Virginia Losing Advantage

For a while, Virginia’s employment situation was better than the nation as a whole, but now job growth is slipping compared to most other states.

Virginia wasn’t hit as hard by the recession as many other states, mostly because the presence of federal jobs and businesses that contract with the federal government acted as a sort of buffer. When Washington increased spending to combat the recession Virginia got a bigger boost than states with less connection to federal government employment and spending.

Unfortunately, there’s a flip side to that advantage: as the federal government moved into a period of austerity Virginia’s economic growth slowed. One place to see this is in the recently released jobs numbers.

Virginia is just shy of the number of jobs that existed before the recession began, according to statistics from the Bureau of Labor Statistics Current Employment Survey. The same is true in the country as a whole. But this is a sharp contrast from the depths of the recession, when Virginia was doing much better compared to the rest of the country.

As of early 2010, the U.S. had lost six percent of all pre-recession jobs, but Virginia had lost just four percent. And for a time, Virginia was recovering from the recession at a similar pace to the U.S. as a whole. This changed in early 2013. Virginia’s job creation slowed to a crawl. Our fellow federally-dependent northern neighbors in Maryland and DC have seen the same reversal of fortunes. Meanwhile, the U.S. as a whole continued adding jobs.

The picture looks even worse when we look at employment levels compared to the population of working-age Virginians. Virginia needs another 360,000 jobs to regain its pre-recession employment rate. That’s more than twice the number of jobs that Virginia has restored since the depths of the recession.

As employment growth slows, Virginia’s jobs hole gets deeper. And the state’s good fortune begins to fade.

–Laura Goren, Policy Analyst