According to Bureau of Labor Statistics (BLS) provisional estimates, in July 2003 the seasonally adjusted civilian labor force in Alabama numbered 2,153,300, with approximately 121,800 workers unemployed, yielding an unemployment rate of 5.7%, compared to the national average of 6.2% for the same period. Since the beginning of the BLS data series in 1978, the highest unemployment rate recorded was 15.6% in December 1982. The historical low was 4.1% in August 1998. In 2001, an estimated 5.2% of the labor force was employed in construction; 17.8% in manufacturing; 5.5% in transportation, communications, and public utilities; 20.1% in trade; 5.8% in finance, insurance, and real estate; 22.5% in services; 14.8% in government; and 2.0% in agriculture.
In 1871, James Thomas Rapier, a black Alabamian who would later serve a term as a US representative from the state, organized the first black labor union in the South, the short-lived Labor Union of Alabama. The Knights of Labor began organizing in the state in 1882. A serious obstacle to unionization and collective bargaining was the convict leasing system, which was not ended officially until 1923, and in practice, not until five years later. In 1888, the Tennessee Coal, Iron, and Railroad Co. (later taken over by US Steel) was granted an exclusive 10-year contract to use the labor of all state convicts, paying the state $9–18 per person per month.
Child labor was also exploited. Alabama had limited a child's working day to eight hours in 1887, but a Massachusetts company that was building a large mill in the state secured the repeal of that law in 1895. A weaker measure passed 12 years later limited the child's workweek to 60 hours and set the minimum working age at 12.
The US Department of Labor reported that in 2002, 157,000 of Alabama's 1,761,000 employed wage and salary workers were members of unions. This represented 8.9% of those so employed, down from 9.4% in 2001. The national average is 13.2%. In all, 185,000 workers (10.5%) were represented by unions. In addition to union members, this category includes workers who report no union affiliation but whose jobs are covered by a union contract. Alabama is one of 22 states with a right-to-work law. Unions were especially strong in the northern industrial cities and in Mobile.