Virginia unemployment stays low, but employers still have problems finding workers

By Tyler Arnold

(The Center Square) – Virginia’s unemployment rate remained unchanged in January, staying at 3.3%, but many employers are still struggling to find workers despite the relatively low rate.

“My administration is committed to boosting economic growth, creating jobs, attracting businesses, and lowering the cost of living for all Virginians,” Gov. Glenn Youngkin said in a statement. “One of our top priorities is ensuring that Virginia’s economy serves and benefits Virginia’s workers, businesses, and families alike.”

Numbers just released from the Virginia Employment Commission showed a steady rate in unemployment and a slight increase in the labor force. The labor force increased by 0.3 percentage points to 62.9%.

The labor force increased by 16,461 workers during the month to reach nearly 4.28 million. The number of employed residents rose by 18,353 to reach nearly 4.14 million and the total number of unemployed residents went down by 1,892 to go down to 139,261. The non-farm payroll employment went down by 4,900 jobs.

From January 2021 to January 2022, the commonwealth gained 89,900 jobs, which is a 2.3% increase from the previous year. In that timespan, eight of the state’s 11 major industry divisions saw job increases, while the other three saw losses.

The largest increases were leisure and hospitality, which saw a 13.7% increase, amounting to 46,200 jobs. The second largest increase was professional and business services, which saw 17,700 new jobs. Manufacturing saw the most losses, with 2,800 fewer jobs and construction saw the second most losses, with 1,700 fewer jobs.

Despite the promising numbers and the economic recovery from the COVID-19 pandemic, some business groups are still reporting problems in finding workers to fill open spaces.

“Small business owners continue to have problems hiring workers,” Julia Hammond, the Virginia State Director for the National Federation of Independent Business, told The Center Square. The NFIB is the largest small business association in the country.

According to NFIB data, nearly half of small businesses nationally have job openings they are unable to fill, despite unemployment numbers improving. The 48-year average is just 23% of businesses.

Hammond said lawmakers need to focus on tax cuts and job creation programs. The General Assembly failed to come to a budget agreement by its deadline last week and postponed budget negotiations until a special session.

“Mom and pop shops across the state are in limbo right as legislators gaveled out last weekend without finishing up business,” Hammond said. “What small business owners need right now are tax cuts. The legislature has billions in federal money and the opportunity to make a difference for job creating entrepreneurs. NFIB is calling on legislators to get back to work before more small businesses here in the Commonwealth fall victim to government mandates and high taxes.”

Robert Melvin, the director of government affairs at the Virginia Restaurant, Lodging & Travel Association, told The Center Square that it’s great to see low unemployment, but that many businesses his organization represents are still seeing shortages. He said lawmakers failed to include hospitality and tourism relief in their budget proposals, for which the group had been advocating.

Some restaurants are still forced to have shorter hours or close additional days because of the shortages, Melvin said. Some hotels have also been unable to rent out all of their rooms because they don’t have enough people to clean them out to make them ready, he said.

The special session for the budget has not yet been scheduled.

Tyler Arnold reports on Virginia and West Virginia for The Center Square. He previously worked for the Cause of Action Institute and has been published in Business Insider, USA TODAY College, National Review Online and the Washington Free Beacon.