MONTGOMERY, Ala. (WIAT) — Despite Alabama’s recently announced record low unemployment rate at 2.6%, the state’s workforce participation rate of roughly 57% is among the lowest in the nation, according to July data from the U.S. Bureau of Labor Statistics.

“Alabama has traditionally, and I mean for decades, always been one of the lower labor force participation rate states, and that is still true to this day,” Alabama Department of Labor Communications Director Tara Hutchison said.

Hutchison says things are looking up, though. That 57% participation is up nearly one point from this time last year. She says there are career centers in every county, hiring incentives for employers and ongoing efforts to reach new groups of people.

The department will be holding a job fair alongside other state agencies in October for people with disabilities, and initiatives are underway to help those soon-to-be released from prison find employment.

“You have a lot of different populations out there that we can pay a lot more attention to try to get them more involved,” Hutchison said.

Alabama ended its participation in federal pandemic unemployment compensation programs last June, so Hutchison says that hasn’t been a factor in the recent labor participation rate.

Alabama Policy Institute Senior Director of Fiscal Policy Justin Bogie says certain legislation could help, including occupational licensing reform and tax relief.

He says a tax policy that would let workers keep more money in their pockets could go a long way, especially when neighboring states like Tennessee and Florida have eliminated state income taxes.

“We’re sort of at a competitive disadvantage right now to attracting new workers, so when we have people leave the workforce, they just don’t necessarily come back, or there’s no one there to replace them,” Bogie said.

Alabama Workforce Council Chairman Tim McCartney says transportation, childcare and housing are among the biggest barriers to returning to the workforce for those unemployed and underemployed, according to a survey the council conducted.

“There are some programs we’re working on right now with different departments to try to provide more child care opportunities and transportation, so that’s the kind of thing the governor is working on and I think it’s going to help overall, but we’ve got to get that labor force participation rate higher,” McCartney said.

McCartney also says the state is working to ensure there isn’t a major drop-off in benefits once someone returns to work, which can act as a disincentive to employment. He says some of that policy though has to come from the federal level.

The state’s labor force participation rate peaked in 1997 at 65%.