Virginia unemployment drops to 2.8%, but staffing problems persist

Virginia’s labor force expanded by 6,250 employees last month, dropping the state unemployment rate to 2.8%, the lowest it has been since the month before the COVID-19 pandemic began more than 28 months ago.

But the industry with the biggest job gains — hotels and restaurants — is still struggling to find employees to fill jobs.

“The June unemployment rate dropping to 2.8% is promising news for Virginia’s economic health and is a welcome return to pre-pandemic unemployment levels,” Gov. Glenn Youngkin said in a statement following the release of monthly employment data by the Virginia Employment Commission on Friday.

“In such a competitive labor market, we remain committed to expanding workforce development opportunities for Virginians,” he said.

For Youngkin, the most important number is the more than 4.2 million Virginians who are employed, a gain of 13,792 from May to June, according to the household survey that the Virginia Employment Commission released on Friday.

Elected last fall partly on a commitment to accelerate the state’s recovery of jobs lost during the pandemic, the governor estimated Virginia has added almost 94,000 employed residents since Feb. 1, about two weeks after he took office.

“While the 94,000 job additions is promising, we must remain vigilant regarding the workforce participation rate, which does continue to lag,” Youngkin said. “I am focused on increasing Virginia’s participation rate across the commonwealth.”

Virginia’s labor force participation rate remained unchanged in June at 63.8%, about 7 percentage points lower than its peak in 1992. The state labor force rose to nearly 4.4 million Virginia residents last month, as the number of unemployed residents declined by 7,542 people.

But Virginia businesses and other employers continue to struggle to fill jobs and retain workers almost 2½ years into the ongoing pandemic.

The leisure and hospitality industry made the biggest gain in June, compared with the same month a year earlier, adding an estimated 62,300 jobs, according to a monthly survey of 18,000 Virginia businesses by the U.S. Bureau of Labor Statistics and released by the VEC on Friday. The industry added 3,400 from May to June.

However, leisure and hospitality businesses estimate they lost 95,000 jobs in Virginia during the pandemic, so they’ve recovered only two-thirds of them.

“It is still dire,” said Eric Terry, president and CEO of the Virginia Restaurant, Lodging and Travel Association. “We are still struggling with staff.”

A national survey of hotels showed that 97% reported staffing shortages. In Virginia, some hotels don’t rent rooms on nights they don’t have employees to service them, and some restaurants close one or two days a week for the same reason.

“We’re not even close to recovering,” Terry said Friday.

The second largest gain was in the education and health sector, which added 26,200 jobs, followed by business and professional services at 16,400 jobs.

Local governments gained 1,000 jobs in June compared with a year earlier and state government added 900, but the federal government shed 4,200 jobs during the 12-month period, according to the survey.

Statewide, employers added 123,400 jobs from June, 2021, through last month. Most of the gains were in Northern Virginia, which added 45,800 jobs, followed by the Richmond area at 15,800 and Hampton Roads at 8,300.

On a percentage basis, the Blacksburg-Christiansburg-Radford area saw the biggest increase, 8.2%, or an additional 6,100 jobs compared with the same month a year ago.

Original Article: (https://richmond.com/news/state-and-regional/govt-and-politics/virginia-unemployment-drops-to-2-8-but-staffing-problems-persist/article_dd84e91d-ecd1-5c87-a4b3-5a95e7a839c0.html)