The Fed Continuously Raises the Benchmark Interest Rate, yet rates remain low.

After meeting for two days, the Federal Reserve went through with an expected increase in the benchmark interest rate, which has now gone up 0.25 percent. Perhaps more surprising was how it mentioned its plans to decrease its balance sheet. Here’s what you need to know about the latest headlines coming out of the Federal Reserve.

A Background on the Benchmark Interest Rate

The Federal Reserve sets the benchmark interest rate to keep the economy strong. It likes to have that interest rate in the 2 to 5 percent range whenever possible, as that’s what’s best for economic growth. At that range, the gross domestic product (GDP) grows, the unemployment rate is low and while prices increase, they do so around the Federal Reserve’s desired inflation rate of 2 percent.

However, it hasn’t always been possible for the Federal Reserve to keep the benchmark interest rate between 2 and 5 percent. In 1979 and 1980, the Federal Reserve raised the benchmark interest rate to a historic high of 20 percent because inflation numbers had been in the double digits for most of the decade.

The benchmark interest rate fluctuated from then on but lowered considerably from that high point. It started dropping more in late 2007, and by 2008, it plummeted because of the Recession. The target rate by December 2008 was 0 to 0.25 percent, which is as low as it gets. The reason that this rate was a range instead of one percentage was because a rate of 0 percent could cause financial issues, such as money market funds with fees that cost more than what they yield.

The benchmark interest rate stayed in that range a full seven years, finally increasing again in December 2015. It went to the 0.25 to 0.5-percent range. One year later, it increased again, hitting 0.5 to 0.75 percent. The Federal Reserve chairperson, Janet Yellen, called this increase a vote of confidence in the U.S. economy. The Federal Reserve also mentioned at this time that it saw the rate increasing three times in 2017.

So far, the Federal Reserve has stayed on pace to hit those marks. An earlier increase this year brought the benchmark interest rate up to 0.75 to 1 percent, and this latest increase on June 14, 2017 brought it up to 1 to 1.25 percent.

What This Says About the Economy

Obviously, the fact that the Federal Reserve is consistently increasing the benchmark interest rate shows that the economy is gradually improving. The jobless rate has gone down quite a bit, and it’s now at 4.3 percent, but it should also continue to decrease. Inflation hit 2 percent early in 2017, although it then dropped back down a bit below that mark. The Federal Reserve isn’t particularly worried about this, though, as they believe that it will bounce back. One factor that has kept inflation down a bit is energy prices going down, and that may be temporary.

Now, for consumers, a higher benchmark interest rate means an increase in credit card and loan interest rates. While the increase hasn’t been anything huge, it does mean people can expect to start paying a bit more if they take out any loans. Just with the increases since December 2015, car loan and home equity rates have gone up about 1 percent.

The Federal Reserve’s Plan to Decrease Its Balance Sheet

This recent announcement was also when the Federal Reserve mentioned how it planned to reduce its balance sheet. During the Recession, the Federal Reserve purchased a large number of bonds, with the cost hitting the trillions of dollars. This was in response to the financial crisis. Bank lending had slowed down significantly, and by purchasing these bonds, the Federal Reserve was able to drive down the cost of borrowing.

This helped protect the economy to an extent, but it also obviously caused a huge increase in the Federal Reserve’s balance sheet. While that balance sheet was below the $1-trillion mark before the Recession, it ended up hitting about $4.5 trillion. Now that the economy is making a recovery, it’s time for the Federal Reserve to cut back on that, and it plan to do so to the tune of up to $600 million per year.

What Effect These Rate Increases Will Have

There have been some arguments regarding whether it’s a good idea to raise the benchmark interest rate. Those against it have mentioned that since the U.S. economy is still fragile while it recovers, making big moves or moving too quickly could each jeopardize the progress that has been made. There’s also the unstable global climate to consider, with Britain deciding to exit the European Union and China’s economy slowing down.

The Federal Reserve carefully monitors the economy, though, and to this point it has only made small increases in the benchmark interest rate. And the numbers are moving in the right direction. At the end of 2016, the unemployment rate was at 4.6 percent so it has gone down 0.3 percent in the last six months or so.

The Federal Reserve now has another six months to raise the benchmark interest rate again and hit its target of three increases in 2017. Most likely, another rate hike would bring it to 1.25 to 1.5 percent, since the Federal Reserve is playing it safe and avoid anything too significant at one time.

On the one hand, consumers who have gotten used to these rock-bottom interest rates will need to pay a bit more when they borrow because of these increases. But the good news is that this is all a positive sign regarding the economy and where it’s going. Ideally, over the next couple years the benchmark interest rate will gradually go back up until it returns to that 2 to 5 percent sweet spot. So, while it may cost a bit more to borrow, the stronger economy means people will have more money in the first place.

How The First Bank Of Alabama And Bank Of Wedowee Merger Will Narrow The Alabama Loan Market

The First Bank of Alabama and Bank of Wedowee merging. The move is expected to affect the Alabama loan market a lot and most likely it will narrow it.The move is a huge financial step which will expand the horizons of The Bank of Alabama. In addition to this, it will add three bank branches which are situated in Randolph County on the hands of the First Bank of Alabama.

This means that this bank will be controlling three service branches which are located in Lincoln, Roanoke, Talladega, Munford, Woodland, and Wedowee. The First Bank of Alabama and the Bank of Wedowee board of directors have both approved this transaction. However, more terms of the merger are yet to be discussed by both parties.

What The Merger Means

1. The partnership will make the Alabama loan market smaller.
2. First Bank of Alabama seeks to gain almost 530 million dollars in overall assets. In addition to this, the bank will also get 270 million dollars in overall loans and 445 million dollars in deposits.
3. The merger will broaden the presence of First Bank of Alabama in the Eastern Alabama region.
4. The acquisition will strategically place The Bank of Alabama near their target market region.
5. The Bank of Alabama will become one of the strongest independently owned community bank in the Alabama region.

Effect Of The Merger On The Alabama Loan Market

Perhaps the most salient feature of the merger of The First Bank of Alabama and Bank of Wedowee is the fact that it will narrow the Alabama loan market. Most Alabama dwellers depend on payday loans and loan sharks to control their financial spending and to finance random expenses. However, with the merger of The Bank of Alabama and Bank of Wedowee, this state of affairs is likely changing as the loan margin will be narrowed.

Most Americans are trying to survive in the tough economic situation that is being experienced all over the world. Nonetheless, a highly controlled temporary credit and loans market is needed to manage the budgets of every household.
All payday lenders in Alabama belong to The Community Financial Services Association Center makes it easier to regulate their activities.

However, when the partnership of the two strong banks in area is complete it means that The First Bank of Alabama will be able to offer loans with the best terms. This will make it easier for most people to acquire reliable loans and in turn the loan market will narrow down to more reliable sources. This will effectively cut back on the rate of ineffective loaners who want to take advantage of borrowers. In addition to this, instances of expensive internet loans and overdrafts are expected to subside.

The First Bank of Alabama CEO and President, Chad Jones was elated during the merger as he emphasized that the acquisition will geographically place the bank on its demographic region. In addition to this, he further pointed out that his team was proud to be associated with the Bank of Wedowee group. He also revealed that the merger will mean that the bank will get the principal market share in Randolph and Talladega regions.

He further pointed out that the combination of his tough management team and the local society; the merger will propel The First Bank of Alabama further. To sum it all up, the CEO was pleased with the acquisition which will place it in the best platform to offer excellent services to its customers. In addition to this he also looked forward to the working harmony of the employees and shareholders from both sides of the divide.

First Bank of Alabama plans to expand its services and offer additional services to not only its customers but also the Bank of Wedowee clients. Some of these services include a mobile app which will handle an Online Financial Wellness center and card management. Other services that the clients from both banks will enjoy include Internet Banking. The CEO OF The Bank of Alabama assured the bank of Wedowee clients that after the merger they will continue enjoying the same excellent service which they have been accustomed to but with another face.

Mitch Key who is the CEO, President and chairman of The Bank of Wedowee is also excited at the move of the merger with the First Bank of Alabama. During a candid speech the CEO also revealed that The Bank of Wedowee respects The Bank of Alabama and that they both share the same values. In addition to this, he promised his clients that they will continue to enjoy the same services and even more once the partnership is complete. Mitch Key will still work as an executive of the establishment even after the merger. He will be stationed at Randolph County.During the merger The First Bank of Alabama legal counsel was Jones Walker and the financial adviser was Stephens Inc. On the other hand, The Bank of Wedowee was financially advised by Porter White and Company and represented legally by Reynolds, Reynolds & Little LLC.

About The First Bank Of Alabama

The First Bank of Alabama was started in 1848 by Major James Isbell in Talladega County. Therefore, this makes the bank one of the oldest in the Alabama region. During its 170 years of existence it has managed to acquire 400 million dollars in acquisitions 202 million dollars in loans and 336 million dollars in deposits. The First Bank of Alabama is a subsidiary of The FirstBanc of Alabama Inc which is a bank holding company. The Alabama-based bank has branches in Munford, Talladega and Lincoln.

About The Bank Of Wedowee

The Bank of Wedowee was started in 1906 by Dr. J.C Swann. The Alabama-based bank has managed to accrue 132 million dollars in assets, 66 million in loans and 111 million dollars over the years which it has existed. The Bank of Wedowee operates under the Swann Bancshares Inc. as a subsidiary. The bank was placed under the company in October 2002. It has branches in Roanoke, Woodland and Wedowee.

Mercedes-Benz spends $1 billion to make Electric Vehicles at Alabama plant

Mercedes-Benz has announced a big move toward electric cars. To do it, the company is allocating $1 billion to its Alabama plant. As you may expect, this emphasis on greener cars is paralleling the company’s trend toward autonomous driving.

What’s Driving Mercedes-Benz?

Mercedes-Benz is planning to challenge every other company, especially Tesla, the upstart luxury company that only makes electric cars. Mercedes has announced plans to go directly after the Tesla market. A letter to investors suggested that Mercedes-Benz expects to outmaneuver Tesla on battery, manufacturing and procurement costs. Of course, the company is also angling to maintain its performance and handling advantage.

The automaker is stepping further away from diesel, especially in light of the Volkswagen diesel scandal, and it is moving nearer to a goal of clean energy vehicles by making this huge investment in the Alabama facility. The company clearly has its eye on the coming sea change in world markets. India and China have announced plans to phase out diesel and gas engines. England, France and other European nations are moving even more quickly toward cleaner cars. Other countries are sure to jump on board as the technology becomes more readily available.

Where Will the Money Go?

Part of that one billion dollars will pay for building a one-million sq.ft. battery facility in Tuscaloosa, AL. That will be one of five such Mercedes facilities worldwide, and it’s only five miles from a current Mercedes assembly plant in Bibb County, AL. Some of the money will be spent on a new body manufacturing shop. Other dollars will go to upgrade computer systems, robotics, and machinery.

In 2019, the company plans to open the Global Logistics Center. This will provide local support to its Bibb County plant, but it will also be part of the worldlwide logistics operation. The Center will ship kits for use in vehicle production overseas. By late 2020, the company expects to offer an after-sales distribution center as part of the GLC. This will act as a North American hub, supplying spare parts to overseas Mercedes-Benz markets.

How Fast Can They Go?

Industry analysts are asking how fast can Mercedes-Benz get its products to market. The company doesn’t expect the Alabama investment to produce vehicles before 2020. By 2022, however, they expect to manufacture 50 electric variants. Before the Alabama announcement, previous statements had suggested only ten.

Since the manufacturer has always emphasized performance, you can bet their engineers will be working to outdo Tesla on horsepower and electric range. That’s a tall order for any car company. Here’s what they are up against. The Tesla 3 has a zero-to-sixty sprint time of 5.6 seconds. It can run for 220 miles before needing a charge. The higher-priced edition shaves the sprint time to 5.1 seconds and boosts range to 310 miles.

Working faster is another stumbling block. Tesla is expected to bring a third model to market shortly, giving it a leg up on the competition. Volvo has announced that it will go strictly hybrid or electric by 2019. In the nonluxury world, the Chevy Bolt EV has become a major player, thanks to its 238-mile range.

What Will They Look Like?

Current hybrids and EVs don’t look too different from their gas-powered counterparts. The newest model is the 2018 S-Class hybrid EV. From the high quality sheet metal to the cutting-edge design, it looks quite like any other beautiful luxury sedan. This car can run for up to 25 miles on electric power alone. The electric torque rate is 325 lb.ft. It also has a performance output of 362 horsepower with the gasoline engine.

The EQA Concept car shows the direction Mercedes intends to go with some of its lineup. As a sporty SUV coupe, it has a compact crossover’s dimensions. The projected electric range is more than 300 miles. Most fascinating, it has a huge touch screen. Covering much of the dashboard, this is the driver’s cockpit. All functions are here, and the knobs and buttons are scarce. Autonomous driving is expected to do much of the work. Since this is a GLC edition, pricing projections run about $50,000.

Once the full vision is realized, drivers can expect to see a whole line-up of electric sedans, coupes and SUVs under the Mercedes-Benz nameplate. Will the current move be quick enough to counter the competition? There’s a lot riding on it, to be sure.

Business Tech Company Creating 300 Jobs In South Alabama

Provalus Set To Create More Than 300 JOBS In South Alabama

Technology is evolving at a breakneck pace, and that is why availing it to potential clients has become a matter of urgency for companies such as Provalus. The enterprise will specialize in the provision of different technological and customer service support to its broad base of clients. The importance of information technology in today’s world cannot be ignored, and with that in mind, it becomes necessary to take services closer to clients and offer them with a much wider scope of products.

Optomi Decides To Invest In South Alabama

Undertaking such measures does not only dig dipper into the operational costs of an enterprise but rather, it helps an organization to remain afloat the highly competitive market of technological offering. The center of operations that will be opened up in Brewton, Alabama, is expected to cost the company about $6.5 million worth of investments. Provalus is a subsidiary of Optomi, which is based in Atlanta. Optomi was incepted with the primary objective of offering state of the art Information Technology services to clients in a much reliable and efficient way.

Reducing The Loss Of Jobs To Overseas Markets

The move to establish Provalus in South Alabama is considered to be in line with the company’s objectives, which is to avail clients with locally developed products that can easily be customized. Additionally, Provalus is an option to the outsourcing of enterprise services from overseas markets. The establishment of Provalus is aimed at preventing the loss jobs to external markets as most American companies specializing in technology had previously opted to take their service out of the country to cut on the costs of operation.

Taking Advantage Of The Untapped Market

By offering the local Americans with a chance of being part of something bigger, then they will automatically reward you by being loyal customers. There is massive talent within local communities in America, which if left untapped, then it all goes to waste. Rather than to utilize the skills of people from different parts of the world, the establishment of Provalus will help to capture all these skills from the rural regions.

Initial Flagship Project

The establishment of Provalus has been flag-shipped by a center where training is already being conducted to get apt personnel, who will work at the primary institution once the main company is rolled out. The center of training is located in Brewton where there is a population of about 5500 people. According to Chuck Ruggiero, who is the president of Provalus, the primary objective is to impart individuals with the right skills that are needed in the process of service delivery.

Additionally, this group of trained individuals will help in the subsequent training of employees who will later be absorbed into the organization. The initial plan is to get 50 well-trained personnel who will sit in the initial establishment of the organization. The company will have three buildings as a base of operations, and this is expected to occupy an area of approximately 60,000 square feet.

Viability Of South Alabama

According to Kay Ivey, who is the governor of Alabama, the county is a very viable place for undertaking business. The rich pool of talent will help Provalus achieve its objectives very swiftly and gain value for the money invested. According to the governor, the establishment of more companies in the region is his ultimate goal, and he seeks to achieve this by providing a more conducive environment for operations through the provision of financial support to companies that look forward to establish their branches in Alabama.

Having more companies will make the region grow as there will be adequate income streaming in from the employment opportunities that will be created. Additionally, Ivey believes that the establishment of enterprises in the American region exhibits the true spirit of statesmanship as it helps to bring back jobs. Some of the major services that will be offered by Provalus are Information Technology Outsourcing (ITO), Business Process Outsourcing (BPO), and Customer Services to its clients. Such services have for a very long time been unavailable in the region, and this will help other enterprises to benefit by not having to outsource services from other areas.

Investing For The Future

Investing in technology is much more promising for investors who want to specialize in this field of service provision. Due to that reason, the Economic Development Group of Alabama is looking create more areas of investment that are based on technology so that it is easy to lure in more investors into the region. The aspect of technology is taking over most of the industries that have been established in today’s economy where everything is moving at lightning speed. Suitable strategies need to be developed now, as this is what will ensure that survival in a more competitive future is possible.

The Eventual Economic Gain

Project Sherlock is the recruitment process of suitable personnel who will work at Provalus. The rural regions provide the company with an appropriate place of getting staff to work in the business. In most cases, it can be quite difficult to find major projects being undertaken by enterprises in such areas. Therefore, it is common to conclude that the human resource is highly underutilized and this provides a very suitable environment where entrepreneurs can undertake their projects. The economic impact that Provalus will have in South Alabama is expected to be massive with a total revenue of $210 million being generated within the initial 20 years of operation.

Alabama Auto Industry Shows Steady Growth Ahead

An industry report on the Alabama auto sector paints the picture of a sector that is on the upswing. According to the 2016 New & Expanding Industry Report the state finished the year with close to 70 functioning auto projects.

The industry provides about 3, 848 jobs as well as $90.7 million in fresh capital injection. Most of the extra projects, slated for 2017 and are currently being undertaken and they have collectively pushed the value of the Alabama auto sector to beyond the $1 billion mark.

The industry covers the entire value chain of the auto sector, including auto parts, service shops and the entire automobile assembling. The Alabama auto industry started in the mid-90s with a Mercedes-Benz auto plant and in recent years has become a central part of the Alabama economy.

Jason Hoff, the CEO of Mercedes-Benz U.S. International has consistently touted Alabama as a great place to do business both for their manufacturers and the suppliers.
Going by the current trajectories the industry grows by about $40 to $80 million in size per annum. Most importantly, the industry has consistently thrived creating new jobs and infrastructure across the state.

Newest Projects

A fair share of the slated projects involve entree by new companies while a smaller chunk constitutes expanding operations, both in the manufacturing and the assembly segments. These include intricate vehicle parts, electric component systems, as well as entire automobiles.

The sectoral growth has been so significant such that Greg Canfield, secretary of the Alabama Department of Commerce remarked. “Our deep roots in the auto industry keep growing deeper,”

To illustrate the scope of the expansion there were a total of new projects in about 26 counties in the state in 2016 alone. The Korean firm Hyundai invested about $52 million in its Alabama assembly facility as part of the investment in the production of their Santa Fe Sport SUV.

On the other hand, car manufacturers MollerTech launched their production and assembly plant in the state in 2016, an event that was graced by key leaders among them the Commerce Sec. Canfield.

The global giant Mercedes who is one of the largest automobile plants in Alabama have had a number of expansion plans involving both their volumes but also their number of plants in the state.

The other manufacturing firms have declared either constriction of new plants of expansion of the existing infrastructure. So far none has announced a reduction or closure which is a mark of confidence in the business environment.

Size and Scope

The major players in the industry include Hyundai, Honda and Mercedes Benz all of whom run a major auto assembly plant. Toyota on the other hand have a major engine plant in the state.

Besides Hyundai is $52 million investment expansion to the Montgomery assembly plant the other major project in the auto industry was the expansion by the Lear Operation Corp.

The 535-job expansion of the Lear group initiated in Tuscaloosa County provided a massive boost to the local economy. This specific plant supplies seating units for the Benz plant in Vance.

Four other major planets have also carried out a major expansion works. These include the MollerTech USA LLC’s $46.3 million new facility. This 222-job factory floor is located in Bibb County.

The Eissmann Automotive North America Inc. has also built a $14.5 million facility in the state. The 200-job expansion project is based in the St. Clair County. They are primarily focused on manufacturing, car interior parts for other assembly plants.
Elsewhere, the Spanish auto giant Truck & Wheel Group is putting up a $30 million plant in Tuscaloosa County. The plant will be focused on the manufacture of parts and it will employ 70 people.

In Lee County, the auto manufacturer The Berghoff Group is also planning to set up a $30 million plant. The precision machining facility will have a 100-job facility.


Promising Outlook

The mood of optimism is so pervasive in the auto sector across the sector, such that the major brand Mercedes recently convened a meeting to discuss in next-Gen SUVs.
The meeting that was graced by Lear, Kamtek, SMP, and other major players so the underlining of the state’s auto sector as a great factory floor for current and future importance.

The automakers have all unanimously underlined the successful partnerships across the sector since its inception in the mid-90s. Mercedes brand in particular has lead in the mergers, acquisitions, partnerships and outsourcing.

“The increasing requirements due to a continual rise in production numbers for the SUV segment was a massive challenge for all suppliers, which was mastered very well,” said Dr. Klaus Zehender. Dr Klaus, who is a member of the divisional board of Mercedes-Benz Cars, in charge of Procurement and Supplier Quality has been instrumental in the brand’s push within the state.

Similar sentiments have been echoed by Jason Hoff, president and CEO of the Mercedes-Benz US International Inc., Alabama facilities. Mercedes-Benz was the first automaker to set up a plant in the state on 14th February 1997.

2017 Momentum

The boom of 2016 has lured new players into the sector. The year 2017 ushered in several large auto sector projects for the state which has set the stage for the future of Alabama’s auto industry, including electric vehicles, self-driving cars and next generation SUVs. Key among the new players include:

•The Spain-based auto industry supplier Grupo Antolin. The firm recently announced plans to invest $10.4 million in a new facility. The manufacturing plant will be in Jefferson County and it is projected to employ 150 people by 2020.

•The other big player who’s announced plans to join the state’s auto sector is the Auto supplier Hanwha Advanced Materials America LLC. They plan to set up a $20 million upgrade project for their manufacturing plant in Opelika. The new developments will add 100 new jobs by 2020.

•The giant Korean automaker Honda announced plans to invest $85 million as part their plans of strengthening logistic efficiency, improve manufacturing flexibility, and preparing for future technologies their Lincoln plant.

The Alabama Loan Repayment Program: Will it Work?

Alabama Loan Repayment Programs give awards to qualified, eligible employees in the medical and legal fields to help them with the repayment of their student loans. The principal reason for these repayment offers is there’s a crucial need for all types of medical and legal services in deserving geographical areas (called health professional shortage areas or HPSAs) where a scarcity of such specialists has been recognized. If recipients are committed to working in these areas for a specified period of time, it is assured that these districts will have the health care and legal assistance needed. The government has decided that this is a worthy task and it is the obligation of the state to correct this deficiency. Thus, they are willing to install a judicious plan that will ultimately keep these professionals working with the government.

Following are the specifics on the loan repayments offered.

National Health Service Corps (NHSC) Loan Repayment Program (LRP)

Eligible primary health care professionals will be awarded $30,000 – $50,000 toward repayment of their health profession student loans provided they meet certain requirements.
Eligible medical clinicians in the following fields are as follows:

  • Primary care physicians;
  • General and pediatric dentists;
  • Nurses;
  • Mental and behavioral health psychologists; and
  • licensed clinical social workers and professional counselors.

Requirements:

  1. Recipients must agree to a two-year work period;
  2. They must work full time;
  3. They must work at an approved NHSC site in the HPSAs (a high-need, underserved area); and
  4. They must be U.S. citizens or U.S. nationals.

This repayment is not subject to federal income and employment taxes and payments begin when recipients begin their services. However, these awards are not included as wages when calculating Social Security benefits. Approved HPSA sites are located across the U.S. in both urban and rural areas.

Eligible primary health care professionals who commit to half-time employment can receive $15,000 – $25,000 toward repayment of their health profession student loans. For all recipients whose outstanding student loan balance is less than the stated awards mentioned, the NHSC LRP will pay that remaining balance provided of course they continue to honor the service contract.

After completing the preliminary service commitment, recipients who still have a balance due on their student loans can apply to continue their service and receive further loan repayment aid. In fact, medical and dental students in their final year can apply for and receive up to $120,000 for a commitment of three more years of full-time employment or six more years of part-time employment at an approved NHSC site. The actual amount received depends on where the recipients serve (service at sites with a higher critical need generates larger loan repayments). For further details of this award program, see the Health Resources & Services Administration website and click on the 2017 Application and Program Guidance.

John R. Justice Student Loan Repayment Program

In the legal field under the state of Alabama, the John R. Justice Student Loan Repayment Program provides loan repayments for state and federal public defenders and state prosecutors who agree to continue in the service as public prosecutors and defenders for at least three years at a full-time status. After reviewing a potential recipient’s circumstances, if it’s decided that this person would have a difficult time paying off his/her student loan, he/she could become a prime candidate for receipt of this award. This is because hardship is an essential part of the eligibility requirements.

If, however, a recipient fails to live up to the service agreement contract, they will enter into “repayment status” which will require that they pay back the remainder of the award. For specific details on how the amounts awarded are determined, visit the Alabama Office of Prosecution Services website and click on the John R. Justice (JRJ) link.

The standard repayment plan on a student loan has a monthly payment of a minimum of $50 with up to 10 years to complete the repayment. Of course the monthly payment amount depends on the amount borrowed and this means that the repayment period could extend up to 25 years. This being the case, it has become increasingly more challenging for potential medical and legal professionals to handle the burden of the escalating costs of education and training. Many find themselves in the position of being forced to change their directions and head to the more lucrative salaries in the private field. The state then finds itself at a loss of many qualified government employees. What follows next is the growth of many areas that lack the provision of proper medical care and legal services and this is not something that can be ignored by the state.

The government’s answer is to handle this crisis by using the financial resources available to them to fulfill this growing need for their citizens. Will they be able to correct this problem to the point of eliminating it altogether and avoiding insolvency? First, keep in mind that this isn’t a money-making venture — it’s payment to retain needed services. Thus, we’re not talking about gaining or losing money. Second, it’s up to the state of Alabama to manage these funds properly by awarding the amounts according to the rules and regulations. Now, if the recipients operate effectively within their professions and remain loyal to their service contracts, it should be an exceptional solution for everyone involved as long as the finances continue to come.

However, if mismanagement by the government officials in charge of the process of disbursing these funds enters into the picture, or the recipients start to renege on their promises and abandon their contract agreements, then the whole endeavor will surely begin to slowly fall apart.

Instead, let’s hope all involved will act in accordance to the guidelines of this procedure as it’s a project that is well worth everyone’s time and energy to make it work.

How Will Agribusiness Exports to Cuba Impact Alabama’s Economy?

Many agribusiness leaders in Alabama hope to increase exports to the Communist Caribbean nation of Cuba during the next few years. They argue increased trade would contribute positively to the state’s economy. Recent actions by the Trump Administration to emphasize the importance of human rights as a keystone for expanded ties with the United States hold the potential to impact agricultural exports to Cuba.

Additionally, the expansion of other economic sectors within Alabama may ultimately dwarf the impact of developing new agribusiness markets. Increasingly, residents of “The Heart of Dixie” owe their prosperity, not to farming, but instead to the growth of manufacturing industries. While agricultural exports do bring revenue into the state, economic planners during recent years have sought to encourage the growth of well-paid technology-based jobs.

Envisioning a Lucrative Trade

The easing of legal restrictions on trade between the USA and Cuba during the Obama Administration generated considerable enthusiasm among agricultural producers in Alabama for the development of a potentially profitable new market for exports. Cuba, a populous nation, currently imports up to 80% of all food sold on the island. Located within close proximity to the United States, Cuba since the opening of trade in 2000 became an important destination market for U.S. frozen chicken. It currently ranks as the fifth largest importer of U.S. frozen chicken in the world, in fact.

Cuba’s National Port Authority signed a Memorandum of Understanding with the Port of Mobile in early 2017. It acknowledged Alabama currently exports poultry and forest products to Cuba. Mobile has already become the fifth most important exporting city in the growing volume of trade between the United States and Cuba, reportedly processing some 47,024 tons of exports to Cuba during 2016 alone. Cuban officials hope the recently established Mariel Economic Special Development Zone in Cuba will eventually become a key trading hub in the Caribbean region. Alabama seems well positioned to benefit from the projected expansion of regional trade.

Human Rights Issues

Nevertheless, while many members of Alabama’s agribusiness community hope for increased exports to Cuba in the near future, policy tensions between the Trump Administration and the Cuban government have generated concern among some business leaders in Alabama that Cuba might purchase chicken from other export sources instead, such as Brazil. President Trump recently urged the Cuban government to free political prisoners and conduct free and fair elections. He also wants Cuba to return fugitives and convicted criminals from the U.S. who have sought to hide in the Communist nation. The Trump Administration recently issued new directives prohibiting payments to companies controlled by the Cuban military and he threatened to re-impose some travel restrictions on U.S. citizens visiting Cuba.

Alabama’s Agricultural Commissioner noted any cessation of exports of agricultural products from the United States to Cuba would result from Cuba’s response to the President’s statement. He expressed the hope the Cuban government would not choose to limit trade with U.S. trading partners. Cuba’s President Raul Castro will retire in 2018, providing a possible opportunity for Cuba to liberalize its oppressive human rights policies in accordance with President’s Trump’s suggestions in the near future.

Alabama’s Agribusiness Economy

Would changes in the extent of agribusiness exports to Cuba impact Alabama’s economy? Possibly. Agriculture has played an historically critical role in the state of slightly over 4,708,708 people. During recent years, agribusiness concerns have often outpaced family-owned and operated small farms in The Heart of Dixie:

  • Currently, total Alabama farmland comprises 9,000,000 acres;
  • The average farm encompasses 186 acres (a figure averaging in both numerous small farms and large agribusiness concerns);
  • Some 376,000 acres of Alabama farmland on 925 farms grow cotton.

Recently, agricultural production patterns in Alabama began changing markedly. Livestock production now greatly exceeds crop harvests as a source of agribusiness revenue in the state, with poultry and quail both figuring prominently in sales figures. Additionally, the majority of farmers grow corn (2,112 farms) and/or soybeans (1,502 farms).

Economic Development in Alabama

Some evidence suggests an expansion of agribusiness exports to Cuba might exert less impact on Alabama’s economy than a rise more broadly based exports. The Bureau of Labor Statistics reports agriculture still plays an important employment role in Alabama. In May, 2016, it ranked Alabama as one of the leading five states in terms of total employment in agriculture. Workers in this sector in Alabama earn an hourly mean wage of $13.14. These jobs, while numerous, remain comparatively low paying relative to agricultural employment in many other states.

During recent years economic planners in Alabama have sought to develop new, well-paid positions in high tech and manufacturing sectors with some success. The state received a 2016 Silver Shovel Award for promoting the growth of the automotive and aerospace manufacturing sectors:

Assessing The Impact of Cuban Exports

Whether current agribusiness exports to Cuba will significantly bolster Alabama’s economy in the future remains unclear at this time. Poultry producers and forest product growers have obtained a developing new market from this trade during the past 16 years, generating millions of dollars in sales. Plus, the increasing exports to Cuba also promoted shipping traffic through the Port of Mobile as a commercial center, contributing indirectly to Alabama’s economy.

Possibly expanding trade with Cuba to encompass other agricultural exports (including cotton, soybeans and corn produced by smaller agricultural concerns) might benefit many additional Alabama farmers. The export to Cuba of automotive and aeronautics products manufactured in the state could also potentially promote further economic expansion within the state.

Why it is important to build a strong credit history in a failing economy

Your credit score is one of the most important numbers in your life. A poor credit history can make life difficult. You might find it harder to buy a car, purchase your dream house or even get a job. In contrast, a better credit score can really make your life easier. If you have a great credit score, you will pay less for a home loan and save yourself thousands of dollars in interest rates. You will also find it easier to get a good credit card that may even offer you all kinds of wonderful rewards even on small purchases.

Building Credit

Credit, like many other things in life, starts out early in life. When you become old enough to buy things, you may start to accumulate a credit history. Once you get your first job, this is when your credit history truly begins. This is when you start thinking about your credit history. You’ll want to have the strongest credit possible. Fortunately, there are many ways to build a credit history. There are also many ways to rebuild your credit history if you have made any mistakes in the past. Many resources today can help you get the credit score you want in life.

Attention to Detail

Creating a credit score begins with the details. If you’ve never had a paycheck before, you need to think about how you are going to spend your money. For most people, this means paying rent or a mortgage. It also means spending money on other basic costs such as health care premiums, food and transportation. The little bills will also matter. You may want to set up funds to pay for things like an entertainment budget and money for a vacation. Start by setting up a spending diary. Note every single item you buy during the course of a week. Include everything from a cup of coffee to any funds you spend on hair care products. This will help you see exactly where your money is going each week.

Paying Your Bills

Companies that decide on your credit score will look at multiple factors when determining your final credit score. This will include not only if you pay your bills but if you pay them on time. Even a single late payment can lower your credit score. If you miss a payment entirely, this can have significant consequences. The same is true for all of your bills. Set up an automatic bill pay so you won’t have this problem.

Creating a Credit Score

Many people find they don’t even have a credit score. This can be because they don’t have much of a work history. In that case, you can create a work history in a short time frame. Even if you don’t have a credit history, you can often get a credit card. Buy small items on the card and pay them off immediately. Over a few months, you’ll start to build a credit history. Keep in mind that getting a credit card during a falling economy can be harder. In that case, consider taking out a debit card. The debit card will link directly to your account. Using a debit card also helps demonstrate that you can pay your bills and are worthy of credit.

Avoiding Debt

Another factor that may impede your ability to build up a good credit score is if you have lots of debt. Many lenders do not want you to have more than a certain percentage of debt in comparison to your income. In general, if you are applying for a mortgage, you should not have more than forty percent of your income in debt. If you start to pay down any existing debts, you can expect to see your credit score rise.

The Advantages of a Good Credit History

A good credit history can be particularly important when the economy is not doing well. During this time, many lenders may be reluctant to lend people money. As a result, it can be harder to borrow money for a mortgage. If you can demonstrate that you are a more reliable credit risk, you chances of getting credit are vastly increased. You are more likely to get the credit you want at a lower rate even when others with lower credit scores cannot do the same. You may also be more likely to be chosen for a promotion by your employer. They know that having a good credit card score can demonstrate that you are capable of handing your fiances in a responsible manner.

Finding Credit Resources

Even if you have less than ideal credit, there are places you can turn to get help and make it better. One of the most important things you should remember is that you have the right to check your credit. Companies that report your credit are required to give a free report once a year. If you see any mistakes on your report, you are entitled to have them removed legally. You may need to provide documentation but they must agree to remove any mistakes that might have lowered your score for any reason. They must do respond to you within thirty days.

Repairing Your Credit

If you have poor credit, you can often companies that will work with you to help you get your bills under control. Your employer may offer you free credit counseling. Other organizations may also offer low cost services including your local library, a nearby military base and your local area college. They will help you figure out ways to get out of debt and start saving again. They can also help you negotiate a lower rate of interest on any of your credit cards. This can help you save money and help you start saving again. Use their help, follow their advice and you’ll soon be on the road again to good credit. This will help you save money in the long run and get your entire life in better fiscal shape.

Alabama’s refusal to support renewable energy is damaging their jobs market, leading to a declining economy.

Renewable energy is the future, and not only is it good for the planet, but it also benefits the economy. Since renewable energy is much less expensive than other forms of energy, it puts more money in consumers’ pockets. They can then spend more, benefiting their local businesses. The renewable energy industry is a huge source of jobs, and there are also plenty of tax breaks involved.

All the economic benefits are one reason why Alabama’s stone age energy policy is so jarring. Due to politics, the state has made it very difficult for solar and wind companies to operate. How has Alabama impeded renewable energy and why? Read on to find out.

The Issues with Renewable Energy in Alabama

The first thing to understand about Alabama’s renewable energy issues is that they’re entirely self-inflicted. The state has an excellent environment to harness solar and wind power. The Center for Biological Diversity found that in terms of technical potential for solar rooftop power, Alabama was number 19 among the 50 states. It has almost 200 sunny days each and every year. With its climate, it also gets plenty of wind.

Despite those natural advantages, Alabama is number 45 among the states in the Center for Biological Diversity’s rankings of installed solar capacity. For that reason and others, the center gave Alabama an “F” grade in regards to its solar policies.

There are two regions in the state and two very different utility providers handle those regions. Tennessee Valley Authority handles power in the northern third of Alabama. The company is forward thinking and has put quite a bit of money into renewable energy sources. It also provides incentives for customers who install solar panels on the rooftops of their homes or businesses.

The problem is that Alabama Power providers power to the southern two-thirds of the state, which covers its largest cities, including Birmingham and Montgomery. Alabama Power doesn’t have much in the way of solar incentives and it charges a higher amount for solar power, which means customers won’t save as much by switching. It also doesn’t pay much to customers who sell the extra solar power their panels generate back to the grid, only offering about three to four cents per kilowatt-hour. To put that into perspective, Tennessee Valley Authority pays 12 cents per kilowatt-hour.

So, most customers in the state have little reason to make the switch to solar panels because it won’t save them much money.

The situation hasn’t been any better for wind companies. Many have tried to launch wind projects in areas of Alabama, only for the county to then pass a law banning wind projects within its borders. There have also been lawsuits against companies that started planning wind projects in areas of the state.

A Hostile Political Climate

Of course, Alabama is one of many states that leans heavily to the right, and conservatives have traditionally been negative regarding renewable energy while those on the left have been more supportive of it.

Gadsden is one example of a city where politics prevented potentially helpful renewable energy projects. It was among the poorest cities in the nation in 2013 when there was the chance for new wind projects in the area. Local legislators did everything in their power to prevent these projects, with one major reason being that they were upset about the federal tax credits available for such projects.

The result was that the projects couldn’t go through due to the laws that were passed, and Gadsden lost out on a huge economic opportunity.

The Effect Alabama’s Policies Have on Its Economy

Alabama’s poor approach towards renewable energy is costing the state and its citizens money. In the aforementioned situation in Gadsden, those wind projects would have created jobs and brought in a significant amount in tax revenues, likely millions of dollars. That’s all without costing the taxpayers anything. Instead, the area stuck with its power plant, which has been funded by the taxpayers for years.

The greatest economic impact of the solar and wind industries is the number of people they employ, and part of that is the difference between how these industries and fossil fuel industries work. The fossil fuel industries use more heavy machinery. They require money and machines but not nearly as much labor so there aren’t as many jobs available.

Renewable energy requires more labor. The industries require people to manufacture solar panels and wind turbines, set up the projects, consult with customers and then handle installation.

With solar energy, net metering can earn money for those who have solar panels installed, both people and businesses, when their solar panels produce more power than they use. The economic benefits of businesses having more money are obvious. They’ll be able to put that money towards expansion and employ more people. And of course, when people have more money, it’s good for the local businesses where they shop.

To put it simply, renewable energy companies lead to more jobs and more money for everyone in the area. The states that take steps to improve their use of renewable energy see economic benefits for it. The states that obstruct renewable energy companies are damaging their own economies.

The Future of Renewable Energy in Alabama

Although Alabama has been wasting its potential as far as renewable energy is concerned for years, change could be in the air. Alabama Power has been taking steps towards more solar power.

The reality is that renewable energy isn’t going away. Solar and wind are two industries that the nation is gravitating towards, regardless of what is going on in Washington, D.C. Alabama has certainly been lagging behind, but with the obvious economic benefits and how much potential the state has for solar and wind power, at some point its citizens will demand a shift towards renewable energy.

Alabama’s Unemployment Rates Higher Than Neighboring States

Alabama, officially the Yellowhammer State but nicknamed the New Detroit, is undergoing a manufacturing renaissance. After the textile industry died, the auto manufacturing and its related auto parts suppliers’ plants were welcomed to both Alabama and neighboring Georgia and Tennessee. Despite the new manufacturing jobs, Alabama is perpetually struggling economically.

Alabama’s top employment sectors include:

  • Manufacturing
  • Health Care
  • Retail
  • Food Services
  • Education

Alabama also shares a border with Mississippi and Florida. Alabama shares more than a border with Georgia and Mississippi, all three have higher than average unemployment rates.

Unemployment Rates

While Alabama’s unemployment rate remains higher than the national average, it dropped to 4.9 percent in May 2017, which is the lowest unemployment rate the state has seen since March 2008. May’s unemployment rate ranked Alabama at number 40 in the nation in a tie with neighbors Georgia and Mississippi. Additional jobs in the hospitality, construction and manufacturing sectors contributed to the decrease.

Alabama’s Pro-Business Environment

Despite Alabama’s pro-business environment, tax and non-tax incentive packages, tax incentives and financing programs, the state lags behind its neighbors in economic development. The Economic Development Partnership of Alabama has high profile wins, yet for the billions that Alabama spent wooing automobile manufactures and other employers, the state’s unemployment rate remains higher than its neighbors do.

Alabama gave Mercedes incentives worth $258 million to $439 million twenty years ago to build a manufacturing facility in the state, neighboring Tennessee paid far less to secure a Nissan plant in 1980.

New manufacturing facilities are not always a community’s savior that politicians claim will result in significantly lower unemployment rates. In Alabama, residents with college degrees or training in trades are at a premium, therefore, new employers attracted by the incentives are looking beyond the unemployed and consider currently underemployed workers as potential employees.

Workforce Training

Every year the Center for Business and Economic Research at the University of Alabama surveys Alabama business leaders to gauge their business confidence. In 2017, the top issue facing the Yellowhammer state is education and workforce training. A better-educated workforce will eventually induce economic growth, however Alabama, along with Mississippi, has fewer jobs available for college graduates than other southern states.

Alabama’s jobs of tomorrow will require a college degree or industrial training, which is true for the nation, not only in Alabama. A damning analysis by the Business Education Alliance and the Public Affairs Research Council of Alabama says that Alabama’s workforce does not have the post secondary education to curb the higher than average unemployment rate that plagues the state.

Preparing residents for increased employment opportunities will require advising high school students to consider training in skilled trades and cooperation between the business community and education systems to determine which skill sets are in-demand. Secretary of the Alabama Department of Commerce Greg Canfield says, “This initiative, which links Alabama’s business sector and education systems in a partnership, will help to create opportunities for residents and develop the pipeline of workers the state needs to fully realize its economic potential.”

Why Alabama’s Unemployment Rates Higher Than Neighboring States?

Alabama has perpetually higher unemployment rates than her neighbors; lower tax revenues. The state’s tax revenues fund universities, new highways and other infrastructure, however, Alabama residents have few assets to tax, and those that are taxed, are taxed at a low rate. Tax incentives to businesses to relocate to the state lower Alabama’s revenues even more. Alabama’s neighbors bring in more state and local tax revenues; therefore, they can invest in infrastructure and education, which major employers look for when relocating. Alabama is the fourth poorest state in the nation, and neighboring Mississippi is the poorest.