Pandemic brings end to decade of job gains

The public health crisis brought an unanticipated end to 11 straight quarters of economic growth and nearly a decade of job gains in Virginia, according to Old Dominion University’s 2020 State of the Commonwealth Report, released on Dec. 20 by ODU’s Dragas Center for Economic Analysis and Policy.

“The COVID-19 pandemic has dramatically affected how Virginians live and work,” Dragas Center Director Robert M. McNab said in a statement. “While Virginia has, comparatively, fared better than many other states, unemployment is higher, food security is lower and Virginians are left to ponder the question of when life will return to some semblance of normality.”

Last year, prior to the pandemic, ODU’s 2019 State of the Commonwealth Report predicted a sixth straight year of economic growth, low unemployment and income increases. Instead, real gross domestic product (GDP) shrank by 27% during the second quarter of 2020, and 2021’s recovery pace depends on how quickly vaccines can be deployed. 

Entering 2020, Virginia’s unemployment rate was below 3%, according to the report, while the most recent unemployment rate in Virginia is 4.9%. And while Virginia added approximately 502,000 jobs from February 2010 to February 2020, this year saw 438,000 workers temporarily furloughed or permanently laid off by April 2020, according to the report.

“Looking back on these times is an exercise fraught with nostalgia,” according to the report. “We now live in a world where our temperatures are checked, questions about our health are asked and exposure to the coronavirus means, at a minimum, a two-week quarantine.”

Survey data compiled by the Dragas Center showed that by the end of November, one in nine Virginia businesses had decreased its number of paid employees.

“From the peak of February 2020 to April 2020, the size of Virginia’s civilian labor force fell by 3.3%,” according to the report. “Over the same period, individual employment declined by 11.8%, or approximately 513,385 people. In the span of two months, one in nine Virginians moved from gainful employment to a temporary furlough or, in some cases, a permanent layoff.”

The report suggests that a possible explanation for the dramatic decline in the civilian labor force is attributable to the impact of COVID-19 on child care and primary education. Reports sources suggest that keeping schools closed could affect up to 50 million workers and could encroach on 15% of annual GDP.

ODU’s report also focused on the disproportionate impact that the pandemic has had on minority communities and particularly African American communities. African Americans comprised more than 39% of continued unemployment claims in October. And as of Nov. 28, African Americans accounted for 27% of COVID-19 deaths in Virginia, despite comprising only about 19% of the state’s population, according to the U.S. Centers for Disease Control and Prevention.

“If anything, the pandemic has thrown the fractures of our society into sharp relief,” McNab said in a statement.

The Dragas Center has produced the State of the Commonwealth Report since 2014.

Subscribe to Virginia Business.

Get our daily e-newsletter.