Economy

Unemployment

Unemployment

The unemployment rate -- the number of currently unemployed people seeking jobs -- is a vital indicator of the health of a state's economy and the happiness and satisfaction of its citizens. Virginia's unemployment rate increased in 2008 with the downturn in the national economy, but remained lower than all but eight other states.

Why is This Important?

Unemployment is a measure of how many people without jobs are actively seeking employment. Since most people earn a living through a job, unemployment is also a measure of how the economy is doing in providing opportunities for Virginians to support  themselves and their families. Unemployment not only hurts the personal finances of those without jobs, but also reduces their participation in the overall economy. The inability to find work is also associated with psychological stress, health problems, and stress on family relationships.

How is Virginia Doing?

Only people who have jobs or who are actively seeking one are part of the labor force; unemployed people who have stopped looking for a job are no longer counted as members of the labor force. In 2008, Virginia, with a 4.0 percent unemployment rate, ranked ninth among the states.  South Dakota had the lowest unemployment rate at 3.0 percent. Virginia's 2008 rate was lower than its peers -- North Carolina (6.3 percent), Tennessee (6.4 percent) and Maryland (4.4 percent) -- and lower than the national rate of 5.8 percent.

Across the state, the unemployment rate varied in 2008 from a high of 7.2 percent in the Southside region to a low of 3.0 percent in the Northern Region. The central tier of the state (Central and West Central regions) had rates between 4.2 percent and 4.3 percent. The Southwest region was second highest  with 5.4 percent unemployment. In the last decade, the Southside and Southwest regions have routinely experienced higher rates of unemployment than other regions, largely due to the loss of manufacturing jobs and limited economic growth.  For current monthly unemployment statistics, explore the state's Labor Market Information (LMI) tools.

Examination of Virginia's unemployment by industry reveals that certain fields, such as construction, manufacturing, and leisure, have relatively higher rates of unemployment. Financial services, government, transportation, and education and health services have relatively lower unemployment rates than other industries in the state. See Employment Growth for more details.

What Influences Unemployment?

In the short run, unemployment is largely driven by national macro-economic factors. The jobless rate in Virginia moves with the national business cycle. This is especially true for industry-specific data, as it is highly dependent on performance trends for each particular field.

The national economy entered a recession in 2008, which contributed to the increase in Virginia's rate of unemployment.   However, the influence of federal government spending in Virginia has muted its response to the recession. The large share of federal spending in the Commonwealth does carry a risk of lower growth in periods where federal spending slows.

Among the long-term factors that affect the unemployment rate in Virginia are those that also affect the state's overall competitiveness: education levels, infrastructure investments, tax rates and the regulatory environment. Any changes that improve Virginia's attractiveness as a place to live or to do business will, over longer periods of time, tend to reduce the unemployment rate.

What is the State's Role?

State government has a number of programs that are designed, at least in part, to reduce the level of unemployment or to reduce its impact on people's lives. Most of the work of the Virginia Employment Commission (VEC) is directly related to addressing issues of unemployment, including worker training programs. The Unemployment Insurance Program provides temporary financial support for workers losing their jobs. The VEC also has numerous programs designed to match unemployed workers with firms that have jobs to fill. The Virginia Workforce Network (VWN), which is the local service delivery system created by the federal Workforce Investment Act, is also a state response to unemployment.

The state's community colleges help retrain workers so that they can develop the skills they need to re-enter the workforce. The Virginia Economic Development Partnership works to bring new employers into the state and to encourage existing employers to keep jobs here. The Virginia Initiative for Employment not Welfare (VIEW) helps Temporary Assistance to Needy Families (TANF) recipients prepare for and find jobs.