Employment Growth

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Employment Growth

Employment growth reflects the rate at which the economy is creating and filling new jobs. Continuing its recovery from recession and federal budget cuts, Virginia once again added new jobs to its economy in 2015, but this time with brisk growth, outpacing the national average. Wages and salaries also continued to climb.

Why is This Important?

Employment growth is an indicator of expansion in the economy and represents an increase in the economic opportunities available to the citizens of a region or state. Employment growth is generally tracked as a percentage change from a previous year.

How is Virginia Doing?

Although in positive territory from 2011 to 2014, job growth in the Commonwealth continued to lag behind both overall U.S. growth and that found in our peer states. Many economists attribute the overall sluggish increase in the employment rate in part to the federal sequestration implemented at the start of 2012, where significant across-the-board cuts in spending have affected many state economies. Given its extensive military infrastructure and the Northern region's role as part of the Washington, D.C. metropolitan area, Virginia is seen as especially vulnerable. However, with the passage of the bipartisan Budget Acts of 2013 and 2015, these sequestration cuts have eased somewhat.

Annual Percentage Change in Employment. See text for explanation.

In 2015, employment growth in the Commonwealth bounced back to 2.2 percent -- above the U.S. average of 2.1 percent and ranking the state 16th overall. Virginia's growth rate was higher than Maryland (1.50%), but lower than North Carolina (2.56%) and Tennessee(2.57%). Utah was the national leader in 2015, with a job growth rate of 3.77 percent.

Annual Percentage Change in Employment, By Region. See text for explanation.

Regionally speaking, employment growth rates in 2015 were finally all in positive territory, but with wide variations. The Central region again outpaced the rest of the state (3.20%), followed by the Northern (2.01%), Hampton Roads (1.80%), Valley (1.60%), and Southside (1.57%) regions. This marks the first time in over 16 years that the Southside region has seen positive job growth.

The Southwest (0.41%) and West Central (0.91%) regions had the slowest job growth rates in 2015.

Wages and Salaries

Coupled with employment growth, average annual wages and salaries provide a more complete picture of Virginia's economic health. The good news is that in 2015, inflation-adjusted wages and salaries rose in every state but Wyoming -- and often by the heftiest margin in years, although incomes still remain relatively stagnant compared to a decade ago. Virginia's average wage was $54,282, up from $52,992 the year before and again exceeding the national average ($52,937). Virginia also finally exceeded the previous peak ($53,968) the state had attained in 2010.

Nationally, all previous wage patterns held steady in 2015: New York led all states with an average wage of $67,491; Maryland's average wage ($57,168) was higher than Virginia's, and North Carolina ($46,536) and Tennessee ($46,731) were notably lower.

Regionally, the Northern region's average wage of $70,355 once again led the state in 2015 and represents a reversal of declining averages the region had seen since 2010. The Southside ($32,877) and Southwest ($34,475) regions were again the lowest, but all regions in the state saw improved average wages.

Wage and Salary Average by State. See text for explanation. Wage and Salary Average by Region. See text for explanation.

What Influences Employment Growth?

The three most important factors influencing employment growth are national business cycles (expansions and contractions in the economy), the mix of industries / businesses, and the relative attractiveness (competitive advantages) of the region.

Although underlying business cycles may be similar across the nation, it is the mix of industries that most affects the magnitude of the variation in any state or region's employment growth. For example, through most of the last 10 years, employment growth in Virginia and the nation has been significantly influenced by a continued shift from goods-producing jobs to service-oriented ones, especially in healthcare, social assistance, and business services. Similarly, a sizable reliance on defense-related industries has made the state more vulnerable to federal spending cuts.

States and regions with competitive advantages relative to other regions are also more likely to maintain their existing businesses and to experience growth. Because business is the driving force behind job creation, an attractive business climate is more conducive to higher levels of employment growth.

What is the State's Role?

The state's primary role in employment growth is to provide the infrastructure -- education and training, workforce development, transportation, and other public goods, such as research and development -- that reduces the transaction costs associated with economic activity and spurs growth. Virginia has developed two assessment tools -- the Workforce System Report Card and the Innovation and Entrepreneurship Report Card -- that are designed to monitor the state's performance in each of these important areas.

The Workforce System Report Card works to better coordinate Virginia's varied workforce development and training resources and to track and improve the quality and marketability of our workforce as a whole. The Innovation and Entrepreneurship Report Card delineates goals for boosting innovation and economic growth via increased support for R&D, new capital, and new technologies, as well as improving the state's talent pipeline and high-tech infrastructure.

Adequate infrastructure also allows private business to better respond to emerging economic opportunities. In addition, the state can assist in employment growth by fostering a competitive business climate.

Page last modified July 25, 2016
Percent of Change in Employment, by State Percent Change in Employment, by Region Adjusted Wages and Salaries by State Ajusted Wages and Salaries by region

State rankings are ordered so that #1 is understood to be the best.

Data Definitions and Sources

State and Regional Data
Quarterly Census of Employment and Wages,

Note:  When comparing average wages/salaries over time, the dollar values must be "adjusted" to account for inflation. Inflation, which is the general rise in price level, means that a dollar today is generally worth less than a dollar in the past. To account for the difference in value over time, we divide wages/salaries by the consumer price index (CPI), which is one measure of inflation.

See the Data Sources and Updates Calendar for a detailed list of the data resources used for indicator measures on Virginia Performs.

At a Glance:
Employment Growth in Virginia

Performance Trend:  Trend is maintaining.
State Influence:

National Ranking: 16th in 2015 for employment growth and 10th for average annual salary or wage ($54,282 in 2015 dollars). 

Virginia by Region: The Central region again saw the fastest rate of job growth in 2015, while the Northern region led the state in terms of average annual wages.

Related Agency Measures
State Programs & Initiatives

The Virginia Economic Development Partnership is the Commonwealth’s primary marketing organization. In collaboration with communities across the state, VEDP promotes business recruitment and relocation and the growth in exports of Virginia products and services. VEDP also offers:

Virginia Enterprise Zones: The new Enterprise Zone Grant Program offers two grants for qualified business firms and zone investors: wage-based job creation grants and real property investment grants.

The Center for Innovative Technology (CIT) promotes technology-based economic development and helps foster the next generation of technology and technology-based companies. 

Additional Information

Promise Zones are a new federal initiative to boost economic growth in challenged areas through federal partnerships with local communities and businesses. Their chief goals are to create jobs, expand educational opportunities, and increase access to quality, affordable housing. A total of 22 promise zone communities have been created under the Obama administration, including five in the Southeast.

The newly reauthorized Workforce Innovation and Opportunity Act restores federal grants to states and cities for job training programs; the latest version of the bill, however, adds new accountability for results and is designed to track not just enrollments but outcomes (who gets work and at what pay).

For monthly statistics on jobs and unemployment in Virginia, check out the Labor Market Information pages. The LMI provides a wealth of data on the state's labor force, industries and demographics, including ways to research and compare information down to the locality level.