Virginia unemployment decreases, continues to outperform nation
(The Center Square) – Virginia’s unemployment rate dropped from 5.6% to 5.3% in January and continues to outperform the national average, which was 6.3% in that month, the governor’s office announced this week.
Unemployment numbers are still worse than they were at the same time last year, primarily driven by the COVID-19 pandemic and subsequent economic restrictions. Although businesses have more freedom to operate, the commonwealth still has an on-site alcohol curfew of midnight and restricts event gatherings.
“While the COVID-19 pandemic continues to put incredible strain on our economy, we are hopeful that the unemployment rate will continue to fall as more people get the vaccine and return to work,” Northam said in a statement. “Thanks to President Biden’s American Rescue Plan, stimulus checks and extended unemployment assistance are now on the way to millions of Virginians, providing a critical boost to our recovery. We are turning the corner, and our Commonwealth is moving forward.”
In January, the total labor force decreased by 1,452 people and the total number of unemployed residents decreased by 8,920 people. The number of employed residents increased by 7,468.
Although the commonwealth is outperforming the nation, a recent WalletHub report found that the state’s unemployment recovery has been one of the slowest in the nation. According to the report, the commonwealth’s recovery ranked 49 when compared to each state and the District of Columbia. This report considered changes in the number of unemployment claims.
Stephen Haner, a senior fellow for state and local policy at the free-market Thomas Jefferson Institute, told The Center Square that upcoming policy changes may cause some problems for businesses and the economy as they try to recover from the pandemic.
“Just about every sector of employment was still down except for the federal government,” Haner said. “Construction was flat, and that unfortunately counts as good news – at least it stayed flat. On May 1, the minimum wage rises 31% to $9.50 and other new workplace regulations go into effect, such as Davis-Bacon Act wage mandates. There is nothing going on in state government that will improve those job numbers, just the opposite.”
The minimum wage will increase from $7.75 per hour to $9.50 per hour on May 1, 2021. Then it will continue to gradually increase: $11 per hour on Jan. 1, 2022 and $12 per hour on Jan. 1, 2023.
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