Skip to main content
You are the owner of this article.
You have permission to edit this article.
'We hear a lot about the need for workers': Virginia unemployment declined in April, but the labor force also dropped overall

'We hear a lot about the need for workers': Virginia unemployment declined in April, but the labor force also dropped overall

  • 0

Virginia senators share VEC complaints from their constituents

Virginia’s unemployment rate continues to drop as the COVID-19 pandemic slowly recedes, but the job market still has some major issues along with an overall economy that is in flux.

While the number of people who were reported as employed in Virginia jumped by more than 4,600 in April, the state’s labor force also decreased by 12,422 to 4,225,614.

The overall outlook from Virginia’s April jobs report was “somewhat downbeat,” said Joseph Mengedoth, a regional economist for the Federal Reserve Bank of Richmond.

Virginia’s unemployment rate stood at 4.7% in April, down 0.4% from March. That was well below the national jobless rate of 6.1%.

While that’s a sign that hiring is improving in Virginia, the data also indicates that lots of people are staying out of the workforce, either because they remain worried about the risks of catching COVID-19 or they can’t find jobs that match the skills or hours demanded by employers.

“We hear a lot about the need for workers,” said Mengedoth, adding that many of those employers also say they are struggling to find the right workers to fill jobs.

A rapid recovery of jobs was seen from May to October 2020. Since November, though, employers in Virginia have added only about 2,000 jobs a month.

The job increases aren’t enough, even in industries that saw growth, such as hospitality. And labor shortages along with this month’s increase in the minimum wage in Virginia from $7.25 to $9.50 an hour are driving some employers to offer higher pay in order to recruit workers.

Employers in Virginia have recovered about 58% of the roughly 480,000 jobs that were lost during the worst of the pandemic’s economic downturn a year ago, but the recovery also has slowed since October.

The labor force participation rate — a measure of how many people are either employed or actively seeking work — was down to about 62.7% in April, a figure that has not been so low since the data began to be collected.

The labor force participation rate had reached nearly 67% before the pandemic hit.

A slowdown in jobs recovery was always expected as businesses most affected by the pandemic struggled to get customers and workers back, said Renee Haltom, a vice president and regional executive for the Federal Reserve Bank of Richmond.

That includes the hospitality and tourism sector of the economy.

“Some of the latest sectors to recover are those that rely on things like business travel,” Haltom said.

At the same time, businesses are facing an increase in the cost of raw materials and other goods to run their operations.

“Supply chains are also big issue right now,” she said. “Any firm that manufactures is feeling pressure on the supply chain. Raw materials prices are surging.”

For instance, prices in the construction industry, including for lumber, have been rising, putting pressure on construction firms.

New-home sales in the Richmond area actually increased in 2020.

“Our material prices are absolutely out of control,” said Danna Markland, CEO of the Home Building Association of Richmond, in a presentation to the Chesterfield County Chamber of Commerce on Wednesday. Builders are now “turning away sales.”

A confluence of factors has created “a completely inconceivable market,” in homebuilding, Markland said. “The industry has reached capacity” and never really recovered in terms of labor availability from the housing market crisis of 2008 and 2009.

The construction industry added more than 8,000 jobs since last year, according to a report from the Virginia Employment Commission, but it lost 1,400 jobs between March and April of this year.

The leisure and hospitality industries actually added jobs in April, according to a report from the VEC, about 1,000 across the state, as did manufacturing, information and mining.

Overall, employment rose in six of the 11 “major industry sectors,” according to the VEC’s monthly report, but lost jobs in five industries last month, including construction, government, finance, and professional and business services.

Restaurants, the industry that saw the steepest job losses at the start of the pandemic, continue to struggle to bring on enough workers to operate at their pre-pandemic hours.

“We did the math last week, and we still need 100 people across the EAT landscape,” said Chris Staples, director of marketing for EAT Restaurant Partners, the largest independently owned restaurant group in the Richmond area.

That hiring effort includes the group’s newest restaurant, Pizza & Beer of Richmond: Hanover, which opened in March in The Shoppes at Rutland Place at 9325 Chamberlayne Road.

The group hoped to open the new restaurant seven days a week, but doesn’t have enough staff to operate more than five days a week for now.

Staples said the group has been ramping up hiring efforts, including upping pay “across the board, but especially in the back of the house.”

The group also launched referral bonuses for employees and new hires, where each will get a $250 referral bonus — after 60 days of employment. Staples said the group added the 60-days requirement when it found some new associates were lasting only a few days or weeks before quitting.

“We’re having some luck [on hiring],” he said, “but it’s not anywhere we like to see it.”


Related to this story

Most Popular

Get up-to-the-minute news sent straight to your device.


Breaking News