It has been 10 years since Gulf States Steel workers made their final trip through the gates of a plant that had provided thousands of jobs since the early 1900s.
The plant closed in August 2000, throwing about 1,800 employees out of some of the area’s highest-paying jobs and affecting many local businesses that depended heavily on the plant by supplying goods and services.
While unemployment has crept back to high levels because of the national recession, local industrial recruitment and employment officials said they believe the local economy has done a good job of recovering. They point out that several years ago the unemployment rate was lower than before the plant closed — primarily through efforts to diversify the local economy, bring in new jobs and expand existing firms.
“The economy has changed,” Mike McCain, executive director of the Gadsden Etowah Industrial Development Authority, said. “Our economy has become more diversified.”
He said the number of service-sector jobs has increased while the types of manufacturing jobs have changed.
“Most companies today are looking for employees with strong minds, not strong backs,” McCain said.
But McCain wouldn’t say the local economy has recovered completely.
“Those people that were directly affected by the closing of Gulf States Steel, the employees, their families and companies who directly served Gulf States Steel and derived a significant portion of their revenue from that plant, to all of them there really is no recovery,” McCain said. “Things may get better, but in a different way.”
He said from an unemployment rate perspective, and only from that perspective, local unemployment recovered until the national recession hit.
Per family income has risen during the decade, as have tax revenues.
“The economy recovered and improved from those perspectives,” McCain said. “To the person that was forced into retirement and whose quality of life was reduced as a consequence — we didn’t recover from that person’s perspective.”
According to the Bureau of Economic Analysis, Etowah County’s personal per capita income in 2000, which is income from all sources divided by population, was $21,586 and ranked 18th in the state. In 2008, the county’s personal per capita income was $29,947 and ranked 24th in the state.
McCain said trying to diversify the economy was a strategy even before the plant closed.
Six years after the plant closed, McCain said, the area’s work force was at what economists consider “full employment” — anyone who wanted a job was working.
“That is, comparatively speaking, a short period of time, and I think is evidence of the strength of Etowah County’s economy,” McCain said. “I think (it) shows that efforts in the past to diversify the economy did bear some fruit.”
The yearly unemployment average in 2000 according to the Alabama Department of Industrial Relations was 5.2 percent. By 2007, the yearly average had dropped to 3.7 percent, although it has climbed since then. The unemployment rate for the first seven months of this year is 10.6 percent.
Frankie Davis, director of economic development and government affairs for the city of Gadsden, said people learned their skills on the job at the steel plant. Now, he said, industries want skilled workers “right off the bat.”
“We need to focus on bringing in all sizes, but you’re going to have a better opportunity at 100, 200 and 300 jobs at a time than you will 2,000,” Davis said.
He said officials have tried to work with the experts in recruitment and with existing industries to see what they need. Work-force development is one thing being stressed.
Larry Foster, manager of the Gadsden Career Center, said he feels the economy has recovered.
“I think it recovered extremely well,” Foster said. “Before this recession hit, unemployment was way down to the 3 percent figure.”
Foster said because of “benchmarking” by the DIR, comparing unemployment now to 10 years ago is impossible.
According to statistics released in 2000 after the closing of the plant, unemployment peaked in Etowah County in October 2000 at 11.4 percent. But after benchmarking the October 2000 rates, the DIR website said unemployment that month was 6.9 percent. In 2000, DIR said the unemployment rate here was 10.0 percent in November and 8.7 percent in December. That compares to the website that lists November at 10.0 and December at 6.6.
The work force in October 2000 was 51,010, with 5,820 unemployed. After benchmarking, the civilian work force was 48,552 and there were 3,342 unemployed.
An analyst with the DIR in Montgomery said the 2000 statistics first were compiled using 1990 census data, then revised, or “benchmarked,” in 2006 using 2000 Census data. She said the benchmarked data is more accurate and should be compared to the 2010 information.
In July 2010, the county’s civilian work force was 43,861 and there were 4,093 unemployed for an unemployment rate of 9.3 percent.
Foster said having Honda in nearby Lincoln also has helped the economy.
“I never felt like we wouldn’t recover from this,” Foster said, “because people survive, cities survive, and I feel like the city of Gadsden has had a group of people, council members and mayors and so forth, over the last 10 years that have worked for diversifying the work force in this area. They had started trying to do this before the steel plant closed, and it helped by diversifying the type of employment in this area.”
He said there still are a lot of machine shops and more automotive-related businesses.
Earl Guyton was president of Local 2186 of the United Steel Workers when the steel plant closed.
He said some skilled workers who had worked at GSS took jobs outside of the area and continued to work in their trades.
“There wasn’t a lot for the people in this area,” Guyton said.
Guyton said other workers retired — about one-third of the work force had more than 30 years of service — and some workers took classes for additional training.
“I think Gadsden had to level out at the bottom,” he said.
However, he said, city and industrial development officials did a good job of bringing in industry.
“Gadsden is turning around,” Guyton said. “Our leaders had to take it a step at a time, and the decisions they made, most of them have worked, and it has been a mainstay for our people to get back into the market and stay home rather than have to leave for other states.”
Guyton said the economy has recovered better than he thought it would.
But he estimated as many as 60 percent of the people who worked at the plant ended up in jobs that didn’t pay as well.
The average pay for skilled workers at Gulf States was about $18 an hour, Guyton said, and unskilled laborers were paid $12 to $14 an hour.
“If you could step back and look 10 years ago, it was a sad time in our lives and in the life of the people in and around Etowah County, and today there’s hope,” Guyton said.
“We have not recovered because the jobs are different,” said Tom Quinn, president of The Chamber, the chamber of commerce for Gadsden and Etowah County, “but we’re going in more directions as far as economic development.”
Quinn said the chamber again is promoting retiree development. A new tourism board is promoting the area and downtown Gadsden is doing well.
“We have adjusted to what has happened, and I think we are doing quite well, considering,” Quinn said. “The national economy is not helping us any, and that’s part of the problem, and that’s part of what’s slowed us down a little.”
Quinn said when an area loses a military installation or a major employer, it usually takes about 15 years to recover.
“We’ve done extremely well considering all the things that have happened to us,” he said.
By Andy Powell, Times Staff Writer