Virginia unemployment drops to 3%; employment still below pre-pandemic level
(The Center Square) – Virginia’s unemployment rate continued to drop in March, falling to just 3%, but its total number of employed people and its labor participation rate are still lower than their pre-pandemic levels.
The unemployment rate dropped by 0.2% since February and its 3% rate keeps it below the national unemployment rate of 3.6%. The labor force increased by 19,532 jobs and its total number of employed residents rose by 24,454 people. The total number of unemployed residents decreased by 4,922. The labor force participation rate increased by 0.3 percentage points, up to 63.3%.
Virginia has the second lowest unemployment rate in the southeast and the 15th lowest in the country.
“We’re seeing green shoots in job recovery as we hit the lowest unemployment rate in the Commonwealth in nearly two years, that’s really exciting,” Gov. Glenn Youngkin said in a statement. “My administration is focused on continuing this trend, creating jobs, and boosting our economy. We’re going to have a big surplus and we look forward to investing that back into Virginians, job recovery, our economy, education, law enforcement and mental health.”
The unemployment rate in March was 1.5 percentage points lower than it was one year ago when some COVID-19 pandemic restrictions were still in place. At this stage, hardly any restrictions are still in place.
Although the numbers demonstrate a continued economic recovery, the commonwealth has not fully recovered from the pandemic in every category. The state still has about 200,000 fewer jobs than it had before the pandemic started and the labor participation rate is nearly three percentage points lower, according to Stephen Haner, a a senior fellow for state and local tax policy at the free-market Thomas Jefferson Institute.
“Right before the pandemic Virginia employment was about 4.36 million so we are still about 200,000 jobs to the negative,” Haner told The Center Square. “Likewise the labor participation rate was 66% and now is back to just above 63% of the work-age population. An overtime General Assembly still dithering over modest tax cuts and locked into a high-expense, low-reliability energy future probably means we continue to just claw back toward reaching the old peaks, while some states are reaching new heights.”
Lawmakers are still debating the budget and some proposed tax cuts, which supporters argue will assist with the economic recovery. The General Assembly entered into a special session more than two weeks ago to reach an agreement on these bills.
One proposal that Republicans introduced would suspend the state’s 26.2-cent-per-gallon gasoline tax for three months, which received support from the tourism industry. An alternative plan from Democratic lawmakers would keep the gas tax untouched, but send $50 rebates to drivers. Another Republican proposal would provide a broad tax cut to the middle class by doubling the standard deduction, but it’s failed to get support from Democrats. The two sides are also debating the specifics of whether to reduce the state’s grocery tax or fully eliminate it.