Bacon's Rebellion

Democracy Thrives in Sunlight

Virginia’s High-Employment Economy

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by

James A. Bacon
in

Something remarkable happened while we weren’t paying attention — the unemployment rate in Virginia’s smaller metropolitan areas has dropped dramatically. Indeed, the unemployment rate in five of the state’s smaller metros — Charlottesville, Staunton, Winchester, Harrisonburg and Roanoke — is lower than that of all three of Virginia’s large, Golden Crescent metros. Every Virginia metro is below the 4.0% threshold normally considered to be full employment, and below the 3.9% unemployment rate for the United States as a whole.

There is still an urban-rural divide. Unemployment remains high in non-metropolitan localities, especially in Southside and the far Southwest. But it’s encouraging to see that the smaller metros appear to be thriving. For many years since the 2008 recession, the smaller metros had lagged the larger metros in critical indicators of prosperity. Now, according to the August 2018 labor-market data, Virginia’s smaller metros are experiencing labor shortages.

The following chart compares the number of unemployed in Virginia’s metro areas with the number of advertised job openings. The labor shortage is the most acute in Northern Virginia where there is only one unemployed worker for every four open positions. (Technical note: My data source is the Bureau of Labor Statistics. There may be issues comparing data sets for the Virginia portions of the Washington and Winchester MSAs.) But even in Danville, long the poster child of a depressed Virginia mill town, there are more job openings than unemployed workers.

One critical issue now is the job-skill mismatch. In an ideal world, unemployed workers would fill the open jobs. In all likelihood, only a few possess the skills that would allow them to do so. But that’s a good problem to have. Virginia has plenty of community colleges and career schools that help with the transition.

Another issue is labor force participation. While unemployment may be low in Virginia’s smaller metros, a larger percentage of the potential workforce may be sitting on the sidelines and not actively seeking work than in the big metros. But the booming economy seems to be changing the attitude of millions of Americans, and we may well see more discouraged workers entering the workforce.

When Virginians get jobs, they not only earn wages and pay state, federal and payroll taxes, in some instances they drop off disability rolls, stop drawing food stamps, and get medical insurance — thus reducing payouts for the social safety net. It won’t last forever, but it is a good news story. Let’s relish it while it lasts.

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10 responses to “Virginia’s High-Employment Economy”

  1. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Jim, sorry to say this, but it seems that you are flying fast over this story at 30,00 feet, seeing next to nothing of consequence. For example:

    Last week here on this blog Virginia’s small towns and cities were said to be dying, had no future at all.

    Today, a long weekend later Virginia’s small towns and cities are thriving, outperforming its dense urban areas in terms of employment, and are said to have more jobs that they have workers to fill those jobs.

    What’s happened over that long week-end? Who is responsible?

    How long has it been going on without anybody reporting it?

    Why has no one reported it until the Bureau of Labor Statistics?

    Are we blind until the Bureau of Labor Statistics hits us oven the head with what’s been hanging in front of our nose for at least since the last presidential election?

    And why can’t Virginia produce the workers to fill all these open good jobs? After all didn’t we report a few month’s ago that Virginia had one of the very best systems of education in the entire nation? And with its costs of education going through the roof, why in the world can Virginia not produce workers capable and willing to fill these jobs, and work for a living, instead of rioting in the streets, and complaining all the time?

    What is happening here? What is behind all of this? Whose fault is it?

    1. James A. Bacon Avatar
      James A. Bacon

      I agree, the good news story has gone woefully under-reported. I was watching NBC the other night. They ran a story about the economy. Was it about the record-low unemployment rates for blacks and Hispanics? Of course not, the story focused on rising gasoline prices!

      Even here in Virginia, the local media has reported next to nothing about the booming economy (outside token statistical reports on the business page). The coverage tracks the agenda of the social justice warriors.

  2. Steve Haner Avatar
    Steve Haner

    I do not see a conflict with the low unemployment rate in small MSAs (not the most rural counties) and concerns that economic growth is bypassing the rural areas. That close a match between existing jobs and job seekers is probably something that would scare off another new employer looking at those locations.

    1. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Yes, but those numbers tell me that the demand is there in those locations. The problem is that those who run the state and its institutions, state wide, region wide, and locally, are too incompetent and corrupt to meet and satisfy that demand.

      We have not leaders or followers, only a failing system. Stated another way, our leaders and now a growing portion of our citizens are trapped in that failing system. Thus cannot do what we have done so successfully before in so many places, including small towns and cities.

      Hell, we in my adult lifetime have totally rebuilt the Rocky Mountain west, up from a endless string of failed ghost towns, for goodness sake. And now we have far better and more powerful tools to the very same thing again, only this time do it even better. All we lack in the proper education, a strong will and the moral character and fortitude that our ancestors had.

  3. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Jim –

    One gets the impression that you and Steve, and Rippert, too, might be the last honest and competent reporters in the entire state of Virginia. I say that knowing full well that surely there are a few other honest and independent reporters left, a dwindling tribe of honorable scribblers, making its last stand against the leviathan state run by a close alliance of oligarchs, plutocrats, and bureaucrats, and their elitist professional cabal of prostitutes.

  4. LarrytheG Avatar
    LarrytheG

    I was not clear in my opinion about small towns.

    I was speaking about the small towns we see in the rural counties…usually a 2-5 thousand people… I was not talking about the larger ones that are 20-25K and up that often function as de-facto county seats and have a significant Federal and State government presence that helps to stabilize their economy.

    here’s a few :

    Wachapreague (Accomack County)
    Wakefield (Sussex County)
    Warsaw (Richmond County)
    Washington (Rappahannock County)
    Waverly (Sussex County)
    Weber City (Scott County)
    West Point (King William County)
    White Stone (Lancaster County)
    Windsor (Isle Of Wight County)
    Wise (Wise County)
    Woodstock (Shenandoah County)
    Tazewell (Tazewell County)
    The Plains (Fauquier County)
    Timberville (Rockingham County)
    Toms Brook (Shenandoah County)
    Troutdale (Grayson County)
    Troutville (Botetourt County)

    Many here probably have never heard of them… I’ve been to most of them and many others like them… here’s a good list:

    https://simple.wikipedia.org/wiki/List_of_towns_in_Virginia

    It’s more than the employment rate that is at issue – it’s how many actual jobs there are – and what the trendline is for more jobs…

    When you travel through these towns – you’ll see that most of them are relics of a farming era where the car dealers and feed stores used to concentrate.

    Most of them now have the buildings where these businesses used to be but the actual businesses are long gone. Farming is largely gone – as any kind of economic anchor. The Mom & Pops that used to line the streets – the hardware stores, the corner grocery, shoe stores, they’re all gone largely because regional WalMarts have gobbled all that up.

    I find no good feelings about pointing this out – other than if we really want to deal with the realities -we do have to confront them.. and the reality is that throughout most of rural Virginia – the little towns that were an integral part of those counties are largely hollowed out shells in any realistic economic sense.

    And perhaps it’s my own limited vision – but I just don’t see how those towns come back.. The good news is that the bigger towns do have jobs for the youngsters who live in the rural counties so perhaps they don’t have to go to the big urban areas to find work and the kind of work is down a notch from the cutting edge technology jobs.

  5. djrippert Avatar
    djrippert

    Unemployment isn’t falling. The population is shrinking and getting older. In the United States, the labor force includes all persons aged 16 years or over that are economically active within the period of time being reported. People are economically active if they are employed, self-employed, serving in the military, or are unemployed but are looking for work.

    18% of people in Staunton are 65 and older. 5.6% of people in Loudoun County are 65 and older. Most people 65 and older are not economically active and, therefore, do not count as unemployed.

    Let’s say a town has 100 people. 50 are under 16 or not economically active (mostly retired). The are 45 jobs. The unemployment rate is 10%.

    Five years later, there are still 45 jobs but 5 more people retired. The unemployment rate is 0%.

    You need to look at the demographics of these small metros.

  6. TomH Avatar
    TomH

    I don’t intend to throw cold water on a good news story, but I think we need some perspective about our reliance on government statistics. I live in the area with the lowest unemployment in the chart. I would not say it feels like a “booming economy”.

    I grew up in a booming economy in Michigan in the 50s and 60s. This is not that experience at all. We know that large organizations are no longer the source of new jobs, small to medium businesses are. Have we really seen a significant increase in small to medium businesses in Virginia? There are still many empty storefronts in this area, even in the moneyed center of Charlottesville.

    Our employment figures are skewed, just as our inflation, deficit and other numbers are. People who have given up looking for work are excluded, workers employed in jobs far below their educational levels or past experience are considered fully employed. Purchasing power of family incomes is stagnant or declining. Our inflation and cost of living calculations are reduced every time a new cell phone or computer is introduced.

    We live in an era where the manipulation of perceptions is important rather than a clear-eyed assessment of what is really going on.

    There is a definite mismatch between the skills required and those that many workers (or wannabe workers) have. Those folks have only the burger chains and Walmarts as sources of employment.

    After my father passed away, I sorted through his everyday and professional work clothes. There is no comparison to the level of quality in those everyday items compared to what is available today.

    We are becoming numb to what a vibrant economy and community feels like. The 10-year bull market we have experienced that was created by phony money was one of the weakest in history. As long as we get excited about being mediocre we are failing ourselves and future generations.

  7. James A. Bacon Avatar
    James A. Bacon

    Don and TomH, good comments about small-town demographics. When I referred to a “booming” economy, I meant the national economy. Call it trickle down — some of the economic expansion is reaching the small metros. What the unemployment figures don’t tell you is how much actual job creation is occurring in the small metros. Probably not a lot, but I would attribute the declining unemployment rate to more than a one-year surge in the number of people retiring and dropping out of the workforce.

    Unemployment is just one metric. For a full picture, we need to look at job growth, wage growth, labor force participation rate, and other factors.

  8. LarrytheG Avatar
    LarrytheG

    And in Virginia, we need to distinguish between independent cities and towns that are part of counties especially in rural areas that are not within commuting distance of a jobs-rich urban area.

    Take for instance, Fredericksburg – which is now as much an exurban settlement area as it was a stand-alone city before the advent of I-95.

    Take another – the town of Quantico right outside the main gate of the Marine Corps base or Leesburg or Middleburg in Loudoun.

    Compare and contrast those places with towns like Fries, Alberta, Boone’s Mill which I bet almost no one here can say where these places are geographically, the population, nor the unemployment rate or other stats.

    But if you actually would visit those places – there would be no doubt as to their economic vitality.

    here’s an example:

    https://farm5.static.flickr.com/4239/35234622256_9e89dd04ac_b.jpg

    Places like this – I don’t know how they revitalize.. they sure appear to be artifacts of a bygone era.

    And DJ has it right. if most everyone has left a place and only a few are left behind to run the Post Office and the local Get n GO and the Courthouse functions… and school.. it may well not show up with a “high” unemployment rate.

    Labor participation rate is much more relevant.

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