Virginia continues to recover economically from the pandemic. But, a new report suggests we may be tracking that progress the wrong way.
One of the key metrics analysts use to track the health of the economy – both nationally and at the state level – is the unemployment rate. Last month, Virginia recorded a 3.4% unemployment rate – and it’s been dropping for a year and a half.
But, Bob McNab at Old Dominion University says that’s not the complete picture. You have to factor in the overall labor force.
“When we do that, we find that the labor force could vary between three percent and eight percent depending on the metro region," McNab explains. "Which suggests that employers are competing for a much smaller pool of unemployed individuals.”
The rate doesn’t account for people who left the labor force entirely – maybe because they need to take care of a child.
“More troublesome, the accelerated retirement of baby boomers means we are looking at lower rates of labor force growth in the future,” he adds.
McNab says getting Virginians back into the labor force will be essential to the state’s recovery. And he adds that expanded unemployment benefits don’t appear to be a factor in that.
The State of the Commonwealth report makes some suggestions on how Virginia can best move forward. That includes updating its antiquated tax code and continuing to invest in things like K-12 education and broadband.
