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Tag: opinion

Return to uncertainty

In the wake of the Federal Reserve lowering interest rates by half a percentage point in September, the stock market has been setting records, hiring numbers are trending strong, and the inflation rate has been slowly edging downward.

Nevertheless, many businesses — and workers — seem to be in a state of anxious uncertainty, awaiting the outcome of this fall’s tight, bitterly waged presidential election, as well as any signals that may give them a better insight into the economic outlook for 2025.

As Virginia Business Associate Editor Beth JoJack examines in her November cover story, Vibe check, companies are also trying to get a read on whether their employees might be watching for the right time to jump ship — a prospect that for many employers sets off traumatic flashbacks of the pandemic’s Great Resignation era and its attendant labor crunches.

You’d do well to keep this question on your radar. After all, in PricewaterhouseCoopers’ 2024 Global Workforce Hopes & Fears Survey, released in June, 28% of employees surveyed responded that they would be “very or extremely likely” to switch employers over the next 12 months. That may not sound like a lot — until you hear that during the height of the Great Resignation, just 19% of workers surveyed gave a similar answer.

So, it was a tad surprising that Amazon.com chose this moment to hurl a metaphorical bomb into the labor pool’s presently murky waters.

In mid-September, Amazon CEO Andy Jassy sent a memo directing all corporate staff to return to the office five days a week as of Jan. 2, effectively eliminating all options for hybrid work schedules “outside of extenuating circumstances.” The global e-tail Goliath, which has its East Coast headquarters, Amazon HQ2, in Arlington County, previously required employees to work at least three days a week in the office.

Jassy, who said he is also seeking to streamline bureaucracy and flatten management structures, noted that prior to the pandemic, people didn’t have expectations of working remote or hybrid schedules. And he said that he wanted Amazon, which had about 415,000 corporate employees as of 2022, to function like a startup, fostering “fast decision-making, scrappiness and frugality, [and] deeply connected collaboration.”

Needless to say, a lot of experts have been weighing in with thoughts on this move. Some analysts, perhaps cynically, have wondered if it isn’t an effort by Amazon to cut staffing without having to instigate layoffs. There will, after all, inevitably be employees who choose to quit because of this RTO mandate. One question is, how many? Will it kick off a wave of “rage applications” to other jobs? And will Amazon lose an edge in attracting and retaining in-demand talent, particularly in emerging sectors such as artificial intelligence? Competitors like Google, Meta and OpenAI still offer hybrid work, and Microsoft execs have said they have no plans for strict RTO policies unless productivity falls off.

To be fair, Amazon isn’t the only big company taking a harder stance on return to office. JPMorgan Chase CEO Jamie Dimon has been critical of how remote work has created office building vacancies and has told Fortune that remote work harms “spontaneous idea generation” and is bad for team management. And in KPMG’s 2024 CEO Outlook survey, released in September, almost 80% of the 1,300 CEOs polled worldwide said they thought hybrid workers would return to full-time office schedules by 2027.

But even so, would eliminating remote and hybrid work be good for workers and productivity, or a step backward?

In September, PwC released its Workforce Radar Report, a 13-month study that surveyed more than 20,000 chief executives, HR professionals and employees. Its findings? “Hybrid workers have higher degrees of satisfaction and productivity than fully on-site [workers],” a PWC partner and workforce transformation leader, Anthony Abbatiello, summarized to Business Insider in September.

Quoting the PwC report, “The idea that being on-site all day every day is necessary to establish and sustain a strong culture is a myth. Don’t be afraid to offer flexible options for fear of diminishing it.”  

In defense of UVA Health’s leaders

Like so many people, I was surprised and shocked to read the U.Va. faculty letter of no confidence in Dr. Craig Kent and Dr. Melina Kibbe. This is especially disturbing since I have served on various UVA Health boards over the past 30 years. It is my opinion that our health system is better today than it has been at any time over that period. And it is evolving into one of the truly top health systems in the nation. Drs. Kent and Kibbe must be given an enormous amount of credit for this accomplishment.

In full disclosure, I am not writing this letter as a member of the UVA Health System Board. I am writing it as a friend of the University of Virginia who believes that there is another side to this story which needs to be understood.

There are two aspects of this letter which need to be addressed. First, it comes from 128 people. Our health system has 18,000 employees. Therefore, the writers represent less than 1/10 of 1% of our employees. And, based on an outpouring of emails to President Ryan, the UVA Health System Board and the Board of Visitors, the allegations of these anonymous writers do not reflect the opinions of a broad cross section of our faculty and staff. Instead, they express widespread support for Drs. Kent and Kibbe.

Second, facts made by these anonymous writers are simply not true.

  • They speak of safety issues. UVA Health has recently received A ratings in safety audits for its four hospitals. Our Vizient mortality ratios are at an all-time low suggesting we are saving 2-3 out of 10 patients that were otherwise not expected to live.
  • As to an exodus of faculty talent, this allegation can be disputed by Drs. Kent and Kibbe’s successful recruitment of outstanding faculty from some of the nation’s top academic medical centers. If our work environment were so toxic, these people would not have joined our faculty. Furthermore, the data does not support this claim. UVA Health has a 5.1% turnover rate as compared with the national average of 8.3%. Also, I should add that Forbes magazine recently rated UVA Health as one of the nation’s top employers.
  • As to attacking the values of the University of Virginia, I find these allegations to be totally erroneous. Drs. Kent and Kibbe have made building a strong organizational culture a cornerstone of UVA Health’s new 10-year strategic plan. From what I hear from a cross-section of employees in our health system, the culture has improved dramatically over the past few years.
  • The assertion that there is excessive spending on C-suite executives is naive. It is true that new senior-level staff have been hired. However, most of it has been to prepare UVA Health for an even stronger future. Dr. Kent hired an outstanding chief strategy officer to lead our first-ever enterprise-wide strategic plan. Prior to this, we were possibly the only major academic medical center that did not have such a critically important internal function. Instead, we relied on expensive outside consultants. We added staff to create our first ever UVA Health Leadership Institute.  This is another investment in our future.  It will provide us with a tremendous pipeline of outstanding future leaders.  And as an occasional lecturer in the program, I can attest that it has been a tremendous morale boost for our participants.
  • Other allegations in this letter are vehemently denied by the large number of UVA Health System employees who are emailing us in support of Drs. Kent and Kibbe.
Dr. Craig Kent

Although not addressed by the anonymous writers, Drs. Kent and Kibbe have been extraordinarily successful in raising financial support. The School of Medicine has attracted a record amount of research funding. This research is an investment in the future of health outcomes. For example, the Paul and Diane Manning Institute of Biotechnology could be a game-changer for not only our community but for the world.

There is another important consideration which is overlooked in this letter. UVA Health is one of only a handful of health systems in the nation which maintained profitability throughout the pandemic. This is a major management accomplishment for which Dr. Kent must be commended. Had we not maintained profitability, our ability to fund construction and acquisitions could have been handicapped. This would have become an impediment to our ability to provide world-class healthcare to our service areas.

Finally, I have a serious philosophical concern about these anonymous writers.  The Hippocratic Oath is an oath of ethics historically taken by physicians. Often attributed to it is the phrase “First do no harm.”  These anonymous writers are doing harm to UVA Health and, in turn, to our patients. If a small cabal of people hiding behind anonymity can force outstanding leaders out of U.Va., it will make it extremely difficult to recruit outstanding new physicians, nurses, technicians, and administrators. It will make it extremely difficult to attract important strategic alliances. And it will make it extremely difficult to raise needed philanthropic support. If these things happen, the quality of health care in our community will be harmed. To me, those who inflict harm to the patients of UVA Health may be violating the Hippocratic Oath.

William G. Crutchfield Jr.
Health Services Foundation Board, 1993-1997; U.Va. Board of Visitors, 1997-2005; UVA Health System Board, 2018-present.

Crutchfield is the founder and CEO of Charlottesville’s Crutchfield Corp. He is a U.Va. graduate and a member of the Consumer Electronics Hall of Fame.

A BridgeTower to the future

On July 31, Virginia Business turned the page on a new chapter in our 38-year history as the magazine became part of the BridgeTower Media family of companies.

Headquartered in neighboring North Carolina, our new parent company is a portfolio company of Los Angeles private equity firm Transom Capital Group. BridgeTower owns 40-plus B2B media and research brands, including Virginia Lawyers Weekly and Best Companies Group, our partner for the annual Best Places to Work in Virginia awards program.

“It’s great to be able to add the core business audience in the nation’s best state for business to our growing portfolio,” BridgeTower Media President and CEO Hal Cohen said in a statement announcing the acquisition. “We see an opportunity to accelerate the growth of Virginia Business — and of business in Virginia — by leveraging the power of BridgeTower Media’s audience platform and best-in-class capabilities. We look forward to delivering even more value to readers and advertisers in the years ahead.”

Virginia Business’ former owner and publisher, Bernie Niemeier, sold the magazine to BridgeTower, taking a well-earned retirement following a business career that spanned six decades. Previously an executive for Media General, the now-defunct media company that founded Virginia Business in 1986 as the Old Dominion’s only statewide business publication, Bernie became the magazine’s publisher in 2007, purchased the business from Media General in 2009 and became its sole owner in 2017.

A 2018 Virginia Communications Hall of Fame inductee, Bernie was a well-known mainstay of the state’s business community and frequently could be seen representing the magazine at events across the commonwealth. During his 17-year tenure as Virginia Business’s publisher, the magazine introduced annual products like our Big Book issue and the Maritime Guide.

In a statement about the sale, Bernie said, “Hal and the BridgeTower Media team demonstrate again and again that they know exactly how to help media properties thrive in today’s digital world. I made this decision thoughtfully, and I know my team is in good hands. I look forward to seeing Virginia Business grow even further as it continues to serve the nation’s best state for business.”

As for what this all means for you, our readers, in the coming weeks you’ll see a revamped Virginia Business website and newly redesigned newsletters. Next year, we’ll begin launching new events and awards programs, while maintaining popular ones like Women in Leadership, Virginia’s Top Doctors and Best Places to Work. For our advertisers, we will be offering new opportunities to better help you reach your customers, and we’ll also be able to leverage BridgeTower’s national family of publications so you can put your message in front of far larger audiences.

And of course we will continue to deliver compelling, timely and informative coverage of Virginia’s business community to you through our daily news website, our monthly issues and annual special publications like the Virginia 500.

* * * *

Speaking of the Virginia 500, polybagged with this issue you’ll find the fifth annual edition of this annual special publication featuring our exclusive list of Virginia’s top 500 leaders in business, higher education, nonprofits, government and politics.

Divided into 21 categories, including a Living Legends section recognizing lifetime achievement, this year’s Virginia 500 features a new breakout section for the insurance industry, which has been separated from banking and finance.

Starting with the first edition in 2020, the Virginia 500 instantly became our most popular product with readers and advertisers in the magazine’s history.

With a word count roughly equal to four of our regular monthly issues, the Virginia 500 is a labor of love — emphasis on labor — for our editorial staff. We began work in earnest on the 500 in April, and five months later, through the hard work of a team of 16 writers and editors plus production staff, it’s now available on your device screens and in your mailbox.

Take your time to browse through our fascinating mini profiles of Virginia’s 500 most powerful and successful executives. We’re confident that you’ll come away not only with some useful business intelligence, but with a far better sense of the movers and shakers behind Virginia’s top industries.

Beauty and the C-suite

Virginia Business’ July issue cover art represents a significant amount of time and thoughtful planning — especially in considering what image we want to convey to you, the reader.

From our viewpoint, the Women in Leadership cover should express strength and confidence — attributes that this year’s 38 award winners demonstrate daily as executives. A still photograph, of course, must achieve this without words, so we have to consider facial expressions, body language and wardrobe.

Work should be different, though, because in our jobs we should be judged solely on our merits. Unfortunately, life doesn’t usually work this way, and many women are judged on their looks, even when we’re unconscious of such bias.

Most women can probably point to a time when “pretty privilege” either penalized or benefited them, but let’s focus on women in high positions at work. They’re expected to look powerful and serious, as well as approachable and attractive in a traditional sense. But not too attractive, because that’s distracting. This cliche even applies to women in the C-suite and those who aspire to it, and it costs time and money.

If you picture an average CEO, chances are you’re thinking of a white man of a certain age. He may have gray or thinning hair and a few wrinkles. He’s not young, and no one expects him to look particularly young.

But women — including CEOs and presidents — often feel pressure to pay for expensive hair treatments, skin care regimens and other beauty treatments to diminish signs of aging. What’s more, they aren’t aiming to look like J.Lo at age 54; that’s just to achieve normal “maintenance.” 

Although conventionally attractive men and women outearn their peers by about 20%, according to a 2016 study by sociologists Jaclyn S. Wong and Andrew M. Penner, women considered attractive spend more money on grooming products than attractive men do, the study found.

On average, U.S. women spend $877 per year on their looks — including hair products, skin care, makeup and manicures — compared with men’s average spending of $592 a year, according to an Advanced Dermatology study in 2023.

Anecdotally, we all know women who spend a lot more than $877 on beauty, adding Botox injections and anti-aging facial creams to their regimens. Black women, according to multiple studies, spend much more on hair treatments than most white women do.

I am not going to denigrate any woman who has treatments that make her feel good. But it is a problem when a woman is spending money on beauty because she’s worried about her job.

Plus, older age isn’t the only difficulty women encounter in the workplace. A 2023 survey of 913 women leaders conducted by Harvard Business Review found that many experienced ageism throughout their careers. Dubbed the “never-right” age bias, women under 40 are often deemed underqualified for executive roles, and older women sometimes get tagged with perceptions of being out of date or overly strident. Middle-aged women get skipped over for promotions because hiring authorities assume they have too many family responsibilities to contribute fully at work.

Looks play into these stereotypes, too. If a woman looks younger than she is, she may be treated like an inexperienced girl, and what about a woman who wants to grow out her gray hair and forgo expensive coloring treatments every eight weeks? There’s a reason many women ages 50 and older talk about feeling invisible as they age, and that certainly extends to the workplace.

Nearly everyone says they want to be judged on their abilities versus what they look like. So, let’s get a move on.   

Pivot points

Earlier this year, when I was invited to speak to a Henrico County Rotary chapter, I was asked several questions commonly heard these days by journalists.

Do sources pay us to appear in our magazine stories? No. As an independent media outlet, we are not pay-to-play; we decide who and what we write about and who we interview. Advertising does not impact our editorial decisions, and ad sales are handled by a separate department.

What happens if we print something wrong in one of our stories? We will immediately correct the online version of the story, and we will run a correction in the next issue of the print magazine. If it’s a significant error, we will also add an editor’s note online.

How do you decide on the angle of a story? This question is a bit more complex to answer. In an age of biased 24-hour cable news channels and social media, it’s understandable that some people might think we plan every story with an ulterior, politicized point of view. However, though it might seem surprising or even quaint, that’s not how we — and most local and regional news outlets — go about our business.

Our story planning typically starts with a combination of staff research and talking with sources. We often start out wanting to write about a particular industry, such as health care or real estate, so we look for information about that industry’s latest trends, or recent related studies or news stories.

For instance, in this issue, we have a story about Charlottesville (The retail experience) that was based on a January city study showing declining retail storefront vacancies. We asked freelance writer Stephenie Overman to talk with local retailers and look into it. What she found generally confirmed what the city said — retailers there are mostly enjoying a post-pandemic bump.

But what happens when the reality is different from what we hypothesized? What about when we uncover new information that may change a story’s direction?

The answer is simple: We report what’s there and follow wherever the story may take us.

A case in point is this issue’s story about the University of Virginia (Grounds for dissent?) by Deputy Editor Kate Andrews. We started out seeing a potential story in a confluence of reports that pointed to a larger battle over the meaning of free speech as well as the political soul and direction of Mr. Jefferson’s university, particularly regarding U.Va.’s diversity, equity and inclusion initiatives. This seemed particularly timely, given that Gov. Glenn Youngkin’s appointees are poised to make up a majority of U.Va.’s board of visitors as of July.

Youngkin and his board appointees have taken active stances at Virginia Commonwealth University and George Mason University, where Youngkin’s administration asked to review syllabuses for diversity courses at the universities, and board members voted down efforts to make the courses required. A Youngkin U.Va. board appointee, Bert Ellis, co-founded a conservative alumni organization that has been critical of university diversity policies.

As Andrews undertook the reporting for the story, however, it became clear that, while those elements were present and are mentioned in her final story, an even more timely and pressing story was to be found in how U.Va. is dealing with student protesters of the Israeli war on Hamas in Gaza and accusations of on-campus antisemitism, so she pivoted to report on that. A debate that’s taking over campuses around the nations, it has resulted in the resignations of the presidents of Harvard University and the University of Pennsylvania and is shaping up to be a critical factor in this year’s presidential race.

And speaking of pivoting, polybagged with this issue readers will find the second edition of StartVirginia, an annual publication devoted to the entrepreneurial ecosystem. This year’s issue, shepherded by Associate Editor Robyn Sidersky, is bigger and better than its predecessor, with new charts and lists and more stories than last year. If you’re an entrepreneur or thinking of starting a business, it’s a must-read. 

Flying off the glass cliff?

You’ve no doubt heard of the glass ceiling — the barrier above which women couldn’t rise professionally — but have you heard about the glass cliff?

It’s not as familiar a term as the ceiling, but the glass cliff is real. It’s what happens when a woman or someone from another marginalized group is put in charge of a failing institution.

This can serve a couple of purposes: The corporation can claim its first hire to a top position of a person representing X group, staving off negative headlines a little longer. Also, if the company is truly at the edge of a financial cliff, the stakes are lower than if the leader could actually do something to turn around the company’s fortunes. Maybe the new leader is just a convenient scapegoat.

It isn’t always evident what’s a glass cliff and what isn’t until later on.

Take Arlington County-based Boeing, for example. Ever since a Boeing 737 Jet experienced a midair panel blowout while filled with Alaska Airlines passengers in early January, the aerospace company has come under considerable federal scrutiny over its safety and manufacturing practices. The Justice Department opened a criminal investigation, and the FBI wrote letters to passengers telling them that they may be victims of a crime.

In April came the corporate fallout: Boeing CEO Dave Calhoun announced he was stepping down by the end of this year, and Stan Deal, head of the Boeing Commercial Airplanes business unit, retired effective immediately. 

Now Stephanie Pope, Boeing’s chief operating officer, has also been put in charge of the commercial planes unit — “the toughest job at Boeing,” according to The Wall Street Journal. 

This may not be a glass cliff situation. This could be Pope’s proving ground. We just don’t know yet. 

A third-generation aerospace employee, Pope led Boeing’s parts and services business  and also held several finance positions. After her promotion to COO, she was seen as a probable successor to Calhoun, but GE Aerospace CEO Larry Culp and Carrier Global CEO Dave Gitlin are now favored for Boeing’s CEO, Fortune reported in April.

If hired as CEO, Pope would be the century-old Fortune 500 company’s first woman leader. Boeing’s not exactly a pioneer in terms of hiring female aerospace CEOs — in Virginia alone, we have General Dynamics Chairman and CEO Phebe N. Novakovic and Northrop Grumman Chairman, President and CEO Kathy Warden.

But Boeing never hired a woman to lead its company in good times or even less-bad times.

Now it’s in real trouble. In the first quarter of the year, Boeing delivered 83 jets, down from 157 in the previous quarter, and United told Boeing to halt production of the 737 Max 10 jets it ordered. Sales ground to a halt in January, with only three plane orders, and are still down.

Pope, in her new capacity, wrote in an email to employees last month, “This is a pivotal moment for us, and we have serious work ahead to build trust and improve our operations.”

And who’s in charge? Women.

Pope is joined by Katie Ringgold, who previously led 737 airplane deliveries at Boeing, as new head of the Max program, and Elizabeth Lund has been promoted to senior vice president of quality for Boeing Commercial Airplanes.

They’re tasked with fixing the reputation of Boeing, starting with bringing quality control measures up to standard, most experts acknowledge. These are lessons earlier leaders didn’t learn after two Max 8 planes crashed in 2018 and 2019 incidents, claiming hundreds of lives.

Boeing stopped production of the jets and then resumed in late 2020, but C-suite leaders demanded more jets produced faster, according to a March 28 New York Times article based on interviews with more than two dozen current and former Boeing employees.

We can’t say this is a glass cliff yet. Maybe Pope and company will succeed where others (mainly men) have failed. But it’s not a job most people would want, unless they’re promised golden parachutes.

Which way the Venn blows

It feels like one of those logic puzzles high school students grapple with on the SAT: If Delegate Sally passes a law to require utilities in her state to generate all their electricity from renewable, carbon-free energy sources like wind and solar by 2045, what is the latest year CEO Tom’s power plant can stop running on natural gas?

Like many things in life, business and especially government, the answer to this question is hardly clear-cut. It lies somewhere within the intersection of the Venn diagram formed by the overlap of Virginia’s fast-growing energy and data centers industries — topics well covered by two of our feature stories in this month’s issue.

As reported by contributing writer Stephenie Overman in her April story, “Natural selection,” the state’s primary electric utility, Dominion Energy, is seeking to build a $600 million-plus, 1,000-megawatt natural gas power plant in Chesterfield County even though it’s under a state mandate from the Virginia Clean Economy Act to eliminate fossil fuels as an energy source by 2045.

This comes amid a tidal wave of data center development in the commonwealth that has sparked pushback from some local politicians, state legislators and citizens’ groups, reports contributor Elizabeth Cooper in her story, “Digital Divide.”

Between 2011 and 2020, Amazon Web Services alone spent $35 billion building data centers in Virginia, a figure the company plans to double by 2040. And recent rapid advancements in artificial intelligence are expected to grow demand for data centers even more. By some estimates, these electricity-chomping facilities, which support modern staples of life like streaming entertainment media, cloud computing and videoconferencing, could quadruple their power usage by 2038, accounting for about half the state’s electricity use.

Meanwhile, the automotive industry is also trying to boost adoption of electric vehicles instead of gas-burning cars, putting more strain on the grid. (A California government study estimated that by 2035 EVs could siphon 10% of that state’s electricity during peak periods.) And of course, people are cranking up their AC amid record hot summers caused by climate change.

A group of nine Democratic Central Virginia state legislators who put out a statement in March opposing the proposed Chesterfield natural gas power plant noted that Dominion notified the State Corporation Commission last year that the utility expects its carbon emissions will increase to as much as 43.8 million metric tons by 2048 — more than twice its emissions as of 2021. Needless to say, that’s not the trend the legislature had in mind when it passed its carbon-free power mandate.

For its part, though, Dominion has said that it’s trying to meet the 2045 deadline through massive investments in solar farms and the $9.8 billion offshore wind farm it’s developing off the Virginia Beach coast. But it also says that current technological limits on battery storage of renewable energy may mean that natural gas has to remain in the power generation mix past 2045 to ensure grid stability. Dominion is also considering other potential carbon-free solutions such as small modular nuclear reactors, but those are still very much experimental, with none yet operating outside of Russia and China.

Virginia is hardly alone in facing this power conundrum. Just in the Southeast U.S., utilities are proposing about 33,000 megawatts of new natural gas projects, according to the Southern Environmental Law Center. One of its senior attorneys noted to The New York Times in March that this is “completely at odds” with cutting carbon emissions to stem climate change.

It’s not clear what the solution is, but the answer will need to be found at the intersection of science, industry and government. And quickly.  

To support a more inclusive workforce, Va. lawmakers must unite around this bill

Virginia’s worker shortage is one of the commonwealth’s biggest barriers to economic growth and prosperity: According to data from the U.S. Chamber of Commerce, there are just 60 available workers for every 100 open jobs statewide. But Virginia’s talent-starved labor market is hardly unique. Nationally, there are seven workers for every 10 available jobs. The mismatch between available roles and work-capable individuals has been exacerbated by a 15-year decline in civilian labor force participation.

Against this backdrop, lawmakers on both sides of the aisle have a rare opportunity to forge political consensus by uniting around a bipartisan proposal that creates pathways to long-term employment for individuals without a college degree.

Earlier this month, the Virginia House of Delegates unanimously passed HB 680 to codify these skills-based hiring reforms. But this week, Democrats on the Senate Finance Committee tabled this bill indefinitely despite strong national bipartisan support for skills-based hiring. Senate Democrats owe Virginians — especially those locked out of meaningful work because they lack a college degree — an explanation for why this issue suddenly became so polarized and partisan.

The proposal follows a sweeping executive action by Gov. Glenn Youngkin last spring, which directed state agencies to remove unnecessary college degree requirements from job postings. The move sent a powerful message that individuals’ specific skills, experience, and motivation to work matter more than a four-year degree loosely tied to the job market.

It’s emblematic of a broader conversation occurring in statehouses and corporate board rooms across the country about a shift to a “skills-first” economy where hiring decisions are based not on educational pedigree, but real-world measures of skill and competency. Employers have historically relied on four-year degrees as a proxy for talent and fit — an approach that disadvantages a vast segment of the American population who do not have a traditional college degree.

Nationally, 70 million workers are STARs — an industry term coined by Opportunity@Work, an organization led by former Obama White House economic policy advisor Byron Auguste — meaning “skilled through alternative routes” such as community college, military service or on-the-job training but lack a four-year degree. The 3.8 million STARs in Virginia represent 47% of the state’s workforce.

To tap into this pool of skilled workers, state governments are leading the way in rethinking the connection between postsecondary education and employment. To date, at least 16 states have taken steps to eliminate bachelor’s degree requirements for substantial portions of government jobs.

A growing number of private sector companies are beginning to use skills and experience instead of degrees to screen applicants for middle-skill roles. In neighboring Maryland, for instance, Lockheed Martin pledged to create 8,000 new apprentice opportunities in five years through internships for high school students and training programs for new and mid-career employees. The company met its goal in just four years.

For Virginia, a shift to skills-based hiring could unleash the vast potential of millions of Virginians with some training beyond high school, but no degree. Just 44.3% of Virginians between ages 25 and 64 hold a bachelor’s degree or higher. For every 1,000 undergraduates currently enrolled in Virginia’s colleges and universities, more than 2,100 state residents attended college but did not complete it.

Perpetuating the privileged status for degrees in the hiring process for jobs is bad labor, economic and social policy. Millions of work-capable Virginians are underemployed or on the sidelines because of inflated job requirements. This results in lower wages, lower tax revenues and increased reliance on safety net programs. More importantly, it limits their ability to create value for themselves and society.

We can do better, and Virginia should embrace this shift to a talent economy that recognizes every individual’s ability and desire to contribute. First, lawmakers should remove unnecessary degree requirements for state jobs. The solution is simple: HB 680 would codify skills-based hiring policies and practices for state jobs into law.

Second, workers and learners need access to short-term alternative paths to attain the skills that align with labor-market demand. Last year, in a bipartisan move, Virginia lawmakers overhauled workforce training to improve program delivery and outcomes for learners, workers, and employers.

Third, lawmakers should change state funding formulas to level the playing field and enable residents to access state dollars to pursue any program that leads to demonstrable job placement or wage gains — not just a traditional four-year degree program.

Finally, Virginia should overhaul the barriers within our welfare-to-work system that disincentivize underemployed or unemployed Virginians from pursuing work or earning a higher wage. A major obstacle is the phenomenon known as the “benefits cliff” that occurs when a slight increase in earnings abruptly disqualifies an individual or family from receiving needed benefits for food, housing, child care or medical care.

Workforce inclusion and economic growth are two sides of the same coin. To maintain Virginia’s economic vitality, lawmakers in Richmond should unite around these common-sense — and long-overdue — shifts in policy. The commonwealth can unlock the full potential of its workforce — and advance equality of opportunity for more of its residents. But doing so requires that we reconsider our outdated assumptions about the value of a college degree and expand opportunity to every Virginian with the skill and motivation to contribute.

Steven Taylor is director and senior fellow for education and workforce at Stand Together Trust, an Arlington-based nonprofit organization founded by Kansas billionaire Charles Koch that focuses on education and policy initiatives. He was previously founder and CEO of ED2WORK, a national advocacy, research and strategy firm.
Jonathan Wolfson is based in the Richmond area and is chief legal officer and policy director of the Cicero Institute, a Texas-based public policy organization started by tech entrepreneur and investor Joe Lonsdale. Wolfson served as the U.S. Department of Labor’s deputy assistant secretary for policy during the Trump administration and was a litigator and adviser with McGuireWoods from 2012 to 2019. 

How’s your confidence?

Business always has its up and downs. We’ve all been through more than a few. As au courant as the dot-com economy might seem, that bubble floated skyward decades ago, bursting in 2002. It wasn’t just a small dip. Between 1995 and its peak in March 2000, the tech stock-heavy Nasdaq index rose by 800%, only to fall by 78% from its composite total by October 2022. Many companies that were household names disappeared. The dot-com bust was further compounded by the 9/11 attacks.

Then, in late 2007, the subprime mortgage crisis collapsed the U.S. housing market, resulting in the Great Recession. Falling real estate asset values contributed to a global financial crisis. Strong fiscal stimulus was required. Industry bailouts, near-zero interest rates and government spending reached unprecedented levels. As a result, the economy was restored to a growth trajectory for the next decade.

In March 2020 came the COVID-19 pandemic and more unprecedented fiscal stimulus. Borrowers are likely to be more comfortable than lenders with near-zero interest rates, but most everyone should be at least a little nervous about industry bailouts and deficit spending.

On the other hand, what were the alternatives? Let’s face it, business failures and massive unemployment just aren’t that attractive. While recessionary data points are unquestionably a bit dark, equally important are what happens leading up to and in between recessions.

Prior to the dot-com bust, the 1990s were the longest growth period in U.S. history. After Sept. 11, 2001, the economy expanded for more than six years, and following the subprime mortgage crisis, our economy expanded for 10 more years. After the steep declines of the pandemic through early 2021, growth returned on an unprecedented basis, with the U.S. leading the world economy.

Macroeconomics are important, but U.S. and global metrics don’t necessarily tell the story of an individual local business. Beyond the data, anecdotal information is important. Consumer sentiment and business confidence do more to drive politics and market prices than any objective set of economic facts.

During the second half of last year, I had many conversations with business leaders and salespeople who expressed worries about inflation, recession and declining consumer confidence in 2024. So far, those concerns appear to have been unfounded.

U.S. gross domestic product increased at significantly higher rates during the last half of 2023, increasing at a 3.3% annualized rate in the fourth quarter. Inflation concerns heated up last summer but cooled by year-end. In January, the U.S. consumer price index stood at 3.1%, higher than the Federal Reserve’s inflation target of 2% but a step down from January 2023’s 3.4% rate and way down from 7% in January 2021.

Meanwhile, the U.S. unemployment rate is currently 3.7%, well below the long-term average of 5.7% since 1948, and Virginia’s unemployment rate is 3%. The commonwealth’s long-term average of 4.57% is a full point below the national average.

Fortunately, as if all our children are smarter, taller and maybe just a little closer to the perennially open spending spigots of Dee Cee, Virginia always trends toward above-average numbers.

While I always would personally rather give peace a chance, it doesn’t hurt the commonwealth’s economy to have two hot wars in Ukraine and Gaza calling upon the military-technology complex of Northern Virginia and Hampton Roads to supply their needs.

So, how’s your confidence? I’m admittedly a glass-half-full kind of guy, and expecting the worst rarely leads to the best. Rather than anticipating recessions, let’s look at the time periods between them. Based on that analysis, we are still in the early years of what should be a significant period of growth and expansion.

Let the good times roll.  

Why Alexandria’s new entertainment district is everyone’s business

As lawmakers negotiate the future of a $2 billion deal to build a new entertainment district in Alexandria, leaders across public and private sectors in the D.C.-Maryland-Virginia region are weighing the potential benefits. Without discounting concerns of local residents, I would like to present how this entertainment district will help Northern Virginia’s future growth and economic security and deliver benefits for the entire commonwealth.

To say that a new Potomac Yard Entertainment District is a “big deal” is a gross understatement. While some Northern Virginia residents and officials have chosen to focus more on discrete aspects of the project — from the fate of a Target store to transportation needs — we should instead look at it from its big picture advantages.

Northern Virginia Chamber of Commerce President and CEO Julie Coons. Photo courtesy Northern Virginia Chamber of Commerce
Northern Virginia Chamber of Commerce President and CEO Julie Coons. Photo courtesy Northern Virginia Chamber of Commerce

First, consider the sheer scale of our economy’s trajectory: Northern Virginia’s annual GDP now rivals that of entire countries like Finland, Portugal and New Zealand. At the heart of that success lies a dynamic business environment that is as diverse as our communities. It’s why many of the world’s leading corporations have made our region their home. They see its advantages today and have claimed its future potential on behalf of their businesses and employees.

If we view the proposed entertainment district in the same light as other recent initiatives such as Amazon’s HQ2 and Virginia Tech’s Innovation Campus, it’s clear that we aren’t just talking about a building or graduate school or a sports arena. These major projects play an important role of generating and driving investments in shared benefits: improved infrastructure, an increase in regional quality education, and expansion of significant job opportunities. As the leader of Greater Washington’s largest chamber of commerce, I welcome the continued growth that this proposed public-private partnership will bring to all who work and live in Greater Washington.

An important contribution beyond the proposed entertainment district’s new retail and restaurant spaces is the tremendous tax revenue generated by the project. This revenue will fund critical transportation, housing and education improvements. While some of us may not choose to attend Capitals or Wizards games, it’s important to note that we will all reap the benefits of this new district.

Yes, the sports and entertainment are exciting, but the real value to the region and its citizens is securing these fundamental and needed investments. This project is not a one-and-done. It’s an ongoing opportunity to create greater growth on a scale that creates greater opportunity over time for every resident and business within our region.

Furthermore, if you, like me, care about the future of our workforce and economic prosperity in our region, I encourage you to explore the deal’s finer points. You may be pleasantly surprised at how these details reveal the proposed project’s many advantages. However, I understand that like any successful enterprise, this project will require thoughtful input and productive debate from all stakeholders — especially local residents — at every stage.

Beyond the glitz and excitement of the sports arena, the proposed entertainment district will be a boon to Northern Virginia, its residents and all of the commonwealth. I urge you to examine the bigger impact of this project. These details are everyone’s business, and we all stand to gain from the broad benefits and opportunities this monumental development will deliver.

Julie Coons has served as president and CEO of the Northern Virginia Chamber of Commerce since 2018. She previously served as chief operating officer of the Council of Better Business Bureaus and is an active member of numerous boards and organizations including Junior Achievement of Greater Washington, The Economic Club of Washington, D.C., the U.S. Chamber of Commerce’s Association Committee of 100, and the Association of Chamber of Commerce Executives.