles of surface water and 3,255 square miles of land area. Altogether, the region makes up 6.4% of the State of Alabama’s total geographic area. The region is located in the foothills of the Appalachian Mountains and in the Appalachian Regional Commission (ARC) planning area. Map 2.1 gives an overview of the geography of the region, its political boundaries, and some of the key physical characteristics. Map 2.2 indicates the location of the region in the state, Alabama’s ARC counties, and the counties in the Region 1 Northwest Alabama Workforce Development Council (see Section 2.5.2).

2.1.1 Geology

One of the most readily visible geographic elements of the Northwest Alabama region is the Appalachian foothills. The region is located at the convergence of three major geologic formations: the Highland Rim in the north, the Cumberland Plateau in the southeast and the East Gulf Coastal Plain in the southwest1. The geologic forces shaping these intersecting features have also created a geologically and topographically diverse region in Northwest Alabama. Rock formations vary from Mississippian to Precambrian and establish the topographic contours of the region. Elevations in the region range from 250 to 500 feet above mean sea elevation (MSE) at the point where the Tennessee River exits the region to above 1000 feet above MSE in portions of Franklin County2. In general, steeper hills and higher elevations are found in the southern part of the region, in Winston and Marion counties. Specific soil types, which are the product of geologic forces, vary significantly but are found in three general concentrations defined by parent material. Limestone valley and upland soils are found in much of central and eastern Lauderdale County. Small areas of Appalachian Plateau soils are found in Colbert County. Much of the remaining region is made up of soils from Coastal Plain materials.

1 See University of Alabama Geography Department, http://alabamamaps.ua.edu/contemporarymaps/alabama/physical/basemap6.pdf 2 See University of Alabama Geography Department, http://alabamamaps.ua.edu/contemporarymaps/alabama/physical/topo.pdf

10 Map 2.1 NACOLG Region and Economic Development District

State Route 20 Lexington State Route 64

Waterloo Anderson

United States Highway 72 St. Florian Killen

Florence Rogersville

Sheffield State Route 184 CherokeeUnited States Highway 72 Natchez Trace Muscle Shoals Tuscumbia HighwayLeighton 157 Corridor V Corridor X Littleville State Route 247 Natchez Trace Roads Russellville Corridor V Corridor V U.S. Highways State Routes Red Bay State Route 243 Lakes/River Vina Phil Campbell Hodges

United States Highway 43

Highway 195 Hackleburg Bear Creek

State Route 19 Haleyville Addison State Route 33

Military United States Highway 278 Double Springs

Highway 195 Hamilton State Route 241

Natural Bridge Arley State Route 17 Corridor X Highway 13 Lynn Twin Brilliant

Guin State Route 233Corridor X Gu-Win Winfield

Miles 0 5 10 20 Northwest Alabama · Council of Local Governments July 2012

11 Map 2.2: NACOLG Region, ARC Counties, Region 1 Workforce Development Council Boundaires

Lauderdale Limestone Jackson Madison Colbert Lawrence Franklin Morgan DeKalb Marshall

Winston Cherokee Marion Cullman Etowah Blount

Walker Lamar Calhoun Fayette St. Clair Cleburne

Jefferson

Talladega Tuscaloosa Pickens Shelby Clay Randolph

Bibb Coosa Chambers Greene Chilton Tallapoosa Hale Perry Sumter Elmore Lee Autauga Macon Dallas Marengo Montgomery Russell Lowndes Bullock Choctaw Wilcox

Pike Barbour Butler Clarke Monroe Crenshaw Henry Washington Conecuh Coffee Dale

Covington Escambia Houston Geneva

Mobile Baldwin

Northwest Alabama Region 1 Workforce Development Council Council of Local Governments · 12 July 20 Appalachian Counties NACOLG Counties Miles 0 20 40 80

2.1.2 Rivers

Northwest Alabama is divided by topography into two major river systems3. In the northwest, the Tennessee River serves as the boundary between Colbert and Lauderdale Counties and is one of the region’s most readily apparent features. Colbert, Lauderdale and most of Franklin counties are in the Tennessee River watershed and the Tennessee River serves as source of freshwater for numerous north Alabama communities as well as an inter‐state shipping lane for river traffic. Numerous tributaries are the source of freshwater and recreation throughout the region. The second major river system in Northwest Alabama, the Sypsey/Warrior basin, is located in Marion and Winston County. The Sypsey River and its tributaries are largely contained within Winston County and drain much of the Bankhead National Forest. The Sypsey flows southeast before converging into the Black Warrior River. The Sypsey River and the surrounding national forest are a vital natural resource for the region.

The region is home to numerous reservoirs and lakes, providing recreation and power to the area. Pickwick, Wilson, and Wheeler Lakes are reservoirs to power producing TVA dams and are among the more popular recreational destinations in the region. Lewis Smith Lake, an Alabama Power Company reservoir located partly in Winston County, is another sizeable recreational lake and source of power. The Bear Creek Lakes in Franklin and Marion counties are likewise popular for outdoor recreation. Marion County also is home to a public fishing lake located between Guin and Hamilton near the future I‐22 corridor.

Much of the region’s fresh water for consumption by business, industry and residences is supplied through wells and groundwater sources. The region’s various geologic formations, largely karst formations, transmit precipitation to wellheads areas. The Alabama Department of Environmental Management (ADEM) has identified and mapped recharge areas for these wellheads and has begun encouraging development patterns that are sensitive to the dangers, including health risks and extreme infrastructure costs, associated with polluting these water sources.

The region’s natural resources and recreational tourism assets were among the greatest strengths identified by stakeholders. Lakes and access to water for recreation, power, and public water supply were strengths.

2.2 Climate, Severe Weather, and Environmental Features

2.2.1 Climate and Precipitation

The area has a moderate climate with long summers and mild winters. Normal average temperatures range from 80.4 Fahrenheit in July to 41.0 Fahrenheit in January, as measured by the National Weather Service at the Muscle Shoals Regional Airport4. Some variation in the extreme ranges, up to a normal high of 90.9 in August and down to a normal low of 31.3 in January, are to be expected.

3 See University of Alabama Geography Department, http://alabamamaps.ua.edu/contemporarymaps/alabama/physical/basemap5.pdf 4 See NOAA. Muscle Shoals Alabama Climatology http://www.srh.noaa.gov/hun/?n=muscleshoalsnormalsandextremesdatabase

Monthly precipitation is consistent throughout the year, with a normal average monthly rainfall of 4.33 inches, an increase in spring and a decline in summer months. Snows are negligible and inconsistent in the winter months. Because of the favorable climate the region has a long growing season and few lost working days due to inclement weather, making it a favorable location for agriculture and industry. The region’s potential for crop production is limited primarily by soil types, which vary in fertility and suitability for agricultural production throughout the region.

2.2.2 Water Quality

Based on Section 303(d) of the Clean Water Act (CWA) the five county region of Northwest Alabama has 20 impaired water bodies and streams totaling approximately 17384 acres and 59 miles, respectively. Colbert County contains approximately 28 miles of impaired streams, or 45% of the regional total. Franklin County contains the most impaired water bodies in the region at ~10500 acres, over 50% of the regional total. Total, the northwest Alabama region made up 8.8% (20/227) of all water bodies on the 2012 CWA 303(d) list of Impaired Alabama water bodies.

The total mileage of impaired streams and the total acreage of impaired water bodies shown may be highere than th actual impaired stream mileage and the actual acreage of impaired water bodies due to the repetition of some water bodies in two or more counties.

2.2.3 Air Quality

The northwest Alabama region has little information available concerning Air Quality. There is currently one EPA testing site in the region in Muscle Shoals, Colbert County (located at Wilson Dam Rd And 2nd St.). The testing station gathers data for Ozone and PM2.5. According to EPA data, no NW Alabama counties are currently on nonattainment status. Colbert and Lauderdale counties were last on the nonattainment list in 1992. The three remaining counties in the region, (Franklin, Marion, Winston), have never been on the list.e Th Alabama Department of Environmental Management (ADEM) shows the Muscle Shoals stations average Ozone between 2009‐2011 to be approximately 65 ppb, and annual PM2.5 data between 10.3 and 11.3, all of which are well below recommended standards of <75ppb and <15ug/m3, respectively. Generally, the Northwest Alabama region has good .air quality

2.2.4 Severe Weather

The threat of severe weather is a genuine concern for the region. Severe thunderstorms are frequent and tornadoes are not uncommon. The destructiveness of these natural hazards places them among the most significant sources of economic disruption in the region. The April 27, 2011 tornadoes that struck the State of Alabama had a devastating impact on communities in northwest Alabama (see sidebar discussions of Hackleburg, Phil Campbell, Haleyville, Marion County, and Franklin County).

Though no more of a threat than in other locations, natural hazards were identified as events with an extreme potential to disrupt the economic stability of the region. Community resilience to natural disasters was a primary concern. Activities including mitigation, preparedness, improved

response and recovery; business planning; government mitigation efforts and planning were priorities established for the region.

2.3 Demographic Overview

2.3.1 Total Population Trends

Statewide, population growth in Alabama from 2000 to 2010 was 7.5%, up by 332,636 people to a total population of 4,779,736 in 2010. By comparison, the five‐county region grew by only 1.7% in the same period, from 230,260 to 234,101, a total increase of 3,871 people according to Census counts (see Table 2.1). Growth from 2000 to 2010 was less than 1990 to 200 in the State (9.5%) and region (10.7%). These disappointing numbers reflect the economic downturn of the decade and the serious level of distress present in the region, which makes it difficult to attract and retain population. Table 2.1 also presents population forecasts for Alabama, the NACOLG region and each of the 5 counties. According to these forecasts, produced by the University of Alabamar Center fo Business and Economic Research (CBER), the State of Alabama is expected to a 18.5% in population by 2035; meanwhile the regional trend is predicted to be significantly less at 9.6% growth. Population trends for individual counties vary, with Lauderdale County expected to grow by a significantly larger number in terms of total population, while Winston County is expected to experience the largest growth in population terms of percentage gained. Lauderdale County is predicted to fuel over half of the projected growth out to 2035, reflecting trends toward urbanization and away from rural Alabama. Marion County is predicted to lose slightly in terms of population in the coming decades.

Table 2.1 Population 2000‐2010 and Projections 2015‐2035

Change 2010‐ Census Census Projected Projected Projected Projected Projected 2035 County 2000 2010 2015 2020 2025 2030 2035 Number Percent

Alabama 4,447,100 4,779,736 4,977,868 5,169,760 5,351,348 5,515,749 5,662,470 882,734 18.5 Region 1 230,230 234,101 240,561 246,113 250,686 254,182 256,575 22,474 9.6 Colbert 54,984 54,428 55,281 55,974 56,506 56,863 57,043 2,615 4.8 Franklin 31,223 31,704 32,986 34,091 34,962 35,605 36,033 4,329 13.7 Lauderdale 87,966 92,709 95,669 98,338 100,711 102,714 104,271 11,562 12.5 Marion 31,214 30,776 31,076 31,214 31,195 31,022 30,705 ‐71 ‐0.2 Winston 24,843 24,484 25,549 26,496 27,312 27,978 28,523 4,039 16.5 Note: These projections are an interim series where the 2010 total population for the state and each county is controlled to the 2010 Census total, but the age/race/sex projection breakdowns are based on trends between the 1990 and 2000 censuses, adjusted for more recent migration trends. A new series of projections based on the 2000 to 2010 censuses will be released later this spring. Source: U.S. Census Bureau and Center for Business and Economic Research, The University of Alabama, June 2011.

2.3.2 Age Profile and Trends

Although total population grew from 2000 to 2010, not all age groups received the same share of growth and, in fact, some age groups experienced a decline in population. Table 2.2 illustrates the age distribution of population in the NACOLG region in 2000 and 2010. According to these measures, the

Table 2.2 Population by Age, 2000 and 2010 Number Percent Number Percent Numeric Percent Change Change Total 230230 100 234101 100 population 3871 1.68 Under 5 13979 6.1 13599 5.8 years ‐380 ‐2.72 5 to 9 15078 6.5 14012 6.0 years ‐1066 ‐7.1 10 to 14 15545 6.8 14931 6.4 years ‐614 ‐3.9 15 to 19 15669 6.8 15961 6.8 years 292 1.9 20 to 24 14426 6.3 14916 6.4 years 490 3.4 25 to 29 14896 6.5 13185 5.6 years ‐1711 ‐11.5 30 to 34 15324 6.7 12906 5.5 years ‐2418 ‐15.8 35 to 39 17133 7.4 14538 6.2 years ‐2595 ‐15.1 40 to 44 17121 7.4 15353 6.6 years ‐1768 ‐10.3 45 to 49 16031 7.0 16930 7.2 years 899 5.6 50 to 54 15422 6.7 17176 7.3 years 1754 11.4 55 to 59 13199 5.7 15761 6.7 years 2562 19.4 60 to 64 11569 5.0 15014 6.4 years 3445 29.8 65 to 69 10019 4.4 12482 5.3 years 2463 24.6 70 to 74 8906 3.9 9965 4.3 years 1059 11.9 75 to 79 7130 3.1 7423 3.2 years 293 4.1 80 to 84 4787 2.1 5372 2.3 years 585 12.2 85 years 3996 1.7 4577 2.0 and over 581 14.5

largest growth occurred among individuals age 60 to 64, which grew by 29.8% between 2000 and 2010. These statistics also indicate a growth in the overall population of individuals aged 65 and older, which will produce changes in economic climate in future years (see Table 2.2). Meanwhile, between 2000 and 2010 population declined for critical age groups between 25 and 44 years, which represented the mid‐career worker in the regional economy.

Working age population, aged 15‐65, declined between 2000 and 2010. Table 2.3 shows the 2000 and 2010 working age population in the NACOLG region and each county. These estimates indicate a decline in the proportion of working age population as a proportion of the total population in the next two decades. Total working age population, i.e. the absolute number of individuals aged 15‐ 64, has declined in each county except for Lauderdale in the decade from 2000 to 2010.

Table 2.3 Population 15 to 64, 2000 and 2010 2000 2010 Percent Change Region 1 152946 150790 ‐1.41 Colbert 35670 35112 ‐1.56 Lauderdale 57981 60814 4.89 Franklin 22423 20359 ‐9.20 Marion 20441 19654 ‐3.85 Winston 16431 15801 ‐3.83 Source: U.S. Census 2000, U.S. Census 2010, American Factfinder.

An aging population and changing workforce demographics, particularly the loss of working age population, were identified as potential threats. The declining workforce of a traditional ‘working age’ indicates lower total earnings and potential declines in overall productivity unless productivity is replaced through the use of higher value‐added techniques and technology. Without significant gains in the wages of employment, fewer workers will supply fewer resources for community and economic development and lower aggregate quality of life. Additionally, an increasing elderly population indicates changing patterns of demand for services, particularly healthcare related services.

2.3.3 Gender and Race

The distribution of population by gender and race for each county is shown in Table 2. 4. Race and gender are associated with gaps in income levels and median income.

Table 2.4 Gender, Race and Hispanic Origin America n Indian Black or or African Alaska Hispanic Male Female White American Native Other or Latino Alabama 2320188 2459548 3275394 1251311 28218 224813 185602 48.5 51.5 68.5 26.2 0.6 4.7 3.9 202262. 1085.86 10566.5 9177.16 Region 1 113875.5 120625.5 8 20585.81 1 1 4 48.6 51.4 86.3 8.8 0.5 4.5 3.9 Colbert 26159 28269 43789 8768 267 1604 1093 48.1 51.9 80.5 16.1 0.5 2.9 2.0 Franklin 15828 15876 26320 1228 215 3941 4710 49.9 50.1 83.0 3.9 0.7 12.4 14.9 Lauderdale 44379 48330 80112 9257 338 3002 2082 47.9 52.1 86.4 10.0 0.4 3.2 2.2 Marion 15293 15483 28291 1184 101 1200 632 49.7 50.3 91.9 3.8 0.3 3.9 2.1 Winston 12021 12463 23409 115 163 797 639 49.1 50.9 95.6 0.5 0.7 3.3 2.6 Source: U.S. Census 2010, American Factfinder.

2.3.4 Migration

Table 2.5 displays data on migration patterns in the previous year for the Nation, Alabama and the counties of the region. As shown, the number of residents estimated to reside in the same house in the prior year was very similar across all areas. Movement within the county was also very similar. In migration into Colbert and Lauderdale counties from other parts of the state of Alabama was slightly

United Alabama Colbert Franklin Lauderdale Marion Winston Table 2.5 Migration in the States County, County, County, County, County, past year Alabama Alabama Alabama Alabama Alabama Estimate Estimate Estimate Estimate Estimate Estimate Estimate

Same house 1 year ago: 84.23% 84.26% 84.97% 84.56% 84.89% 87.78% 84.39% Moved within same county: 9.41% 9.38% 8.46% 10.87% 7.91% 7.43% 8.97% Moved from different county within same state: 3.32% 3.31% 4.13% 3.30% 4.17% 3.45% 5.36% Moved from different state: 2.43% 2.69% 2.36% 1.14% 2.81% 1.34% 1.29% Moved from abroad: 0.61% 0.35% 0.09% 0.13% 0.23% 0.00% 0.00% Source: U.S. Census Bureau, American Communities Survey, 2010 higher than the nation, state or other county estimates. Winston County experienced the highest in‐ migration from other parts of the state, likely in response to the presence of Smith Lake as a popular location for new homes. Movement from a different state was slightly lower in Franklin and Marion

Counties than in other geographic areas studied. Movement from abroad was lower in Alabama and each of the counties of the region than in the nation at large.

2.3.4 Education

A prepared workforce is a critical element for economic development. Educational attainment is a primary characteristic of workforce readiness. Educational opportunities and workforce education levels are among the most basic indicators of economic health. These are reviewed by potential new businesses and provide strong indicators of the overall well‐being of the regional economy. The region possesses a number of strong educational assets, from public school systems to community colleges and a university.

Table 2.5 displays information on educational attainment in the United States and the study areas. This table illustrates the overall performance gaps between the region and the nation, as well as between different counties within the region. The distribution of population having less than a high school education is higher across the region than in the nation; the estimate of those possessing a high school or high school equivalency is higher, however, this figure is offset by a lower number possessing college education. Underperformance in the arena of higher education, as indicated by estimates of “some college” or higher, is particularly acute in Marion, Franklin, and Winston Counties.

Education and skills for workforce and to create a higher quality of life were central to the feedback received in the course of developing the CEDS. Workforce development, in terms of matching skills to employer needs, was a top priority. Conversations were mixed with regard to the ability of the region, or a county within the region, to use educational offerings to shape the type of employer locating in the region. Some observed that this type of skills‐clustering was potentially an important tool, while others observed that local economies are shaped in large part by externalities and that concentrating on particular skills could lead to lost opportunities.

Table 2.5: United Alabama Colbert Franklin Lauderdale Marion Winston Educational States Enrollment and Educational Attainment SCHOOL ENROLLMENT Population 3 80,939,002 1,206,731 12,087 6,846 22,793 6,435 5,272 years and over enrolled in school Nursery school, 6.1% 5.7% 5.6% 4.7% 5.0% 4.3% 4.1% preschool Kindergarten 5.1% 5.3% 5.0% 6.9% 5.4% 5.5% 3.6% Elementary school 40.3% 42.3% 46.1% 50.3% 39.1% 46.8% 51.0% (grades 1-8) High school 21.7% 21.4% 25.0% 23.2% 20.7% 22.6% 25.3% (grades 9-12) College or 26.9% 25.3% 18.3% 14.9% 29.8% 20.7% 16.0% graduate school EDUCATIONAL ATTAINMENT Population 25 199,726,659 3,108,132 37,986 20,876 61,976 21,843 17,353 years and over Less than 9th 6.2% 6.3% 6.9% 12.5% 5.5% 10.5% 11.5% grade 9th to 12th grade, 8.7% 12.3% 13.0% 17.9% 11.6% 18.6% 19.3% no diploma High school 29.0% 31.8% 34.3% 32.2% 34.0% 35.2% 33.5% graduate (includes equivalency) Some college, no 20.6% 21.0% 22.2% 18.7% 21.0% 18.8% 18.8% degree Associate's degree 7.5% 6.9% 7.2% 7.0% 6.5% 8.2% 5.9% Bachelor's degree 17.6% 13.8% 10.5% 7.6% 13.6% 5.0% 5.6% Graduate or 10.3% 7.9% 5.9% 4.2% 7.9% 3.8% 5.6% professional degree Percent high 85.0% 81.4% 80.1% 69.6% 82.9% 71.0% 69.3% school graduate or higher Percent bachelor's 27.9% 21.7% 16.4% 11.8% 21.5% 8.8% 11.1% degree or higher Source: U.S. Census Bureau, American Communities Survey, 2010

2.4 Infrastructure Capacity and Resources

2.4.1 Transportation System

The transportation system of the region varies from county to county with respect to access to adequate highway, rail, air, and water infrastructure for moving freight and people.

Highways

The Shoals area is the crossroads for two major regional arterials, U.S. Highways 72 and 43, and numerous state highways; however, interstate access is not readily available. Interstate 65 to the east is the closest interstate highway. The recent elimination of the “Memphis to Atlanta Corridor” from the Alabama Department of Transportation’s long range plans reflects increasing constraints on the long‐ term financial outlook of ALDOT. As monies grow increasingly tighter, large capacity projects move further out, eventually moving beyond the planning horizon. Maintaining a focus on bringing the project back into a ‘fiscally constrained’ long‐range transportation plan will be .a priority One bright spot is the future I‐22 linkage to the south, which is nearing completion; but it will not be accessible to most residents and businesses except through long two‐lane routes. In the Shoals area, long‐term goals include access to interstate highways. With the completion of Highway 157 to Cullman and I‐65, north to south linkages are intermediate and long term priorities in order to more efficiently move goods and services.

Franklin County is crossed from north to south by Highway 43 and from east to west by Highway 24 (Appalachian Corridor “V”), both of which are major regional arterials. Minor arterials include Highway 247 which connects Red Bay to Highway 72 (in Colbert County) and Highway 13 leading southeast to Winston County. The Highway 13 corridor, aka ‘the Haleyville Bypass’ continues to be a high priority for Franklin County residents interested in better access to. I‐22

Marion County is crossed by Highway 43 from north to south and by Highway 78 (soon‐to‐be U.S. Interstate 22) from east to west. Only the costly project underway north of Birmingham, which will connect the route to I‐65, remains. Once completed, the route will have official designation as interstate Highway 22. Traffic increases are highly anticipated. Preparing for this growth is a near term priority for the region. As a result of regional developments (the location of a Toyota manufacturing facility near Tupelo, Mississippi), industrial development in the region has the potential to radiate outward from I‐22 along major arterials, affecting virtually every community in the region. Additionally, Highway 278 runs west to east through Hamilton to Double Springs and continues east to Cullman, Alabama. Finally, Highway 19 connects Red Bay to Hamilton.

Winston County is the most isolated county of the region in terms of transportation infrastructure. The county is traversed north and south by Highway 13, which passes through Haleyville, Natural Bridge, and Lynn. Highway 195 passes north and south through Haleyville and Double Springs before exiting the county. Finally, highway 278 passes east and west through Winston County from Marion County, through Natural Bridge, Double Springs and Addison. There are no four‐lane highways

in the county. The Highway 13 corridor connection to I‐22 remains a priority from the “Haleyville Bypass” in the north to the stretch from the Winston/Walker County line to the Interstate.

Transportation infrastructure has improved in the region in recent years in certain areas. In others, it has remained stagnant for many decades. The completion of Highway 157 between the Shoals and I‐ 65 was a major accomplishment, but much remains to be done on U.S. Highway 43. Corridor V in Franklin County is nearing completion, but dead ends at the Mississippi State line, beyond the direct influence of local and state officials. Marion County has had the greatest success with the near completion of I‐22 opening up tremendous opportunities for new development. Winston County, however, has languished for decades with isolation and two‐lane roads continuing to be a significant barrier to new development.

Rivers

River access is more abundant in the Shoals than in other parts of the region. Both Colbert and Lauderdale Counties have potential access to river transportation via the Tennessee River. The only port facility in the Shoals is currently the Port of Florence, which is located along the riverfront south of downtown. The capacity of this facility to receive barges is limited and discussions have included numerous improvements to the facility5. Colbert County has recently discussed activating a port authority in order to improve access to the Tennessee River. From Wilson and Pickwick Lakes on the Tennessee River, to the Bear Creek recreational lakes in Franklin and Marion Counties, to Smith Lake and the Sypsey River basin in Winston County, significant recreational waters are present region‐wide. These waters are important economic generators. However, outside of the Shoals area there is a lack of access to navigable waters for transportation purposes.

Rails

A major Norfolk Southern line traverses Colbert County and a spur line connects Florence Industrial Park to Columbia, Tennessee. At one time these routes connected across the Tennessee River railroad bridge, but since the railroad bridge was discontinued the alternative routes north from Colbert County lead west through Memphis, Tennessee and east through Decatur, Alabama. A second Norfolk Southern line runs south from Muscle Shoals through Franklin County, northeast Marion County, through Winston County and southeast to Birmingham, Alabama.

Airports

The Northwest Alabama Regional Airport in Muscle Shoals is the region’s only commercial airport. The airport is owned by Colbert and Lauderdale Counties and provides passenger flights to over 580 destinations through Memphis on Northwest Airlines. The airport also provides private aircraft facilities and air freight services. The Rankin Fite Airport in Hamilton provides private air service to Marion County.

5 See Port of Florence Master Plan, prepared for Florence‐Lauderdale County Port authority, W.R. Cole and Associates, January 2004, pgs. 21‐47.

Improvements to the airports are underway to improve passenger and freight movement and connectivity to industrial properties.

2.4.2 Water Systems

A comprehensive water system analysis is not available for the region at this time; however, planning for water system improvements should be coordinated on a regional basis from at leaste th county level, rather than in ad hoc projects in response to increases in demand. Particular attention is needed in the areas of drainage and recharge system integrity and provisions for adequate future source waters, in addition to common infrastructure improvements associated with economic development proposals. Mapping and GIS projects are underway in the counties of the region to provide an adequate picture of the system infrastructure. Maps have been completed in Franklin County and Winston County and are complete or underway in other locations.

2.4.3 Electrical Systems

A complete electrical system inventory and analysis is not available for the region at this time; however, both Alabama Power and the Tennessee Valley Authority are regional power suppliers in the area. Both entities are involved in economic development in the region and assist direct suppliers at the local level in meeting the needs of industry, commerce, and residences. Local planning initiatives should contain capital facilities planning sufficient to forecast projected electrical demand resulting from growth and to meet this demand.

2.4.4 Natural Gas Systems

A complete gas distribution inventory and analysis is not available for the region at this time. An inventory of major transmission pipelines should be accompanied by planning for local natural gas utilities, which should begin with an inventory of these local suppliers. Eventually demand and infrastructure requirements for these utilities should be incorporated into local and regional planning initiatives.

2.4.5 Telecommunications

A telecommunications system inventory and analysis is not available for the region at this time. Local planning initiatives should contain capital facilities requirements sufficient to improve access to telephone, cable, and wireless technologies.

2.4.6 Solid Waste Disposal

An inventory and analysis of solid waste disposal and landfill operations is not available for the region at this time; however, these facilities should be inventoried and incorporated into local planning initiatives in order to meet demand resulting from growth and development. By state law, the regional planning organization is involved in the review process for all solid waste permits or alterations to solid waste management plans. Presently, all local plans call for municipal solid waste to be transferred out of

the region to regional landfill facilities. Local construction and demolition landfills continue operations at various locations through the region.

2.4.7 Healthcare Profile

Access to healthcare varies by county across the region. A complete inventory of healthcare facilities is available through the Alabama Department of Public Health6. Each county has access to at least one hospital facility, providing many of the services available at the facilities listed in Table 2.6: Healthcare Facilities by County. For example, while the county does not have a facility devoted exclusively to ambulatory surgical services, these services are available in Colbert County at Helen Keller Hospital. Nonetheless, there is a need for additional healthcare access in the region. In particular, affordable hospice care and accessible dialysis treatment are shortfalls potential shortfalls, particularly in more rural parts of the region.

Table 2.6: Healthcare Facilities by County Colbert Lauderdale Franklin Marion Winston Ambulatory Surgical Centers 0 2 0 0 0 Assisted Living Facilities 5 7 2 1 3 Community Mental Health Centers 0 1 0 1 1 End Stage Renal Disease Treatment Centers 2 2 1 2 0 Federally Qualified Health Centers 0 1 0 0 0 Home Health Agencies 1 1 3 3 2 Hospices 3 5 1 2 0 Hospitals 2 1 2 2 1 Independent Clinical Laboratories 6 8 3 2 2 Independent Physiological Laboratories 0 2 1 0 1 Nursing Homes 4 5 4 3 2 Portable X‐Ray Suppliers 0 1 0 1 0 Rehabilitation Centers 1 0 0 0 0 Rural Health Clinics 0 0 3 1 2 Sleep Disorders Center 0 1 1 0 0

2.5 The Planning Environment: Statewide Plans, Regional Planning Initiatives, Local Planning

The CEDS is designed to adhere to and complement broader statewide planning objectives. In Alabama, statewide strategic plans generally address project implementation and support for local initiatives. Rarely do these plans go beyond this implementation role and enter into planning and the determination of project priorities. Rather, state‐level entities in Alabama offer a wide range of support for implementing project priorities. This focus on implementation and support to local initiatives is evident in the strategic plans of the State’s economic development agencies. However, as described below, there are several noteworthy statewide initiatives that have been the result of regional planning and State‐initiated processes.

6 http://ph.state.al.us/facilitiesdirectory/

2.5.1 Alabama Planning

The State of Alabama has not had a long history of statewide strategic planning. The Alabama Association of Regional Councils (AARC) led in this area by consolidating the regional CEDS of the ten economic development districts7. The Consolidated CEDS analyzed the goals, priorities, vital projects, and performance benchmarks of each of the regional CEDS in order to distill commonalities across the state. In contrast to the regional CEDS, the State CEDS was designed to indicate needs of statewide relevance that were derived from a local and regional context. The finished product identified four common areas of statewide importance as Transportation Infrastructure, Industrial Infrastructure, Community Infrastructure, and Education and Workforce Development and Other Projects. Likewise, the State CEDS provided an inventory and analysis of common benchmarks for the regional CEDS statewide. These indicators of performance have been incorporated into the Northwest Alabama Comprehensive Economic Development Strategy.

In addition to AARC efforts, the recently created Alabama Economic Development Alliance developed the first ever state‐sponsored statewide economic development strategic plan in 2011. The plan was released in early 2012 and calls for targeted recruitment of industries in 11 specific business types associated with Advanced Manufacturing, Technology, Distribution/Logistics, and Corporate Operations. In addition, the plan offers general economic development strategies around the subject areas of Recruitment, Retention, and Renewal. The strategies align substantially with local and regional efforts of the region and are incorporated as part of the Northwest Alabama Comprehensive Economic Development Strategy.

2.5.2 Regional Planning

Regional Planning Commissions

In contrast to statewide planning initiatives, the state has a number of planning tools available at the regional level. The first of these are the Regional Planning Commissions, which are organizations with a broad mandate to provide administrative, technical and planning support and services to local communities. The RPCs serve 12 regions statewide. Through communication, planning, policymaking, coordination, advocacy and technical assistance, the Commissions serve member governments and citizens of the region. They also provide a forum for member government representatives to discuss and resolve common problems, especially those that transcend political boundaries. Although not all RPCs are recognized as Economic Development Districts, NACOLG is recognized as both the RPC and the EDD for the five‐counties of Northwest Alabama.

Regional Workforce Development Councils

In order to connect the needs of local industries and businesses to the workforce system of Alabama, the state has established regional workforce development councils. The workforce councils are part of the state review process for funding projects workforce providers, largely colleges of the

7 http://ceds.alabama.gov/

Alabama Community College System. The regional workforce councils are charged with drafting and maintaining a strategic plan for workforce investments in the region. Funding requests originate with workforce providers and are reviewed and prioritized by the regional workforce council before submission to the Alabama Department of Post‐Secondary Education. Upon receipt, applications are reviewed by a state Proposal Review Committee made up of representatives/chairpersons of the regional workforce development councils. Recommendations for funding are forwarded to the Alabama Workforce Training Council, which consists of State executive department heads, which makes final recommendations to the Alabama State Board of Education. In northwest Alabama, NACOLG serves as the administrator of the Region 1 Workforce Development Council, which serves Lauderdale, Colbert, Franklin, Marion, Winston, and Lawrence Counties. Although outside of the typical NACOLG service area, Lawrence County was added to the Region 1 Workforce Development Council in 2011. The region has a strategic plan, which aligns with the CEDS and other statewide plans. The process has facilitated hundreds of thousands of dollars for workforce training in the past 4 years.

Transportation Planning

Two types of planning bodies are active at the regional level in transportation planning statewide, the Metropolitan Planning Organizations (MPOs) and the recently established Rural Planning Organizations (RPOs). The MPOs coordinate transportation improvements within Metropolitan Statistical Areas, as recognized by the U.S. Census Bureau and required by the Federal Highway Administration. These bodies are responsible for reviewing all proposed projects within the respective MPO area. Within northwest Alabama, the Florence‐Muscle Shoals MPO includes much of Colbert and Lauderdale Counties. For remaining nonmetropolitan areas, the Rural Planning Organizations provide an opportunity for feedback and discussion of transportation related issues and questions.

26 Section 3.0: Profile Economic

3.0 Economic Profile

The five‐county study area consists of Lauderdale, Colbert, Franklin, Marion, and Winston Counties in Northwest Alabama. These counties are interconnected by geography, culture, politics, and economics. An analysis of existing economic trends and conditions provides a useful frame for the discussion of economic development needs and opportunities in the region. Indicators such as employment, unemployment, personal income, and industry employment and wages are useful for determining in the overall health of the economy, its vitality and diversity and, when viewed in a historical context, revealing clues about likely future trends. This sort of analysis also serves an important function, allowing judgment about the strengths and weaknesses of the local economy over time. This analysis reviews performance indicators based on county level data and comparisons to national and statewide data. In addition, the analysis reviews some business cycle trends and major industrial sectors in order to evaluate performance during different parts of the economic cycle and the identification of key sectors or potential clusters.

3.1 Labor Profile: Employment and Unemployment

3.1.1 Employment8

Employment, or the capacity of an economy to produce new jobs and new economic opportunities for a population, is one indicator of the economic health and vitality of a region. Primarily, a growth in employment opportunities is essential to provide jobs, income and quality of life to those entering the workforce. Steady employment growth is also necessary in order to buttress the overall economy against downturns, layoffs, and job losses in particular industries and sectors at various times in the business cycle. Ideally, healthy growth in employment opportunities is associated with lower unemployment and underemployment, as more workers find employment and higher incomes as vacancies in lower paying positions create demand for workers to fill those positions. In contrast, however, overly rapid employment growth may create labor shortages in some sectors, leading to inflated wages, lost profitability and business closures. Thus, employment growth in an economy must be viewed in relation to other indicators of economic health, such as population trends, unemployment and wages, and judged with regard to the effect of new jobs on the greater economy.

Everywhere there was consensus that more jobs were needed and that jobs should be matched with skills leading to higher quality jobs. In some, places quality was expressed primarily in terms of pay scale, while others discussed “blue collar” and “white collar/professional” opportunities. Many observed a disjoint between the skills encouraged in the workforce and the skills recruited to the area. There was consensus that skills and training should be tied to job‐creation efforts in a coordinated way.

Table 3.1: Employment Growth presents employment data for the five‐county region alongside comparable data for the nation, and the state (see also Section 3.3, which addresses employment by

8 Source: U.S. Department of Commerce, Bureau of Labor Statistics, various sources. Available online http://www.bls.gov/lau/home.htm

industrial sector). The long term trend for the region has not kept pace with employment growth for the nation or the state. From July 1990 to June 2012, average annual employment growth in the United States was 0.9%. Meanwhile, average annual employment growth in the State of Alabama and the Florence‐Muscle Shoals MSA was just 0.5%. Elsewhere in the region, the average annual rate of growth in employment was negative in this long term period. Likewise, growth in the last complete business cycle (Peak to Peak, March 2001‐December 2007) was weaker in the region than in the nation. The recession of that cycle hit the region harder, with a greater average annual loss of employment than nationally or statewide, and the recovery was less robust. Likewise, the current recession caused a greater annual average loss in the region than in the nation or statewide; and the ongoing recovery has witnessed less growth in employment.

Table 3.1: Analysis of Employment Growth A. Total Employment, Selected Points Jul-90 Mar-91 Mar-01 Nov-01 Dec-07 Jun-09 Jun-12 United States 118810 117652 137783 136238 146273 140003 142415 Alabama 1799228 1768932 2067082 2015130 2102498 1944377 1993151 Florence- Muscle Shoals MSA 58382 58025 66495 63131 65707 61784 64531 Franklin 12465 12453 13233 12806 13201 11684 12266 Marion 12260 12101 12296 11679 12345 10471 10705 Winston 9460 885110075 9712 9594 8183 8440 B. Percentage Change Employment by Business Cycle and Phase Current Current Prior Cycle Prior Cycle Cycle Cycle Peak to Prior Cycle Recovery Recession Recovery Peak (Mar Recession (Nov (Dec (June Jul 1990- Jun 2001-Dec- (Mar 2001- 2001-Dec 2007-June 2009-Jun 2012 2007) Nov 2001) 2007) 2009) 2012*) United States 19.9% 24.3%-1.1% 7.4% -4.3% 1.7% Alabama 10.7% 18.9%-2.5% 4.3% -7.5% 2.4% Florence- Muscle Shoals 10.5% 13.2%-5.1% 4.1% -6.0% 4.3% Franklin -1.6% 6.0%-3.2% 3.1% -11.5% 4.7% Marion -1.3% 2.0%-5.0% 5.7% -15.2% 2.2% Winston -10.8% 8.4% -3.6% -1.2% -14.7% 3.0%

C. Average Annual Rate of Employment by Business Cycle Current Current Prior Cycle Prior Cycle Cycle Cycle Peak to Prior Cycle Recovery Recession Recovery Peak (Mar Recession (Nov (Dec (June Jul 1990- Jun 2001-Dec- (Mar 2001- 2001-Dec 2007-June 2009-Jun 2012 2007) Nov 2001) 2007) 2009) 2012*) United States 0.9% 3.6%-1.7% 1.2% -2.9% 0.6% Alabama 0.5% 2.8%-3.8% 0.7% -5.0% 0.8% Florence- Muscle Shoals 0.5% 2.0%-7.6% 0.7% -4.0% 1.4% Franklin -0.1% 0.9%-4.8% 0.5% -7.7% 1.6% Marion -0.6% 0.3%-7.5% 0.9% -10.1% 0.7% Winston -0.5% 1.2%-5.4% -0.2% -9.8% 1.0%

3.1.2 Unemployment9

Unemployment is a rough measure of the number of individuals lacking jobs in an economy. Unemployment statistics suffer from limitations due to their collection, and an understanding of these limitations is important to understanding the usefulness of the statistic as a measure of economic health. First, unemployment statistics represent only individuals actively seeking employment through government placement agencies and receiving unemployment compensation. Thus, they do not represent individuals lacking work who are seeking employment on their own, nor do they represent individuals who have surpassed allowable periods for unemployment compensation and are no longer appearing in government unemployment records. Unemployment measures do not account for discouraged workers, who are individuals who have given up the search for work but are without jobs. Additionally, unemployment statistics are subject to fluctuations in population‐ that is, as the population increases or decreases (often as a result of the availability of jobs), unemployment rates echange. Th measure of unemployment, however, does not account for any gain or loss in population. Thus, while an area may experience slight population loss and maintain low unemployment rates, the reason for the low rate may be a loss of population due to a lack of employment opportunities in the region. Finally, unemployment statistics do not account for the incidence of underemployment, whereby a worker

9 Source: U.S. Department of Commerce, Bureau of Labor Statistics, various sources. Available online Source: U.S. Department of Commerce, Bureau of Labor Statistics, various sources. Available online http://www.bls.gov/lau/home.htm.

receives too few hours or too little compensation relative to skills, training or standard of living. Therefore, unemployment is a complicated measure and must be viewed in relation to other factors such as population growth and total employment.

In contrast to meetings held in 2007, the view of unemployment has changed significantly in the region. In previous periods of higher job creation, unemployment was mentioned less frequently than underemployment and population lost due to inadequate job opportunities as a source of economic hardship. In today’s economy, unemployment and the need for quality jobs were cited as paramount. Jobs of not only sufficient number but also sufficient wages are needed in order to rebound from the losses of the recent recession.

Table 3.2: Analysis of Unemployment displays unemployment data for each of the geographies of the five‐county region, the nation, and the State. The data, reported monthly from July 1990 to June 2012, encompass the past two business cycles, peak to peak, the most recent recession and the start of the current recovery period. Figure 3A presents a monthly graph of the geographies in the study area. From these figures, it is clear that employment trends deteriorated significantly following the ‘Great Recession’ and have tracked the recovery since it began in 2009. Beginning at a level significantly higher than the national average in July 1990, unemployment rates cycled downward to a low that was below the national average in 2007, spiked in 2008 and began a slow recovery.

The early 1990s, in particular, saw a dislocation of workers in the five‐county region, which was slow to correct. Even as national unemployment trends improved, the five‐county region continued to experience higher rates and recovered later than much of the nation. Significant progress was made through the decade, but the respite was short‐lived, as unemployment rates rose again, in keeping with national trends, to spike in 2002. From 2002‐2007, rates steadily declined region‐wide. At one point, unemployment in the local economy was not a significant negative factor; in fact, by the common “rule of thumb” that 3% unemployment is as low as the indicator is likely to ever go, it appeared that the region was at or near full employment. This was a significant achievement for the five‐county region considering the double‐digit unemployment rates of 1990 and the prolonged dislocation of the region.

The Great Recession reversed these gains. Unemployment skyrocketed during the recessionary period, again reaching double digits in each county of the region. Since 2009, the road to recovery has been slow and painful for the region. Unemployment in the region and state have tracked with the national trend, although at higher levels; but the improvement has not been rapid, as in prior recovery periods. Trends indicate that the slow and arduous task of reducing unemployment will continue to be a top priority for the foreseeable future.

Table 3.2: Analysis of Unemployment A. Unemployment, Selected Points Jul-90 Mar-91 Mar-01 Nov-01 Dec-07 Jun-09 Jun-12 United States 5.5% 6.8% 4.3% 5.5% 5.0% 9.5% 8.2% Alabama 6.4% 7.1% 4.2% 5.4% 3.4% 10.8% 8.9% Florence- Muscle Shoals MSA 6.9% 7.4% 5.0% 7.5% 4.1% 10.6% 8.6% Franklin 10.6% 10.8% 6.7% 7.2% 4.2% 12.3% 9.6% Marion 15.7% 11.3% 7.8% 8.2% 5.0% 15.2% 10.7% Winston 9.6% 14.0% 8.5% 8.3% 6.2% 16.9% 11.1% B. Percentage Point Change Unemployment by Business Cycle and Phase Current Current Prior Cycle Prior Cycle Cycle Cycle Peak to Prior Cycle Recovery Recession Recovery Long Term Peak (Mar Recession (Nov (Dec (June Jul 1990- 2001-Dec- (Mar 2001- 2001-Dec 2007-June 2009-Jun Jun 2012 2007) Nov 2001) 2007) 2009) 2012*) United States 2.7% -1.8% 1.2% -0.5% 4.5% -1.3% Alabama 2.5% -3.7% 1.2% -2.0% 7.4% -1.9% Florence- Muscle Shoals 1.7% -3.3% 2.5% -3.4% 6.5% -2.0% Franklin -1.0% -6.6% 0.5% -3.0% 8.1% -2.7% Marion -5.0% -6.3% 0.4% -3.2% 10.2% -4.5% Winston 1.5% -7.8% -0.2% -2.1% 10.7% -5.8% C. Average Annual Rate of Unemployment Change by Business Cycle Current Current Prior Cycle Prior Cycle Cycle Cycle Peak to Prior Cycle Recovery Recession Recovery Peak (Mar Recession (Nov (Dec (June Jul 1990- 2001-Dec- (Mar 2001- 2001-Dec 2007-June 2009-Jun Jun 2012 2007) Nov 2001) 2007) 2009) 2012*) United States 2.2% -3.9% 41.9% -1.5% 60.0% -0.4% Alabama 1.8% -7.7% 42.9% -6.1% 145.1% -0.6% Florence- Muscle Shoals 1.1% -6.6% 75.0% -7.5% 105.7% -0.7% Franklin -0.4% -9.1% 11.2% -6.8% 128.6% -0.9% Marion -1.5% -8.3% 7.7% -6.4% 136.0% -1.5% Winston 0.7% -8.3% -3.5% -4.2% 115.1% -1.9%

Figure 3A 20 18 Alabama

(%) 16

14 Florence‐Muscle Rate 12 Shoals MSA 10 Franklin County 8 6 Marion County 4 Unemployment 2 0 Winston County

1990 1991 1993 1994 1996 1997 1998 2000 2001 2002 2004 2005 2007 2008 2009 2011

3.1.3 Underemployment

Underemployment is the condition of a worker who, despite having skills that would allow him or her success in a higher paying job, lacks the quality or quantity of work for which he or she is qualified. Such workers tend to earn lower wages than they believe themselves qualified to earn, work fewer hours, and have less job security and tenure. Reasons for underemployment vary considerably, but include factors such as a lack of job opportunities, an unwillingness to commute, and an inability to relocate from a geographic location due to family or other considerations. According to a study of underemployment by The University of Alabama, the statewide rate of underemployment was 25.2% in 2006, up slightly from 2004. Based on survey responses, Region I of the Workforce Investment Advisory Area, made up of the five counties of the Economic Development District (the NACOLG Region), posted the second lowest statewide rate of underemployment‐ 22.8% or 23,560 underemployed workers, up from 19.4% in 2004. Although county‐level estimates are much less certain statistically due to lower response rates, Franklin County reported the lowest rate of underemployment, at 14.3%. Although dated to a pre‐recession period, the data indicate a significant underemployment issue prior to the recession, which would reasonably indicate a persistent problem in its aftermath.

Underemployment was cited as a significant and growing concern througghout the region. Individuals expressed concern that employment opportunities were limited for skilled workers, leading to lower earnings and population loss.

3.2 Personal Income, Earnings and Benefits

Personal income and the earnings of workers is another important indicator of economic health. The wage earned by an employee translates into a standard of living in obvious ways. Also important is the relationship between earnings, the distribution of earnings, and such quality of life issues as economic fragmentation and affordable cost‐of‐living. An understanding not only of average wages, but also of wealth distributions, as well as cost of living and earnings relative to other geographic locations is necessary in order to understand the effect of earnings on the local economy. Many decisions such as whether to seek employment in the local economy or elsewhere (or whether to seek employment at all), the likely skill level needed by employees (assuming higher skills demand higher wages), and the attractiveness of jobs in the local economy (i.e. who decides to come to the region to work) are strongly influenced by wages and earnings.

3.2.1 Median Household Income and Income Distribution

Table 3.4 provides information on the median household income and the distribution of income in the region as reported in the American Communities Survey of the U.S. Census Bureau. Incomes in the region lagged behind those of the nation and the state and tended to concentrate in the lower ranges. Improvements to household income and quality of life associated with higher incomes remains a significant challenge for the region.

Table 3.3: Household Income Household Income ($2010) United Alabama Colbert Franklin Lauderdale Marion Winston States Total households 114,235,996 1,821,210 22,165 12,367 37,713 12,744 9,478 Less than $10,000 7.2% 10.3% 9.9% 11.7% 11.0% 10.9% 11.1% $10,000 to $14,999 5.5% 7.2% 8.8% 9.5% 9.3% 8.6% 10.2% $15,000 to $24,999 10.8% 13.3% 13.8% 16.6% 13.7% 20.1% 17.5% $25,000 to $34,999 10.5% 11.7% 12.4% 13.7% 11.1% 13.8% 12.4% $35,000 to $49,999 14.1% 14.7% 15.6% 13.9% 14.9% 12.9% 14.5% $50,000 to $74,999 18.6% 17.7% 18.3% 18.5% 15.8% 18.0% 20.3% $75,000 to $99,999 12.3% 10.6% 11.0% 7.7% 10.8% 7.9% 5.8% $100,000 to $149,999 12.3% 9.4% 7.1% 5.6% 9.4% 5.2% 4.8% $150,000 to $199,999 4.4% 2.8% 1.7% 1.6% 1.8% 1.2% 1.1% $200,000 or more 4.2% 2.3% 1.4% 1.1% 2.1% 1.4% 2.3% Median household income 51,914 42,081 39,610 33,942 39,345 32,769 33,685 (dollars) Mean household income 70,883 57,655 50,479 46,038 52,999 45,173 45,163 (dollars)

3.2.2 Personal Income

Table 3.4 displays total personal income for the United States, the Southeast, Alabama, the regional study areas, and regional comparison areas for various components of wealth for 2010 and change from 2005‐2010. The following statistics from Table 3.4 are referenced in the discussion that follows:

Gross earnings by place of work is a measure of the total value of all incomes produced in a particular geographic location‐ regardless of the place of residence of the worker.

Net earnings of residents is a measure of the total earnings of all residents of the geographic area after withholding for contributions to SSI and commuting.

Commuting adjustment is the difference between earnings of residents working in different locations and the earnings of non‐residents employed locally; thus it represents the difference in incomes “brought home” by residents and that “sent out” with non‐resident workers.

Unearned income represents payments from sources other than working‐ either investments, savings (including pensions) and properties (dividend interest and rent) or social security, government retirement, unemployment or disability (transfers). This is a particularly important measure of income since net wealth is usually tied to income producing investments of various types. Therefore, this source of income is a measure of the approximate net value of the value of investments in various forms‐ from property to savings.

Per capita personal income is an indicator of community earnings, equalized by total population. Note: Per capita personal income does not measure the probable earnings or wage per worker.

Table 3.4: Derivation of Personal Income United States Colbert Franklin

Description Change Change Change 2010 2005-10 2010 2005-10 2010 2005-10 Income by place of residence (thousands of dollars) Personal income (thousands of dollars) 12353577000 17.92% 1681337 21.95% 809172 9.13% Nonfarm personal income 1/ 12278295000 17.98% 1669089 22.63% 798416 15.92% Farm income 2/ 75282000 7.80% 12248 -30.58% 10756 -79.58% Population (persons) 3/ 309330219 4.67% 54491 0.24% 31723 2.44% Per capita personal income (dollars) 4/ 39937 12.65% 30855 21.65% 25507 6.54% Derivation of personal income Earnings by place of work 8986229000 10.67% 1275437 15.13% 438581 -5.52% Less: Contributions for government social insurance 5/ 985182000 13.08% 158823 22.06% 58833 14.90% Employee and self-employed contributions for government social insurance 512816000 15.37% 83641 22.21% 31186 11.53% Employer contributions for government social insurance 472366000 10.69% 75182 21.89% 27647 18.95% Plus: Adjustment for residence 6/ 845000 14.50% -190210 43.54% 50949 -2.59% Equals: Net earnings by place of residence 8001892000 10.38% 926404 9.61% 430697 -7.44% Plus: Dividends, interest, and rent 7/ 2070501000 20.45% 246059 30.86% 105057 21.11% Plus: Personal current transfer receipts 2281184000 51.22% 508874 47.26% 273418 44.37% Components of earnings by place of work (thousands of dollars) Wage and salary disbursements 6400786000 12.40% 931987 19.83% 329248 12.42% Supplements to wages and salaries 1551791000 14.92% 265897 23.73% 94422 24.44% Employer contributions for employee pension and insurance funds 1079425000 16.88% 190715 24.47% 66775 26.86% Employer contributions for government social insurance 472366000 10.69% 75182 21.89% 27647 18.95% Proprietors' income 8/ 1033652000 -3.82% 77553 -32.65% 14911 -84.38% Farm proprietors' income 49441000 1.35% 10236 -36.63% 8859 -82.76% Nonfarm proprietors' income 984211000 -4.06% 67317 -32.00% 6052 -86.28% Employment (number of jobs) Total employment 173767400 0.70% 29612 2.23% 14143 -5.51% Wage and salary employment 136055000 -2.51% 23618 0.25% 10964 -7.42% Proprietors employment 37712400 14.29% 5994 10.86% 3179 1.76%

Table 3.4: Derivation of Personal Income Lauderdale Marion Winston Change Change Change Description 2010 2005-10 2010 2005-10 2010 2005-10 Income by place of residence (thousands of dollars) Personal income (thousands of dollars) 2879338 22.00% 793972 10.97% 622377 7.48% Nonfarm personal income 1/ 2840095 22.22% 778588 11.29% 620090 13.80% Farm income 2/ 39243 8.17% 15384 -3.20% 2287 -93.31% Population (persons) 3/ 92727 3.77% 30781 0.94% 24395 -0.95% Per capita personal income (dollars) 4/ 31052 17.57% 25794 9.93% 25512 8.51% Derivation of personal income Earnings by place of work 1425984 13.35% 459026 -9.25% 291685 -23.91% Less: Contributions for government social insurance 5/ 177642 18.39% 57884 -3.49% 40856 -7.23% Employee and self-employed contributions for government social insurance 98951 20.39% 32476 1.89% 22678 -3.19% Employer contributions for government social insurance 78691 15.97% 25408 -9.60% 18178 -11.82% - Plus: Adjustment for residence 6/ 413529 26.07% 4593 178.97% 32730 37.47% Equals: Net earnings by place of residence 1661871 15.72% 405735 -7.79% 283559 -18.19% Plus: Dividends, interest, and rent 7/ 478231 12.83% 117493 30.17% 99504 39.75% Plus: Personal current transfer receipts 739236 47.81% 270744 46.20% 239314 48.40% Components of earnings by place of work (thousands of dollars) Wage and salary disbursements 975163 14.10% 309436 -10.11% 210103 -16.28% Supplements to wages and salaries 254146 21.03% 86621 -2.08% 60846 -2.36% Employer contributions for employee pension and insurance funds 175455 23.45% 61213 1.42% 42668 2.32% Employer contributions for government social insurance 78691 15.97% 25408 -9.60% 18178 -11.82% Proprietors' income 8/ 196675 1.68% 62969 -13.86% 20736 -70.40% Farm proprietors' income 36878 6.65% 14485 -5.08% 1088 -96.69% Nonfarm proprietors' income 159797 0.59% 48484 -16.18% 19648 -47.18% Employment (number of jobs) Total employment 43577 1.24% 13642 -17.03% 9671 -18.42% Wage and salary employment 32934 -0.61% 9959 -21.89% 7413 -23.59% Proprietors employment 10643 7.42% 3683 -0.24% 2258 4.88%

United States: Gross and net earnings in the United States increased by 10.67% and 10.38%, respectively between 2005 and 2010. Income earned elsewhere and brought into the United States increased by 14.50%. Income from dividends, interest and rent increased by 20.45% and income from transfer payments went up by 51.22%. Total personal income increased by 17.92%. Per capita income increased 12.65%.

Colbert County: Gross and net earnings in Colbert County increased by 15.13% and 9.61%, respectively between 2005 and 2010. Income earned elsewhere and brought into Colbert County increased by 43.54%. Income from dividends, interest and rent increased by 30.86% and income from transfer payments went up by 47.26%. Total personal income increased by 21.95%. Per capita personal income increased 21.65%.

Franklin County: Gross and net earnings in Franklin County decreased by 5.52% and 7.44%, respectively between 2005 and 2010. Income earned elsewhere and brought into Franklin County decreased by 2.59%. Income from dividends, interest and rent increased by 21.11% and income from transfer payments went up by 44.37%. Total personal income increased by 9.13%. Per capita personal income increased 6.54%.

Lauderdale County: Gross and net earnings in Lauderdale County increased by 13.35% and 15.72%, respectively between 2005 and 2010. Income earned elsewhere and brought into Lauderdale County increased by 26.07%. Income from dividends, interest and rent increased by 12.83% and income from transfer payments went up by 47.81%. Total personal income increased by 22.00%. Per capita personal income increased 17.57%.

Marion County: Gross and net earnings in Marion County decreased by 9.25% and 7.79%, respectively between 2005 and 2010. Income earned elsewhere and brought into the United States increased by 178.97%. Income from dividends, interest and rent increased by 30.17% and income from transfer payments went up by 46.20%. Total personal income increased by 10.97%. Per capita personal income increased 9.93%.

Winston County: Gross and net earnings in Winston County decreased by 23.91% and 18.19%, respectively between 2005 and 2010. Income earned elsewhere and brought into the United States increased by 37.47%. Income from dividends, interest and rent increased by 39.75% and income from transfer payments went up by 48.40%. Total personal income increased by 7.48%. Per capita personal income increased 8.51%.

The decline in both gross and net earnings in Franklin, Marion, and Winston counties represents a particularly alarming trend, signaling less economic opportunity for workers. Lackluster improvements in personal income and per capita personal income were also experienced in these counties. Elsewhere, earnings improved in Colbert and Lauderdale counties at a rate higher than the national average, a sign of reasonably good performance during the recession. Throughout the region, income from interest, dividends, and rent increased at a steady pace, with Lauderdale County trailing the rest of the region in the rate of growth. The noteworthy rise in transfer payments national and in the regional economy likely

reflects, in part, an increase in payments from sources such as unemployment compensation during the recessionary period.

3.2.3 Earnings

Table 3.5 shows information on earnings at different points in time and across different points in the business cycle from 1990 to 2010. Table 3.6 shows the average wage per job at selected years. Table 3.7 and Table 3.8 show average annual change from point to point for earnings and average wages per job. Information is from the Bureau of Economic Analysis (BEA)10. All information is adjusted to equal the value of a dollar in 2010 as shown by the Bureau of Labor Statistics inflation calculator11.

Net Earnings is the total of all income earned in a particular geography, reported annually.

Average wage per job are the total earnings from work in the geographic area divided by the total number of jobs in the geographic area. As an aggregate measure that does not address the distribution of earnings, total earnings per job does not measure the likely earnings or wage per job.

Table 3.5 Net Earnings, Selected Years (1000s of 1990 1991 2001 2007 2009 2010 $2010) Net Net Net Net Net Net Earnings Earnings Earnings Earnings Earnings Earnings United States 5455073370 5373992000 7519456170 8.38E+09 7920652920 8001892000 Alabama 71013009.2 71855969.6 90727952.5 1.03E+08 99127009.9 98503810 Colbert, AL 892317.74 890460.8 881943.21 955038 923257.08 926404 Franklin, AL 370502.86 386918.4 510079.77 476563.5 444504.78 430697 Lauderdale, AL 1375098.04 1378198.4 1524591.15 1658256 1623311.64 1661871 Marion, AL 376162.49 377430.4 412361.19 469311.2 420490.92 405735 Winston, AL 289781.74 300801.6 347062.95 347007.2 296667 283559

Table 3.6 Average Wage per job, Selected 1990 1991 2001 2007 2009 2010 Years ($2010) Average Average Average Average Average Average Wage per Wage per Wage per Wage Wage per Wage Job Job Job per Job Job per Job United States 44365.22 44030.4 50865.42 52181.85 51096.9 51714 Alabama state total 38657.16 38921.6 42503.88 43297.8 43881.42 43955 Colbert, AL 44306.77 43080 40410.42 41791.05 41802.66 43072 Franklin, AL 27289.47 27995.2 34736.43 31582.95 32509.44 31010 Lauderdale, AL 29926.4 29966.4 32175.57 31727.85 32845.02 32723 Marion, AL 30515.91 30832 31173.12 33068.7 33658.98 33648 Winston, AL 27972.5 29398.4 32540.88 32103.75 31572.06 30161

10 http://www.bea.gov/iTable/iTable.cfm?ReqID=70&step=1&isuri=1&acrdn=5 11 http://www.bls.gov/data/inflation_calculator.htm

Table 3.7: Average Annual Percent Change Net Earnings, 2007- 1990- Selected 1990-1991 1991-2001 2001-2007 2009 2009-2010 2010 Years ($2010) Net Net Net Net Net Net Earnings Earnings Earnings Earnings Earnings Earnings United States -1.49% 3.99% 1.91% -2.75% 0.51% 2.33% Alabama state total 1.19% 2.63%2.20% -1.73% -0.31% 1.94% Colbert, AL -0.21% -0.10% 1.38% -1.66% 0.17% 0.19% Franklin, AL 4.43% 3.18% -1.10% -3.36% -1.55% 0.81% Lauderdale, AL 0.23% 1.06% 1.46% -1.05% 1.19% 1.04% Marion, AL 0.34% 0.93% 2.30% -5.20% -1.75% 0.39% Winston, AL 3.80% 1.54% 0.00% -7.25% -2.21% -0.11%

Table 3.7: Average Annual Percent Change Average Wage per Job, 2007- 1990- Selected 1990-1991 1991-2001 2001-2007 2009 2009-2010 2010 Years ($2010) Average Average Average Average Average Average Wage per Wage per Wage per Wage Wage per Wage Job Job Job per Job Job per Job United States -0.75% 1.55% 0.43% -1.04% 0.60% 0.83% Alabama state total 0.68% 0.92%0.31% 0.67% 0.08% 0.69% Colbert, AL -2.77% -0.62% 0.57% 0.01% 1.52% -0.14% Franklin, AL 2.59% 2.41% -1.51% 1.47% -2.31% 0.68% Lauderdale, AL 0.13% 0.74% -0.23% 1.76% -0.19% 0.47% Marion, AL 1.04% 0.11% 1.01% 0.89% -0.02% 0.51% Winston, AL 5.10% 1.07% -0.22% -0.83% -2.23% 0.39%

As these tables illustrate, from 1990‐91 the state and the counties of the northwest Alabama region generally fared better than the nation during the economic downturn, with less of a decline in earnings and wages than nationally. In subsequent periods, however, the regions rate of growth tended to perform nless well tha the nation. Although there are sporadic exceptions, such as the growth experienced in Franklin County’s wages from 1991‐2001 and 2007‐2009, the general trend has been toward lower performance in the creation of new earnings and higher wages. Over the long term, the average annual growth of each county in the region was lower than the nation or the state. Combined with a generally lower base wealth and earnings, these numbers provide clear indication of the need for higher quality jobs and economic development in the region.

3.3 Industry Profile

The characteristics of the regional economy can also be described in terms of the concentrations of industries found in the local economy. Measurements of the industrial sectors most influential to the economy can assist in describing present economic conditions, recognizing potential for investment and expansion, as well as identifying potential opportunities for reinvestment. In many ways, the tools available to identify and describe industry are similar to those available to describe workers because the most common measures of industry are based on employment characteristics‐‐ income (i.e. value of the payroll of all producers in a particular sector) eand th number of employees in all producers in a particular sector.

The distribution of income and employment across industrial sectors can indicate the degree of specialization present in a local economy and indicate the industries that are most vital to the local economy. Comparisons based on growth trends over time can point toward the potential for growth or decline in an industry. The current level of employment concentration and income produced in a particular sector, compared to trends in that sector (local, national and in a comparison area), can lend insight as to the need for policy changes to counteract decline in particular industries or to promote growth in existing and new sectors. This section describes these characteristics and the trends of the local economy in terms of income and employment distribution across industrial sectors. However, this quantitative approach does not supplant qualitative assessments in the process of deliberating policies. Such an analysis may point out a direction for further inquiry, but common understanding about the importance of particular industries or businesses and an understanding of local cultural and historical attitudes are still priorities when determining an appropriate course of action.

3.3.1 Distribution and Change in Employment by Industrial Sector

Table 3.8 presents information on the major employment sectors of the nation, the State of Alabama and the counties of the region. As indicated, Lauderdale County has the largest employment base of any county in the region, with 25,031 jobs, followed by Colbert County with 16,447. Franklin, Marion, and Winston counties trailed considerably, with Franklin County having slightly more than half the employment base of Colbert County and Marion and Winston having less than half the employment base of Colbert County.

Table 3.8: Industry Super Sector Employment Industry U.S. TOTAL Alabama Colbert Franklin Lauderdale Marion Winston Base Industry: Total, all industries 108,165,289 1,449,086 16,447 8,283 25,031 7,644 5,771 Natural resources and mining 1,889,967 19,880 153 165 130 91 108 Construction 5,470,906 80,809 1,508 198 1,265 172 140 Manufacturing 11,701,587 237,337 4,231 4,005 3,548 3,074 2,646 Trade, transportation, 24,815,017 360,932 4,118 1,567 6,642 1,496 1,196 and utilities Information 2,675,278 23,086 109 48 381 38 67 Financial activities 7,416,512 89,818 774 385 1,218 343 229 Professional and business services 17,295,298 212,902 1,105 190 2,899 469 194 Education and health 19,020,435 210,141 2,284 959 4,395 1,239 757 services Leisure and hospitality 13,294,199 169,170 1,638 617 3,805 578 363 Other services 4,406,825 45,010 528 151 748 145 71 Unclassified 179,265 NC NC NC NC NC NC

Table 3.9 presents the information in terms of the percentage of total employment in each area. Compared with the rest of the nation, the counties of the region had considerably higher concentrations of employees in Manufacturing, with a low of 14.7% of jobs in this sector in Lauderdale County and a high concentration of 48.35% in Franklin County. Meanwhile, the concentration of employment in Information and Professional and Business Services sectors was considerably smaller than the national average. Leisure and Hospitality, a sector of major focus in the state and in Colbert and Lauderdale counties, was higher than the national average in Lauderdale County and lower in both Colbert and statewide.

Table 3.9: Industry Super Sector Employment Concentrations Industry U.S. Alabam Lauderdal Winsto Colbert Franklin Marion TOTAL a e n Base Industry: Total, 100.00 100.00 100.00 100.00 100.00% 100.00% 100.00% all industries % % % % Natural resources and mining 1.75% 1.37% 0.93% 1.99% 0.52% 1.19% 1.87% Construction 5.06% 5.58% 9.17% 2.39% 5.05% 2.25% 2.43% Manufacturing 10.82% 16.38% 25.73% 48.35% 14.17% 40.21% 45.85% Trade, transportation, and 22.94% 24.91% 25.04% 18.92% 26.54% 19.57% 20.72% utilities Information 2.47% 1.59% 0.66% 0.58% 1.52% 0.50% 1.16% Financial activities 6.86% 6.20% 4.71% 4.65% 4.87% 4.49% 3.97% Professional and business services 15.99% 14.69% 6.72% 2.29% 11.58% 6.14% 3.36% Education and health services 17.58% 14.50% 13.89% 11.58% 17.56% 16.21% 13.12% Leisure and 12.29% 11.67% 9.96% 7.45% 15.20% 7.56% 6.29% hospitality Other services 4.07% 3.11% 3.21% 1.82% 2.99% 1.90% 1.23% Unclassified 0.17% NC NC NC NC NC NC

Table 3.10 presents employment data as location quotients, which are a numerical comparison of the concentration of employment in the study area to the concentration of employment in the comparison area (in this case, nationally). The more heavily a sector is concentrated within the local economy, the higher the value of its location quotient. A value less than 1 represents a smaller concentration of employment in that sector than nationally. A value greater than 1 indicates that employment is more heavily concentrated in that sector within the study area than within the comparison area. Such concentration is typically referred to as a specialization, a term which recognizes the skills and knowledge of the local economy that are likely to be present along with a larger than average number of employees being in that sector. Typically, specializations are noted as strengths to the local economy, depending on the growth or decline in the national competitiveness of that sector.

For the State of Alabama and each county, the concentration of employment in manufacturing represented a strong area of specialization. Weaker location quotients varied by county across the region.

Table 3.10: Industry Super Sector Location Quotient Industry Alabama Colbert Franklin Lauderdale Marion Winston Base Industry: Total, all 1 1 1 1 1 1 industries Natural resources and mining 0.79 0.53 1.14 0.3 0.68 1.07 Construction 1.1 1.81 0.47 1 0.44 0.48 Manufacturing 1.51 2.38 4.47 1.31 3.72 4.24 Trade, transportation, 1.09 1.09 0.82 1.16 0.85 0.9 and utilities Information 0.64 0.27 0.23 0.62 0.2 0.47 Financial 0.9 0.69 0.68 0.71 0.65 0.58 activities Professional and business services 0.92 0.42 0.14 0.72 0.38 0.21 Education and health services 0.82 0.79 0.66 1 0.92 0.75 Leisure and hospitality 0.95 0.81 0.61 1.24 0.62 0.51 Other services 0.76 0.79 0.45 0.73 0.47 0.3 Unclassified NC NC NC NC NC NC

Table 3.11 displays information on the annual average rate of change, growth or decline, in industry sector employment from 2009‐2011. In terms of total employment, Colbert, Franklin, and Lauderdale counties have experienced job growth at a rate faster than the national average. Winston County’s job growth was slightly below the national average and in line with the State of Alabama’s performance for the same period. Marion County, however, experienced significantly worse job creation than nationally or in other counties in the period from 2009‐2011. When viewed by industry sector, Manufacturing growth was particularly evident in Colbert and Franklin counties, followed by strong performance in Lauderdale and Winston. Again, Marion County produced negative rates. In the Information sector, only Colbert County experienced growth in the period studied.

Table 3.11: Industry Sector Change Industry U.S. Alabama Colbert Franklin Lauderdale Marion Winston Base Industry: Total, all 0.38% ‐0.32% 2.06% 1.97% 1.55% ‐1.63% 0.30% industries Natural resources and 1.99% 0.45% 5.90% 0.62% ‐2.82% ‐8.47% ‐3.58% mining ‐2.68% ‐3.93% 1.36% 1.22% ‐3.72% ‐0.38% 3.41% Construction ‐0.31% ‐1.37% 4.42% 4.39% 2.51% ‐0.90% 1.86% Manufacturing Trade, transportation, 0.22% ‐0.06% 1.33% 6.06% ‐0.11% ‐0.44% 0.45% and utilities ‐1.57% ‐2.44% 4.91% ‐3.14% ‐6.20% ‐2.44% ‐0.49% Information Financial ‐0.76% ‐1.18% ‐1.44% ‐2.11% ‐2.13% 1.95% ‐1.39% activities Professional and business 1.63% 1.31% ‐2.66% ‐17.09% 0.14% ‐13.24% ‐13.13% services Education and 1.27% 0.91% 9.29% ‐2.18% 11.80% 0.05% 0.31% health services Leisure and 0.75% ‐0.15% ‐2.36% 2.43% 0.86% ‐0.29% 2.05% hospitality 0.28% ‐0.20% ‐1.96% 0.68% ‐1.33% 14.05% 1.99% Other services Unclassified NC NC NC NC NC NC NC

Table 3.12 presents the results of a technique known as shift‐share analysis from 2001 to 201012. This technique indicates changes in the competitiveness of a sector by comparing the rate of change in employment in that sector, over time, between the county and the nation. By evaluating the local employment trends in the context of both time and national trends, a clearer picture of the competitiveness of the local sector emerges. The technique separates components of growth that are attributable to national and sector‐based trends and presents the remaining changes as the share of industry growth attributable to the local economy. The local share estimates are presented below. These figures represent an estimate of the growth or decline of industries due only to local conditions, not the total growth or decline.

12 Performed with the University of Georgia’s Shift‐share Analysis of Regional Employment, an online tool accessible at http://www.georgiastats.uga.edu/sshare1.html

Table 3.12: Shift‐share, competitive percentage Industry Colbert Franklin Lauderdale Marion Winston Natural resources 18.60% ‐27.10% ‐8.10% 1.10% 36.80% and mining Construction 22.80% 22.20% 15.60% 34.10% ‐17.60% Manufacturing 22.70% 24.30% ‐11.70% ‐2.90% ‐14.10% Trade, transportation, and 3.10% 10.60% 4.00% 4.50% ‐7.10% utilities Information ‐23.40% 14.50% ‐1.90% 14.70% 5.10% Financial activities 10.70% 14.90% ‐0.80% ‐0.60% ‐32.90% Professional and ‐28.20% ‐78.80% 56.50% 95.60% 270.70% business services Education and 4.70% ‐14.20% ‐18.90% ‐14.10% ‐12.80% health services Leisure and ‐13.60% ‐4.90% 14.10% ‐4.20% ‐7.30% hospitality Other services 72.30% ‐18.50% ‐17.40% ‐34.10% ‐20.40%

3.3.6 Summary: Economic Base Profile

Combining the three basic information types presented above (growth rates, specialization/concentration, and shift‐share/competitiveness) allows for a profile of the economic base of the region. This classification system divides economic sectors into 8 categories based on performance in terms of these characteristics. This profile proceeds in three steps:

Step 1: Derive location quotients to distinguish industry specializations. Specializations presumably include export opportunities (i.e. industries that produce a larger share of product than is consumed locally‐ an assumption based on the fact that employment is higher locally) and represent potential retention targets. Others represent import substitution opportunities (i.e. industries that are not fully meeting local demand and could, conceivably, expand production to meet local demand) or emerging industry targets.

Step 2: Are local sectors experiencing growth locally?

Step 3: Compared to national trends over the study period (i.e. shift‐share), how do local sectors fare? Sectors that are growing faster locally than elsewhere are Strong performers; those growing slower than elsewhere are lagging performers; industries declining locally, but not as rapidly as elsewhere are constrained performers; and sectors that are declining locally and in the wider economy, but at a greater rate locally, are poor performers.

Table 3.13 shows the economic base profile for the region according to this classification. As shown, the strengths and weaknesses vary by county. Naturally, sub‐sector analysis and specific industry profiles are needed for firm conclusions, but the classification gives guidance to the overall direction of

the local economy in each county of the region and a point of departure for further efforts to identify specific industry targets.

Table 3.13: Colbert County Sector classification Industry Colbert Franklin Lauderdale Marion Winston Constrained Lagging Constrained Strong Performer: Natural performer. High Performer: Performer. Weak base, resources and Priority Poor Performer. External trends. Emerging External Trends. mining Retention Lower priority Strength Prospects Target retention target limited Lagging Constrained Constrained Performer: Strong Strong Performer: Performer: Weak Base, Performer. Performer. Weak base, Construction External trends. Declining Current Emerging External Trends. Lower priority Competitive‐ Strength Strength Prospects retention target ness. Prospects limited limited Lagging Constrained Lagging Strong Strong performer. High Performer: performer. High Performer. Performer. Manufacturing Priority External trends. Priority Current Current Retention Lower priority Retention Strength Strength Target retention target Target Lagging Constrained Constrained Performer: Strong Strong Performer: Trade, Performer: Weak Base, Performer. Performer. Weak base, transportation, External trends. Declining Current Emerging External Trends. and utilities Lower priority Competitive‐ Strength Strength Prospects retention target ness. Prospects limited limited Lagging Constrained Constrained Constrained Performer: Performer: Performer: Performer: Weak Base, Weak base, Weak base, Weak base, Information Declining Poor Performer. External Trends. External Trends. External Trends. Competitive‐ Prospects Prospects Prospects ness. Prospects limited limited limited limited Lagging Constrained Constrained Performer: Performer: Performer: Weak Base, Financial Weak base, Weak base, Poor Performer. Declining Poor Performer. activities External Trends. External Trends. Competitive‐ Prospects Prospects ness. Prospects limited limited limited Professional Strong Constrained Constrained and business Poor Performer. Poor Performer. Performer. Performer: Performer: services Emerging Weak base, Weak base,

Strength External Trends. External Trends. Prospects Prospects limited limited Lagging Lagging Lagging Performer: Performer: Strong performer. High Weak Base, Weak Base, Education and Performer. Poor Performer. Priority Declining Declining health services Emerging Retention Competitive‐ Competitive‐ Strength Target ness. Prospects ness. Prospects limited limited Lagging Lagging Performer: Performer: Strong Weak Base, Weak Base, Leisure and Performer. Poor Performer. Declining Poor Performer. Declining hospitality Current Competitive‐ Competitive‐ Strength ness. Prospects ness. Prospects limited limited Lagging Lagging Lagging Constrained Performer: Performer: Performer: Performer: Weak Base, Weak Base, Weak Base, Weak base, Other services Declining Poor Performer. Declining Declining External Trends. Competitive‐ Competitive‐ Competitive‐ Prospects ness. Prospects ness. Prospects ness. Prospects limited limited limited limited

This purely quantitative classification should be tempered with an understanding of local conditions (and additional research). However, such a preliminary profile may point toward potential retention and attraction sectors and sectors in need of additional study because they are obvious retention/attraction targets or because they are obviously misrepresented in the profile. Much additional information and research is required in order to develop strategies for understanding, leveraging, and changing the economic base of the region for the benefit of area residents. In combination with the cluster analysis presented below, future research should expand upon these profiling methods and incorporate additional qualitative assessments, as well as explore “job quality” measures such as pay and benefits in meaningful ways.

3.4 Economic Clusters

An economic cluster is a core of related employment sectors that work together to produce goods and services. In contrast to a sector, which is defined based on similar industries categorized by outputs, a cluster is a group of activities located in a similar geography, which work together through all stages of production, from inputs (including goods and services) to outputs. Cluster‐based economic development is founded in the concept of targeting investments to conform to the economic strengths of the region or to develop new economic strengths and increase the concentration of inter‐dependent, growth‐oriented enterprises in the regional economy.

Economic clustering allows industries to draw from deep resources in terms of available workforce (and the skill sets of workers), as well as favorable support structures such as education and knowledge‐based resources and to leverage the synergy that exists between potential competitors in the national and global economy. Industrial recruiters benefit from specialized understanding and the ability to promote a skilled workforce. By targeting investments in workforce development to create a reliable source of workers with the skills and socialization necessary to do business, communities can create an environment favorable to those industries. Also, by developing the local economy in a way that induces clustered support networks (in terms of available materials, services, and specialists), industries are able to more efficiently access the specialized services needed for the conduct of business. Additionally, by locating industries in close (or closer) proximity to one another, industrial sectors can benefit from an exchange of knowledge that results from the innovations in production and management techniques of their neighbors. Finally, by investing in competitive clusters, local communities can add insulation against economic downturns in locally important industrial sectors, reinforcing against losses resulting from competitive advances such as the advent of new technologies.

Unfortunately, the process of targeting competitive clusters can be daunting, particularly in a local economic environment characterized by economic dislocations that have resulted from a decline in low‐skill, low‐wage manufacturing employment. This is the condition of much of the region, which has seen job losses in lower‐skill manufacturing due to external labor market competition. A lack of human capital in the form or workers with basic skills and advanced technical training and specialty knowledge‐ based skills makes clustering difficult in Northwest Alabama.

The location quotients above provide some indication of the types of clusters that exist in the region. Additionally, a sub sector analysis of location quotients was performed to indicate areas of greater specialization within the counties of the region. Finally, in order to align with statewide objectives, the State of Alabama’s recommendations for industry targeting from the statewide economic development strategy, Advance Alabama, are incorporated into the Northwest Alabama CEDS.

3.4.1 Sector Industry Specialization

The development of viable economic clusters in a region where such they are not currently located is a difficult, expensive, and oftentimes unsuccessful endeavor. The analysis of industrial sectors does not always reveal underlying connections between different activities with different outputs, such as the specialized inspections or accounting related to agricultural production. However, as a basis for further analysis, sector level location quotients can indicate areas of further study. Table 3.14 displays the subsector location quotients for the region that indicate specialization (= or > 1.0) for each county.

Table 3.14 Industry Sector Location Quotients by County Industry Sector Colbert Franklin Lauderdale Marion Winston NAICS 11 Agriculture, forestry, fishing and hunting 0.28 1.02 0.48 ND ND NAICS 21 Mining, quarrying, and oil and gas extraction 0.94 1.31 NC ND ND NAICS 22 Utilities ND ND ND 0.95 ND NAICS 23 Construction 1.81 0.47 1 0.44 0.48 NAICS 31‐33 Manufacturing 2.38 4.47 1.31 3.72 4.24 NAICS 42 Wholesale trade 1.04 ND 1.01 0.58 0.73 NAICS 44‐45 Retail trade 1.24 0.91 1.5 0.94 0.95 NAICS 54 Professional and technical services 0.21 0.21 0.43 0.15 0.14 NAICS 55 Management of companies and enterprises 0.08 0.26 0.26 0.05 0.32 NAICS 56 Administrative and waste services 0.71 0.05 1.13 0.7 0.25 NAICS 61 Educational services 0.12 ND 0.45 ND NC NAICS 62 Health care and social assistance 0.89 ND 1.08 ND 0.86 NAICS 48‐49 Transportation and warehousing ND 1 ND 0.87 ND NAICS 51 Information 0.27 0.23 0.62 0.2 0.47 NAICS 52 Finance and insurance 0.84 0.81 0.68 0.8 0.69 NAICS 53 Real estate and rental and leasing 0.23 0.29 0.79 0.24 0.27 NAICS 71 Arts, entertainment, and recreation 0.29 0.15 0.53 ND ND NAICS 72 Accommodation and food services 0.9 0.68 1.36 ND ND NAICS 81 Other services, except public administration 0.79 0.45 0.73 0.47 0.3 NAICS 99 Unclassified NC NC NC NC NC Footnotes: (NC) Not Calculable, the data does not exist or it is zero (ND) Not Disclosable

Potential Clusters include the following for each county:

Colbert Construction (1.81) Manufacturing (2.38) Wholesale trade (1.04) Retail trade (1.24) Franklin Agriculture, forestry, fishing, and hunting (1.02) Mining, quarrying, and oil and gas extraction (1.31) Manufacturing (4.47) Transportation and warehousing (1.00) Lauderdale Construction (1.00) Manufacturing (1.31) Wholesale trade (1.01)

Retail trade (1.5) Administrative and waste services ( 1.13) Healthcare and social assistance (1.08) Accommodations and food services (1.36) Marion Manufacturing (3.72) Winston Manufacturing (4.24)

3.4.2 Accelerate Alabama Targeted Sectors

Alabama’s state economic development plan, Accelerrate Alabama, identified 11 industry sectors in four related categories for targeting. The strategy was the result of an extensive involvement process and analysis of the State of Alabama’s strengths and areas of expertise.

3.5 Summary: Economic Development Context

The economic development trajectory of the region is characterized by slow recovery since 2009. The Great Recession hit the regional economy hard, however, recent months have shown signs of gradual improvement. Sluggish growth has long been a hallmark of the reggional economy, however, the slow progress of the current post‐recessionary period has been remarkable for two primary reasons. First, while the regional economy is usually slower than the nation to recovery, the nationwide trend of slow recovery is especially evident in the regional economy. Second, in past recoveries, the lag time between the nation exiting a recessionary period and the region experiencing recovery has usually been much greater than in the current recovery period. While it is too soon to properly evaluate the implications of these two trends, the immediate effects are clear: forecasts show a lonng period of

recovery in order to regain ground that was conquered, in terms of employment and unemployment rates, prior to the recession. While the Great Recession seemingly wiped out progress that was achieved over many decades, the current recovery is aided by longstanding efforts to prepare for growth. It is guided by a comprehensive strategy, which is reviewed in the section that follows.

53 Goals, ObjectivesGoals, and Strategies

Section 4.0: Development Economic Priorities in Northwest Alabama

4.0 Economic Development Priorities in Northwest Alabama‐ Goals, Objectives and Strategies

The Comprehensive Economic Development Strategy (CEDS) is a five‐year strategy for economic development in northwest Alabama. It brings together private and public interests to create a guide to economic development for the five‐county region of northwest Alabamat tha includes Lauderdale, Colbert, Franklin, Marion, and Winston Counties. The CEDS is designed as a regional strategic plan. It involves development district partners, including local government representatives, workforce training providers, non‐profit Chambers of Commerce, local economic development authorities; it encompasses a broad range of important initiatives in order to define the economic development landscape of northwest Alabama and direct the Northwest Alabama Council of Local Governments (NACOLG), which is the regional Planning Organization designated by the Economic Development Administration of the U.S. Department of Commerce.

4.1 Vision, goals, and objectives