Bacon's Rebellion

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Hampton Roads the Dragging Anchor on Virginia Job Growth

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by

James A. Bacon
in ,

We’ve talked a lot on this blog about Virginia’s ailing mill-town economy. But the real economic laggard is Hampton Roads. Based on July 2017 Bureau of Labor Statistics data, all but one of Virginia’s metropolitan regions achieved job growth compared to 12 months previously. Hampton Roads lost 0.4% of its jobs.

Harrisonburg showed the strongest job growth, followed by Washington (which includes Northern Virginia), Richmond, Charlottesville, and Blacksburg, at 2.6% job growth. University towns, it seems, are doing just fine, as are Northern Virginia and Richmond. The smaller metros without a major university are growing but at slower rate.

Then there’s Hampton Roads. Here’s the BLS chart showing how the region’s job creation, never strong since the end of the recession, has dipped below zero several months in the past year. Job losses are concentrated in the following occupational categories: trade, transportation and utilities; information; financial activities; and leisure and hospitality.

(I couldn’t find the numbers for non-metropolitan Virginia. If someone can point me to them, I will add that data.)

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28 responses to “Hampton Roads the Dragging Anchor on Virginia Job Growth”

  1. LarrytheG Avatar
    LarrytheG

    re: ” University towns, it seems, are doing just fine..”

    so there you go… high tuitions = great economic stimulus and low unemployment !!! What more could you want!

    so quit yer bellyaching!!!

    there’s a certain ironic symmetry… folks who get subsidized health care via employer-provided and Medicare… get to “pay some of it back” via high tuition for their kids and grandkids… perfect!

  2. V N Avatar
    V N

    LarrytheG, Hampton Roads is a military town. I’m not sure where we are id’d by ODU or NSU (or even HU). The military presence here is huge.

    1. LarrytheG Avatar
      LarrytheG

      V N …was commenting on the “College Towns”…. not Hampton..

  3. TomH Avatar
    TomH

    That is why I am so concerned about the direction Hampton Roads is taking with their economic development efforts. They are promoting 20th century industries reliant on fossil fuel.

    A study looking at the total cost of delivered gas, taking into account possible cost advantages of different production zones plus the cost of pipeline transportation, shows that Dominion customers in Virginia will pay $1.6 to $2.3 billion more to use the Atlantic Coast Pipeline over the next 20 years compared to using existing pipelines. Virginia Natural Gas will take about half of Dominion’s amount, and would require connections to existing pipelines over existing rights-of-way to get the gas they desire. But they would still save about $1 billion compared to using the ACP over 20 years.

    Chasing industries that are reliant on an increasing cost source of fuel and using a far more expensive transportation method is not a recipe for success.

    I have recommended several times that Hampton Roads orient their economy to a 21st century energy system that would lower the cost of occupancy for federal installations and private businesses. This would create thousands of long-term jobs in the construction trades for energy efficiency projects and attract innovative new businesses, while maintaining the federal presence that creates so many secondary jobs in the area.

    Others have already shown how this can be done. It does not require great subsidies, as do 20th century approaches. And it can be ramped up quickly with a clear intent and coordinated effort.

    If we continue to use the same old solutions we will continue to experience the same old problems. It will take a different mindset to create a different future. Southeast Virginia is filled with opportunities, but they need to be realized using new methods.

  4. LarrytheG Avatar
    LarrytheG

    Hampton Roads is about to experience huge,, cataclysmic changes in the military that is ongoing and accelerating and that is the evolution away from systems that require gobs of minimal skilled operational personnel to systems run by robots and autonomous systems.

    Take something like a submarine which requires significant costly systems to provide life-support to equally costly personnel to man the sub which is 3-4 times bigger and complex than it would be if it were autonomous.

    As we speak – the Navy as well as the other armed services are moving to autonomous vehicles… subs.. surface / littoral ships and air… to save personnel costs and to stay ahead of other countries technological advances.

    This change presents risk and opportunities for Hampton… including it’s educational institutions… to supply highly-educated people to build – and man these 21st century systems and weaponry.

    Hampton is now also starting to see Panamax scale ships and will soon, within a decade or less – see autonomous super ships… with tiny skeleton crews..

    By all means – Hampton education institutions should be gearing up for the 21st century maritime… world… could be a world leader… with a little help from the State economic development folks.

    Let’s see if Mr. Gillespie or Northam have that kind of vision …. for the Virginia Economy…

  5. Peter Galuszka Avatar
    Peter Galuszka

    How much of Hampton Roads’ problem dates back to sequestration? If Trump builds up the military as he claims, will that turn things around? But is that just old fashioned FDR-style pump priming? What? Too Keynesian? Not in keeping with strict libertarian theory? Hmmmmm.

    1. James A. Bacon Avatar
      James A. Bacon

      Strategically, Hampton Roads is in a box. I can’t think of any obvious way out. The country can’t afford endless military pump priming. The region has to diversify. But that’s easier said than done.

      1. LocalGovGuy Avatar
        LocalGovGuy

        100% agree. Whatever Trump does in terms of increasing military spending, I think you and Larry are correct…the military’s transforming in a way that is probably not going to benefit Hampton Roads in any measurable way.

        One key question revolves around land use: Virginia Beach still abides by the green line. Is that a proper strategy to employ in this changing economy. Should the largest city in Virginia continue this land use policy?

    2. djrippert Avatar
      djrippert

      If sequestration is the problem why isn’t it dragging down Washington too?

      1. TooManyTaxes Avatar
        TooManyTaxes

        Some Fairfax County officials are still claiming County revenues are still being hurt by Sequestration. Not sure what’s accurate.

      2. Steve Haner Avatar
        Steve Haner

        It is dragging down Northern VA, too, but I suspect Hampton Roads is far more dependent on DoD direct and indirect spending than Fairfax. Not everything in the federal budget is subject to sequestration.

      3. UpAgnstTheWall Avatar
        UpAgnstTheWall

        Looking at the BLS source Jim used, Hampton Roads has as far back as 1991 (earliest date available) generally posted poorer numbers than the DC metro on the metric of job growth.

        Sequestration was obviously a boot to the junk for DC when it happened, but as to whether it’s still dragging the region down – just looking at the BLS numbers it’s hard to say, but outside of the (admittedly small sample size overall) years when a recession was coming and going the growth numbers look higher than what’s currently being posted.

        And, of course, as others have said Hampton Roads != DC – there’s a lot of necessary government work (and supplemental tourist servicing) that goes on in the broader district that happens regardless of funding levels and military engagement that isn’t true for Hampton Roads.

  6. TBill Avatar
    TBill

    The nat gas pipelines to the region, if ever completed should supply cheap energy to the region which could allow growth of energy-dependent industries. Since we see from Houston the USA potentially has too little geographic diversification of industry, there is possibly an opportunity for Virginia. Yes, I hear TomH saying we should, in our planning, assume fossil fuels are dead. But just before Harvey the USA hit record gasoline consumption – contradicting the popular notion of a dying fossil fuel industry. With so many blue states in the Northeast agreeing with Tom, Virginia would seem to have an opportunity – medium term anyways. Nothing fast around here. Meanwhile medicine and universities are the default industries today for many regions.

  7. Steve Haner Avatar
    Steve Haner

    Sequestration is part of the problem. A related problem is the inability of the Congress to pass the defense appropriations act in a timely manner – another continuing resolution this year will be another blast of wind in the wrong direction. A CR won’t allow contracts for new projects, even when they are ready to roll. Also on the defense front is the continued pivot to the Pacific, which is necessary.

    The building tech revolution in military affairs, such as ship operation and shipbuilding and repair, is really an opportunity for Hampton Roads. We won’t have fewer manned submarines – building of those will accelerate for a while – but those submarines will be working with aerial and submerged drones as a new major sensor and weapons component. Those devices will have to be designed and built somewhere, and there will be lots of them. What is Virginia doing to ensure that is a Virginia industry?

    For years, if not decades, the mantra has been that Virginia needs to diversify and not be so reliant on defense spending. I can’t argue with that, but at the same time we still need to maximize that sector.

  8. V N Avatar
    V N

    LocalGovGuy YES! It should. Just a month or so ago, the Princess Anne district/Pungo, that you are referring to, had a over 100 person attendance because of the flooding and other problems in those areas. They are so bad that they’ve had to spend millions because of the flooding and the like there that the developers said ‘oh no, this will fix it’ and when they turned it all over to the city: BAM. I went to that meeting and it was incredible the amount of work, people dedicated, and dollars, spent just to try and keep up and/or not flood there.

    Look at what happened to Houston. Its happening to VB. So bad VB got its own people and now it has to pass their muster not the developers’ people.

  9. Acbar Avatar
    Acbar

    Well, VN, let’s hope we don’t get Irma’d next week and have to find out all too soon whether the surface drainage is any better in Virginia Beach and Chesapeake than in east Texas.

  10. Acbar Avatar
    Acbar

    Tom H is “concerned about the direction Hampton Roads is taking with their economic development efforts. They are promoting 20th century industries reliant on fossil fuel.” Well, I agree that renewable fuels might work out better in the long run; but the key thought there is not what kind of fuel, but, the fact that they are promoting fuel-consuming “industry” at all, and not the white collar jobs that come to a region with a highly educated workforce. Ever since WWII, Hampton Roads has had a sort of blue-collar reputation about it, and the flat/declining employment statistics are consistent with industrial areas across the country, not just those dominate by defense spending. Why did all those data centers blossom in Loudoun County, not in Virginia Beach? Admittedly there is a massive new Dutch data link coming Virginia Beach — http://www.datacenterknowledge.com/archives/2017/03/17/future-data-center-park-in-virginia-beach-to-link-to-new-transatlantic-cable — but why is Hampton Roads so late to the IT party? I feel it must be something employers see — or don’t see — in the Hampton Roads area that has them looking elsewhere.

  11. Steve Haner Avatar
    Steve Haner

    http://www.stateoftheregionreport.com/wp-content/uploads/2016/06/SOR2016.pdf

    Life in the slow lane is the headline. I think Bacon has linked to these reports before. Koch identifies DoD, the port and tourism as the three pillars of the local economy and his 2016 report showed that DoD spending was flat pretty much for 13, 14, 15, 16…..

  12. V N Avatar
    V N

    I can answer that – HR is so behind because we have elected reps in the pocket of a few businesses/rich, rather than leaders to get us ahead. All they think is develop, develop, develop, like that gets you anywhere.

  13. V N Avatar
    V N

    Or the “leadership” just as bad.

  14. jalbertbowden Avatar
    jalbertbowden

    Okay team, this is a long one so brace yourselves. HRVA native here, will hopefully die there. I have a lot of thoughts. As well as some insanity and run on sentences.

    V N nailed it on its head! Yes, HRVA has massive issues/problems, most of which have already been mentioned here, but they are all exponentially compounded because of two things. HRVA local governments are extremely corrupt and the balkanization of all of them has them fighting for themselves, never working together, and never thinking ahead.
    Or better said, as V N did, literally ZERO LEADERSHIP.

    Someone mentioned the Pungo local government meeting a few comments up; VB is drowning -> what are VB’s priorities? Ocean front arena for a team that doesn’t exist.
    HPT – is giving away Fort Monroe, while not being able to keep NASA employees living within its borders. Seriously, why JLAB and NASA have not formed a mega-circle of nerdery on the Peninsula is a travesty in itself. The fact that NN/HPT can’t figure out how to do anything with it, speaks volumes.
    NN – is selling the city farm to developers. Also, look at what they did with the “Technology Corridor” that was supposed to complement JLAB…its literally a grocery store and strip mall. Not to mention what/how they got the land from NN Public Schools.
    PTOWN – Portsmouth is so screwed. It truly makes me sad for its citizens. Lets not get into its problems, except look at how the city council/police/sheriff have acted over the past few years. My high school student council performed better.
    ORF – the treasurer recently was found guilty of corruption. it applies to all of them, regardless of conviction. Name a name, I’ll tell you something about them. Norfolk is corrupt as the day is long.
    I could write a goddamn novel here in the ways each locality is crooked; there is a reason why the FBI has a hotline for corruption set up by a special team in Hampton Roads. I know about stupid, petty shit that affects Poquoson and York County too. Ridiculous, childish antics that affect innocent citizens caught in the cross fire of douchebag politicians.

    Lesser problems: traffic. In the 757, we tell people to “live on the side you work on” for obvious reasons, but this now includes the elizabeth river. VDOT has set up a ring of tolls around Hampton Roads and you’re going to have to pay to live…not to play, to live. Spare me the “we need tolls for infrastructure”; while true, that is most certainly not what is @ play in HRVA. VB native, our felonious governor, saw to that when he put up Portsmouth for sale.

    The Port is a major problem. They’ve done nothing to prepare for the massive ships that are now coming in, besides piss and moan to state legislature that they need more infrastructure. The 460 debacle was mostly their fault, sprinkle in some of Gov. McFelon’s actions, and voila, the state is out a quarter of a billion with nothing to show for it. The Port continues to push economic numbers to throw their weight around but they are unwilling to pay cent one for anything. Their latest effort is to combine RVA and HRVA into a mega region to compete for federal funds. They are pathetic.

    I’m not sure about the pipeline $ other comments mentioned, but that gas is going abroad, so I’m not sure how it is going to benefit us at all.

    VB does have the new www cable coming in, and hopefully it sparks something, but HRVA’s tech scene has been lacking for quite awhile. It has picked up in the past few years, and actually thinks look quite different, which is good.
    Dominion Enterprises gobbles up much of the talent, but at some point the good talent leaves. Most of my coworkers/friends left state while I was there.
    You have the hospitals and DOD but they all require a certain type of developer, not just security clearance, but typically Java and/or .NET. Basically, technologies that aren’t exactly known for start-up success. I want to be clear that I’m not being critical of each or developers of them, this is just a reality.
    I’m not sure why their aren’t data centers there yet; most likely the NOVA localities realized the opportunity and cut them breaks and VB/Chesapeake were to busy cutting developers breaks for dumb things we don’t need/not surveying the landscape. Vague, but willing to bet money that is mostly correct.

    TowneBank is a little more than a slight problem. The local bank that is behind every new development and not coincidentally involved in quite a few fraud/procurement schemes needs to be audited at the very least.

    To the comment about college towns and supporting old people….CNU is literally becoming the lifeblood of Bad News. W&M is a corner stone of Williamsburg/JCC, ODU/NSU pump life into Norfolk, and HU provides a lot of private school money to Hampton. That plus HRVA’s main employer is DOD, I’m confused at your point.

    To sum it up, HRVA is effed. All the local officials only care about themselves/their localities, DOD owns us, and the Port preys on us.
    Sure, that’s hyperbole, but I challenge anyone to prove any of this wrong. I love Hampton Roads, and I wish the best for it, but it’s about as dysfunctional as they come.

    What kind of data are you seeking Jim? Employment data from non-metro areas? RVA Federal Reserve has some data, as well as VMLS, if I’m remembering that second acronym correctly. Happy to help, if you don’t mind clarifying.

    Again, apologies for the rant. But I love Hampton Roads, and want it to be the best it can be. Its family to me.

    1. Steve Haner Avatar
      Steve Haner

      Yes. Not a HR native or resident, but I have worked with multiple clients there and have long observed a lack of effective regional cooperation. And all the water, while a natural asset for many and the reason the Navy is there, is a barrier to transportation. No the traffic is not the same as Northern VA, but in Northern VA there are alternate routes if you know them and public transit in many corridors. In HR, once you are stuck in line for the tunnel, you have no choices. I do hope a decade from now the investments now being made will help – although of course the sign of success will be more congestion!

    2. James A. Bacon Avatar
      James A. Bacon

      Yes, that was quite a rant. In addition to dysfunctional local government, I’d add geography. The water, a boon to ports, is a curse to transportation, requiring massively expensive bridges and tunnels. No one is to blame for that — it’s just the way it is. Also, the elevation is extremely low, and subject to flooding. One can dispute the more alarmist projections from the global warming crowd about sea level rise, but nobody disputes the impact of subsidence. Meanwhile, the slurping up of aquifers accelerates subsidence and also makes fresh water hard to come by. Hampton Roads has a bad hand to play — and, according to your analysis, is playing it badly.

      As for the data I’m looking for, I think BLS also tracks “non-metropolitan” employment trends, but I couldn’t find that yesterday in the time I had allotted to write the post. If you happen to know where to get that data, I will add it to the post. It’s possible that non-metropolitan Virginia is also a drag on the state economy.

  15. LarrytheG Avatar
    LarrytheG

    well.. that was quite a rant… but a good rant and appreciated and cannot resist adding my 2 cents.

    I think every region has some of these problems because jurisdictions in Virginia typically compete against each other – rather than forming a competitive region.

    This is no more apparent than what happened with the transportation grid in the Hampton Region – where adjacent jurisdictions could not agree as a region – for decades – and VDOT finally had to step in and decide.

    And yes.. you have to toll – not only to pay for the infrastructure which Hampton and others mindlessly insisted that RoVA would pay for but to actually let people own their own costs of deciding where to live and where to work because advising them does not work – people totally ignore it until it bites them personally on their own personal butts and it takes tolls to bring that reality…

    Otherwise most would not give a rats behind… and would continue to commute solo daily causing gridlock chaos.. no matter how many bridges and tunnels were built.. the more of them built – the more regional solo commuters.. Can’t blame that on elected!

    No points to the region on the transportation nor the land-use issue which each jurisdiction uses as it’s piggy-bank for paying for services and schools…

    It’s another mindless exercise when each new home generates another mega-solo-commute.. that the jurisdiction takes no responsibility for as a jurisdiction and also fails to deal with as a member of the regions MPO.

    Don’t feel singled out – NoVa and it’s exurban commuting counties (of which I live) are little better and VDOT was also forced to institute tolling on I-95 and I-495 .. because – like Hampton – everybody and their dog wants to work in one place and live 40-50 miles away in another – and drive a solo car everyday to connect the two. The jurisdictions want the tax revenue then blame VDOT for not “fixing” the transportation “mess”. It does _not_ “work”.

    we say it’s elected officials … but it’s also those who want to commute solo daily who really don’t give a rats behind. it’s not their problem.. it’s the elected officials problem. and the elected officials punt that to VDOT…

    1. TooManyTaxes Avatar
      TooManyTaxes

      Years ago (make that many years ago) when I was a college student in Minnesota, I worked for a professor to write a short book on fiscal issues affecting the Twin Cities Metro Region. One of the topics we discussed was a state law that required the sharing of a portion of the real estate tax valuation from new commercial and industrial property was partially shared among all localities in the Metro Region. I assume the law is still on the books and works satisfactorily. The intent, of course, was to help foster cooperation among local governments.

      Assuming this would be constitutional in Virginia, would something along these lines help Hampton Roads?

      1. LarrytheG Avatar
        LarrytheG

        There are laws already on the books. For instance Charlottesville and Albemarle county share revenues for some land in their jurisdictions. That happened at about the time that Va put a moratorium on annexation.

        Williamsburg and James City County run a consolidated school system.

        Other states where cities and towns are part of the county… have an easier time sharing interests…

        generally speaking though, Virginia jurisdictions – with the exception of Henrico and Arlington don’t take ownership of transportation of which most of it is related to land-use decisions made by the jurisdiction that affect their own jurisdiction as well as the region – and they just plain suck at taking proper responsibility for coordinating land-use and transportation.

        It’s not much better when it comes to impervious surfaces and storm water runoff… or combined sewer overflows.. or flood plain … All of these things have to be done top-down from the Feds because the localities would evade and avoid doing the right thing especially if local tax dollars are involved.

        For all the bellyaching about the Feds and State – the awful truth is that without Fed and state regs… many localities would not do what is necessary. They’d dump raw sewage in the rivers if there were not draconian Federal /State penalties… even wealthy jurisdictions will not fix their CSO problems – even as they continue to approve more development …

        And we’re just one thread up from the ones that won’t even keep their own financial houses in order.. and hide it from their citizens … if they can…

        You’d think the adage about “govt that is closest to the people” would apply but the sad truth is most citizens are clueless about things like transportation and sewage/storm water other than at the simplest sound-bite levels.

        over and over.. folks are irate over tolling… and almost none understands that it’s primarily a congestion management tool .. to try to maximize the existing capacity of the roads by encouraging something more than SOLO commuting to/from work.. instead, many see it as a “give-away” to profit-making companies… HOLY COW UDDERS – these are the very same folks who say the govt is corrupt and wasteful and the private sector free market is “better”!

  16. LarrytheG Avatar
    LarrytheG

    on the land development issue – especially at the point in time – we do, like Houston did, have flood map data – for 100 year and 500 year floods and we should be using it for future land development.. and that means not approving development on land that we know is susceptible to flooding.. It’s not only a disservice to the folks that buy the homes.. it’s committing taxpayer money to infrastructure – like roads to serve those areas – and it is my hope that VDOT’s Smart Scale approval process will take the required hard look at ANY proposed road that would be flooded in a 100-500 year flood and that would include acceptance of subdivision streets if they are built in 100-500 year flood zones.

    This is an even bigger challenge to the Hampton Roads region in terms of prioritizing their transportation funding resources…

    At some point – no matter the politics of Climate Change, VDOT needs to take charge and deal with these realities if the localities and the region will not.

    It’s truly ironic that people are down on the “Clown Show” in Richmond and in virtual rebellion against the Feds on Climate Change but in the end – depending on the locality and region to make smart, cost-effective decisions on infrastructure is a no go… If VDOT had not made the decision on bridges and tunnels in the Hampton Region – we’d still be arguing about it… and that’s even before we get to deciding what to do about 100-500 year flood areas..

    I watch my own BOS and MPO for the region and I’m more convinced than ever if it were not for VDOT and Federal rules for transportation planning – we’d be smack in the middle of a Boss Hog World.

  17. Peter Galuszka Avatar
    Peter Galuszka

    For years there have been proposals that all of the Hampton Roads cities become New York style “boroughs” that are part of a very large city. But it didn’t happen and never will due to economic and racial imbalance and petty jealousy.

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