Image source: Richmond Times-Dispatch
The Richmond Times-Dispatch ran a striking chart in its Sunday edition contrasting the growth rate for different metropolitan statistical regions in Virginia. The main thrust of the article was to show that the Richmond region, after years of sub-par job creation, is growing smartly these days, creating almost as many jobs over the past 12 months as Northern Virginia. Indeed, if you adjust for the fact that Northern Virginia has roughly twice the population, Richmond’s performance is all the more remarkable.
(If you infer that Richmond has an inferiority complex regarding Northern Virginia, you’re right. As a Richmonder, I confess that it feels really good to sport a stronger economy, even if only for a brief moment in time.)
While the Times-Dispatch did not dwell on the point, the chart reinforces a post I made a couple of months ago pointing out that Hampton Roads is the main drag on Virginia’s economy this year.
As is my wont, I began playing with the numbers. I wondered how non-metropolitan Virginia was faring. By non-metropolitan Virginia, I’m referring to the mill towns and truly rural counties where the economy is thought of as moribund. Non-metro Virginia appears in the gray hatched area below — mostly Southside Virginia, the far Southwest, the western mountains, and the Chesapeake Bay.
I started with the fact that, according to the data in the chart, Virginia created a net 34,000 jobs between September 2016 and Sept. 2017. I netted out the job gains and losses for the metropolitan areas shown in the chart and got a gain of 14,800 jobs that could be attributed to non-metro Virginia. That number suggests, in defiance of all anecdotal evidence to the contrary, that Virginia’s small towns and rural areas are experiencing the biggest job-creation boom of all.
Either the anecdotal evidence is deceiving or the data is wrong. I think the data is wrong, or perhaps missing vital context. The Times-Dispatch attributed the information to the Virginia Chamber Foundation, and I have no doubt that the reporter transcribed the information accurately. Unfortunately, in the time available to me, I could not track down the original source on the Chamber website, so I hit a dead end.
I went to the federal Bureau of Labor Statistics, the most authoritative labor market source I could find. These numbers reflect 12-month job growth from August 2016 to August 2017 — one month earlier than the Chamber data.
These data confirm that Hampton Roads is a drag on the economy. But the region’s economy is in slow-growth mode, not shrinkage mode, which is some consolation. It also confirms that, for a brief shining moment, Richmond is leading the pace in Virginia job creation. Hoo ah! Unfortunately, the Washington data from this source is for the metropolitan area as a whole, not just Northern Virginia, so the job-creation rate should be regarded as only a rough proxy.
Regarding the Washington/Northern Virginia economy, it is natural to assume that tight federal spending is to blame. And perhaps it is. But there’s more to the story. Northern Virginia has an extremely low unemployment rate. In fact, in certain sectors, there is a labor shortage. Consider this Virginia Employment Commission data on where the job openings are (based on online advertising):
Fairfax County — 40,605
Richmond — 11,850
Arlington — 9,899
Loudoun — 8,898
Norfolk — 5,595
Virginia Beach — 5,439
Alexandria — 5,187
Henrico — 4,441
Prince William — 4,014
Albemarle — 3,410
Obviously, there’s a strong correlation between total jobs advertised and the population of the locality. But the numbers indicate that Northern Virginia has nearly 70,000 job openings right now. A worker shortage could be the main constraint on growth, not a weak economy. The data also show that the City of Richmond is cooking with gas — the city and the larger region lost a decade reinventing itself, but the efforts finally seem to be paying off. Finally, for all of Hampton Roads’ job woes, Norfolk and Virginia Beach are still hiring.