Speaking of unemployment ....
There is a perception in some circles of the New River Valley that we are somewhat insulated from current or past recessions. Data collected by federal government sources paints another picture.
Americans have weathered recessions over the last half century during 1960-1961 (in response to increased government spending), 1973-1975 (OPEC quadrupling oil prices), 1980-1982 (Iranian Revolution), 1990-1991 (Gulf War), and 2007 to today (inflation and credit crisis). While a recession cannot be documented until six months after downward trends in the Gross Domestic Product (GDP), leading indicators showing one is imminent include decreasing building permits, limited access to credit, reduced new orders in manufacturing, and increased unemployment.
While brokers on Wall Street will pause Friday, March 6 at 8:30 am to hear the latest “Employment Situation” report from the Bureau of Labor Statistics, we already know the picture isn’t rosy here in Southwest Virginia. These statistics show the NRV and Roanoke Valley are not so insulated, after all.
Regional lay-off reports shout out there have been approximately 3,000 lost jobs since October, with many more furloughs planned. In 2000, the national unemployment rate was 4.0% and for the state it was 2.3%. In Roanoke this rate was 2.2% but in the NRV it was 3.2%. One year later the annualized national unemployment rate was 4.7%, state 3.2%, Roanoke Valley 3.1% and NRV 4.5%. By 2002 this had climbed to 4.9% in the NRV, falling back to 4.7% in 2003 and 4.5% in 2004. By the end of 2008, the national unemployment rate was 5.8%, state 4.2%, Roanoke Valley 4.1% and NRV 5.2%.
This data shows the NRV unemployment rate is historically higher than that of the Roanoke Valley and often the entire state, more closely parallel to national averages. Part of this may be relative to workers who commuted into the Roanoke region for work, yet whose unemployment was tracked by their residential address. Part of it may be relative to the types of employment, and which regions within the state have more resilience due to broader economic bases (instead of being primarily tied to manufacturing, education or construction, for example).
What these numbers don’t show are the public and private dollars funding economic development efforts, much less thousands of hours provided by community volunteers who support these endeavors. These numbers don’t show that unemployment benefits are limited, both in the percent of lost income and duration. These numbers don’t show hours furloughed, those who accept other work for greatly diminished wages, or time and money spent on re-education.
Unemployment numbers don’t count the people who shift to self-employment or whose benefits have expired. These statistics don’t show the high cost to households or individual savings accounts. Unemployment rates do not measure the anguish a sluggish economy brings to communities, or increased demand for services provided by non-profit organizations or public agencies.
The Bureau of Labor Statistics tracks the Consumer Price Index, too, and when compared to the Virginia Auditor of Public Accounts, one gets the impression government sector spending has outstripped the rate of inflation. Government spending cannot be separated from the consumer or commercial sectors, as these are primary sources of revenues – when they are weak, tax collections diminish, too. Especially when this spending cannot be directly tied to short and long term results, such as that devoted to infrastructure, research and technology efforts.
The Bureau of Labor Statistics website has another sobering tool, allowing viewers to enter an amount to calculate the buying power of your money, comparing today’s dollars to that of other given years. Track the rate of inflation, and compare this to growth of personal income or government spending and the party is over.
So while consumer confidence remains a key factor in the health of the American economy, do not be cavalier when you hear this storm is wreaking havoc in our nation and thinking it will pass our own valleys without touching down. It is also right outside our own doors, and can be seen in the faces of our most vulnerable citizens and many neighbors now without viable jobs. Given the right circumstances, it might also be seen in a mirror.
This reinforces the need for our government – whether federal, state or local – to be frugal and making wise choices right along with us, and working mightily to diversify the foundations of our regional economy.