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. As with nearly every state in the U.S., Virginia's unemployment rate dropped in 2012 as the economy continued to recover from recession; Virginia's unemployment rate was lower than all but 12 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 work, 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. With a 5.9 percent unemployment rate, Virginia ranked 13th among the states in 2012. North Dakota again had the lowest unemployment rate at 3.1 percent. Virginia's 2012 rate was lower than its peers -- North Carolina (9.5%), Tennessee (8.0%), and Maryland (6.8%) -- and lower than the national rate of 8.1 percent.
Within Virginia, the unemployment rate in 2012 varied from a high of 9.2 percent in the Southside region to a low of 4.5 percent in the Northern region. The central tier of the state (Central and West Central regions) had rates between 6.2 to 6.4 percent. The Southwest region was second highest with 7.8 percent unemployment. In the last decade, the Southside and Southwest regions have routinely experienced higher rates of unemployment than other areas, 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 -- construction, information services, manufacturing, and leisure and hospitality -- typically have higher rates of unemployment than other areas. However, additional fields have recently seen higher unemployment than in earlier years -- trade and professional and business services among them. Government, financial services, and education and health services typically have lower unemployment rates than other industries in the state; in 2011 transportation and utilities also saw unemployment rates below 4 percent. 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 national performance trends for each particular field.
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 to reduce the level of unemployment or to lessen its impact on people's lives. Most of the work of the Virginia Employment Commission (VEC) is directly related to addressing unemployment issues, 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.
State rankings are ordered so that #1 is understood to be the best.
Data Definitions and Sources
State and regional unemployment data are from
the U.S. Bureau of Labor Statistics, Local
Area Unemployment Statistics
www.bls.gov/lau/home.htm (updated annually in April and May)
State industry unemployment data are from the
U.S. Bureau of Labor Statistics, Geographic
Profile of Employment and Unemployment
See the Data Sources and Updates Calendar for a detailed list of the data resources used for indicator measures on Virginia Performs.