Harrisonburg-based organicpoultry producer Farmer Focus announced leadership changes Tuesday, including tapping a new president and chief operating officer as well as a new chief commercial officer.
Stephen J. Shepard is the company’s new president and COO, a promotion from executive vice president of operations, a position he has held since April. In his new role, he will focus on increasing production capacity while reducing the company’s greenhouse gas footprint and championing environmental sustainability, according to a news release from Farmer Focus. He replaces Erik Vaughan, who had been president and COO since 2017.
Kathryn Tuttle Photo courtesy Farmer Focus
Kathryn Tuttle has been promoted from chief marketing officer, the position she’d held since 2020, to the newly created position of chief commercial officer. In her expanded role, she will oversee sales, marketing and new product innovation.
“The promotion of Stephen and Kathryn furthers our mission to promote and protect generational farming while prioritizing animal welfare and growing the organic category as a whole,” Farmer Focus Founding Farmer and CEOCorwin Heatwole said in a statement. “We are excited to continue developing our team, and leveraging their experience to grow our business and network of family farmers.”
Founded in 2014 and formerly known as Shenandoah Valley Organic, Farmer Focus sells organic poultry raised as free-ranging on humane-certified farms. It has partnered with 78 independent chicken farmers and has more than 130 on its waiting list. In February, Farmer Focus opened a 78,000-square-foot packaging facility in Harrisonburg, which increased production capacity and expanded Farmer Focus’ 700-person-plus workforce.
The organic chicken producer has expanded its product line into Publix Super Markets Inc. and now has a partnership with Safeway Inc. in the mid-Atlantic region, according to a news release. It added 750 retail locations in the fourth quarter of 2022, making its chicken available in more than 3,100 stores throughout the East Coast and Midwest.
In September 2021, Farmer Focus hired a new chief financial officer and a research and development head.
Virginia has been approved for as much as $230.4 million in federal funds to accelerate startups, the U.S. Department of Treasury announced Tuesday.
The money comes from the Treasury’s State Small Business Credit Initiative (SSBCI). Virginia will operate five programs, including two loan participation, one loan guarantee and two equity/venture capital programs. Loan programs include $57 million for small businesses and $173.4 million was allocated for equity/venture capital programs.
The credit lending and early-stage equity financing programs will provide Virginia businesses with increased access to public and private capital, especially around underrepresented communities and entrepreneurs, Gov. Glenn Youngkin said in a news release.
“Startups and small businesses are critical to our future and job creation. This initiative will expand our existing funding programs for companies with high potential for rapid growth and significant economic development,” Youngkin said. “We must have an economy that encourages innovation and entrepreneurship across the commonwealth because new businesses create opportunities that lift up all Virginians.”
The funding is expected to spark up to 10 times the private investment for every $1 of SSBCI capital spent, according to Youngkin’s office. The Virginia Small Business Financing Authority (VSBFA) will expand credit support and technical assistance to small businesses through the SSBCI program. The Virginia Innovation Partnership Corp. will co-invest equity alongside matching private capital in Virginia startups while exploring opportunities and supporting organizations within Virginia’s entrepreneurial ecosystem. The aggregate SSBCI funds will be disbursed in three separate tranches based on the achievement of specific criteria objectives.
About $57 million of the SSBCI funding will be allocated to VSBFA, the state’s business and economic development financing arm, and is aligned within Virginia’s Department of Small Business and Supplier Diversity, which provides loans to Virginia businesses for economic growth and expansion.
“The technical assistance program included in the SSBCI will benefit very small businesses, which have 10 employees or less, and those that are owned and controlled by socially and economically disadvantaged individuals,” VDSBSD Director Willis Morris said in a statement.“These companies often have difficulty securing the funding that is needed to grow their enterprises. We are committed to doing our best to empower the opportunities that very small startups need.”
The remaining $173 million will be allocated to VIPC, the operations arm of the Virginia Innovation Partnership Authority. VIPC will use the money to expand its current seed and early-stage direct co-investment program for Virginia-based technology startups, which is managed through VIPC’s Virginia Venture Partners division. VVP will also initiate a new indirect investment program through SSBCI funding that enables limited partner capital commitments to emerging and established seed investment funds in order to further support startup growth and stimulate risk capital infrastructure within Virginia’s entrepreneurial ecosystems.
“The SSBCI funding will enable VIPC to increase its support for the vibrant entrepreneur community that exists across Virginia,” VIPA Board Chair Barbara Boyan said in a statement. “VIPC is there at every step of the commercialization process, from business validation to revenue generation, which helps entrepreneurs build financially viable and stable companies.”
Reston-based Bechtel Corp. has been selected to design and build the first phase of Intel Corp.’s $20 billion semiconductor manufacturing facility near Columbus, Ohio, a project that will include as much steel as eight Eiffel Towers.
The work will include a total 2.5 million square feet, 600,000 square feet of which will be cleanrooms, according to a Nov. 28 announcement from the global engineering and construction company.
“Bechtel is proud to work with Intel and the people of Ohio to reclaim U.S. semiconductor manufacturing,” said Bechtel Manufacturing and Technology President Catherine Hunt Ryan in a statement. “A project of this complexity and magnitude — with an outsized impact on the community and economy — is the type of work Bechtel is uniquely positioned to deliver. We are honored to be chosen by Intel as its partner and we are ready to build their most advanced semiconductor facilities in the world.”
Intel announced in September that it would invest $20 billion to construct two chip factories in Licking County, Ohio, east of Columbus. The project represents the largest single private-sector investment in Ohio history. Bechtel will partner with the North America’s Building Trades Unions for the work, as well as with local educational organizations to develop training programs. The project is expected to create 3,000 Intel jobs and 7,000 construction jobs.
“Intel has chosen Bechtel to deliver our largest construction project to date, advancing our mission to create a more sustainable, resilient, and geographically balanced supply of silicon,” said Jackie Sturm, Intel’s corporate vice president of global supply chain operations. “Bechtel has decades of world-class expertise in complex global construction projects, leveraging a deeply experienced team, critical craft support and robust analytics platforms. Their relentless focus on safety, quality and innovation aligns with Intel key values. We look forward to building the future of U.S. semiconductor manufacturing together.”
Intel’s new facilities are expected to boost production for the chips, which have faced supply chain difficulties during the past two years. Intel’s announcement that it was picking the Ohio site follows passage of the federal $280 billion CHIPS and Science Act intended to ramp up semiconductor production in the U.S., as well as an executive order issued in August to kickstart a component of that bill that provides $52.7 billion for domestic semiconductor manufacturing and research.
Virginia leaders, including U.S. Sen. Mark Warner and state and local economic development officials, have said they want to make the state more attractive to chip manufacturers and the businesses that support them. However, Intel passed over Chesterfield County’s Upper Magnolia Green site in favor of the Ohio location. In October, Idaho-based Micron Technology Inc., which is expanding its Manassas facility as part of a $3 billion economic development deal that is among the largest in Virginia history, announced it would invest up to $100 billion to build a mega fabrication site in Central New York.
George Mason University has promoted Deb Dickenson to executive vice president for finance and administration, the university announced Monday.
Dickenson had been serving as interim senior vice president for administration and finance since June. In her new role, she will be responsible for universitywide leadership, strategic oversight and financial and operational management of the administrative and financial business units at the university. She will also collaborate with GMU’s board of visitors, office of the provost and academic and nonacademic leadership, as well as working with the university’s government relations team and elected and appointed leaders in Richmond.
“I’m so proud to be part of this community of Patriots making huge leaps forward for the university, our region and the commonwealth,” Dickenson said in a statement. “Alongside our outstanding leadership team, I will continue to work efficiently and effectively to increase support for Mason students, faculty and staff and ensure everyone has equal opportunity to thrive as part of a diverse and inclusive Mason Nation.”
Dickenson joined GMU in 2019 after 13 years at George Washington University. Before serving in her interim role, she served as vice president for finance. At GWU, she held roles such as assistant dean for finance, planning and fiscal operations and principal business officer.
Before she joined GWU, she served in senior financial positions at Marriott International Inc., Price Waterhouse LLP (now PricewaterhouseCoopers) and Arthur Anderson & Co. (now Accenture).
Tucker will report directly to Susan Gruber, the credit union’s president and CEO. In her new role, Tucker will support the credit union’s marketing, retail delivery strategy, loan servicing operations member service center and member experience departments, overseeing 158 employees.
Tucker has more than 20 years experience in the financial industry, managing loan and deposit operations, loan collections, mortgage, IT, HR, risk and compliance, marketing and branding, branch administration and branch sales development and service. She is also an experienced lender in retail, commercial and mortgage loans, according to a news release from the credit union.
Before joining U.Va. Community Credit Union, Tucker spent nearly two years as senior vice president of bank operations at MainStreet Bank, according to her LinkedIn.
“In addition to her vast experience as an innovative leader and adviser, what makes Belinda a particularly good fit for our credit union is our shared philosophy that working together strengthens the financial wellness of our members and local communities. She believes that being involved in her community is the most important thing she can do personally and professionally,” Gruber said in a statement.
Tucker has a bachelor’s degree in economics from George Mason University and a slew of industry certifications. In June, she completed her master of science degree in information technology.
She will relocate from Northern Virginia to the Charlottesville area.
Chantilly-based government contractor American Systems Corp. has received a contract from the Defense Information Systems Agency valued up to $1.01 billion for test, evaluation and certification services, the Pentagon announced Friday.
A minimum guarantee of $10,000 will be made through a task order that will be funded by fiscal 2023 research, development, test and evaluation appropriations. The contract’s ordering period runs from Dec. 2, 2022, to Dec. 1, 2026, with one five-year option and a one-year option through Dec. 1, 2023. The contract was made though the Defense Information Technology Contracting Organization at Scott Air Force Base, Illinois.
American Systems focuses on strategic solutions for national security programs. DISA provides IT and communications support to the executive branch, the military services and combatant commands.
“The board extends immense gratitude to Jim for his visionary leadership,” Akhil Jain, chair of CHKD‘s board of directors, said in a statement. “His tenure marked an era of critical expansion for the health system, improving access to pediatric services and aligning CHKD with major shifts in the delivery of health care.”
Amy Sampson, CHKD’s senior vice president and chief engagement and innovation officer, will succeed Dahling, who will retire in 2023, but a transition date has not yet been set.
The leadership structure of the health system will also change. Dr. Christopher Foley, vice president and chief of medicine, is being promoted to chief clinical operations officer, a new position that will replace the chief operating officer. Dahling, Sampson and Foley will work together over the next several months toward the transition.
Dahling came to CHKD in 1994 as vice president and chief operating officer and became president and CEO in 2003, overseeing the expansion of CHKD’s outpatient services to multiservice health and surgery centers throughout Hampton Roads, according to a news release from CHKD.
Sampson
Dahling worked as senior vice president of Richmond Memorial Hospital from 1987 until 1993 and prior to that, held senior management positions at hospitals in Texas and Minnesota. He serves on several state and regional boards, including the Virginia Hospital & Healthcare Association and Virginia Beach Vision.
“It has been a privilege to lead this organization,” Dahling said in a statement. “CHKD is a remarkable family of extraordinary clinicians, surrounded by exceptional team members and bolstered by our King’s Daughters and volunteers, all of whom are steadfast in their dedication to doing what is best and right for children. I am in awe of their compassion, their commitment to excellence, and their resilience, and I am confident they will continue to grow and flourish with Amy’s insightful and inspirational leadership, and Chris’ knowledge and experience of clinical operations.”
CHKD opened the Children’s Pavilion for inpatient psychiatric care in October.
This year, CHKD opened a 14-story, $224 million Children’s Pavilion in Norfolk to house outpatient mental health care, primary care pediatrics, sports medicine, and laboratory and radiology services. The hospital made a dozen inpatient beds available initially, and another 48 will be open in a phased approach through mid-2023. Outpatient services began in April and the hospital opened for inpatient care in the fall. When fully operational, the Children’s Pavilion will admit about 2,500 children for inpatient care every year, provide 48,000 outpatient therapy appointments annually, and add 400 new jobs to the Hampton Roads area, according to CHKD.
Sampson joined CHKD in 1990 and has been part of the health system’s leadership team. She helped develop CHKD’s mental health initiative, spearheading efforts to secure government approval and financial backing for the Children’s Pavilion, according to a news release. She has also guided the development of the hospital’s mental health program. Additionally, she has overseen strategic planning, government relations, marketing and communications, philanthropy services, community outreach, experience services, the donor milk bank, call center and volunteer services.
Foley came to CHKD in 1996 as a pediatric intensive care specialist. He has also served as chief of the division of pediatric critical care and medical director of CHKD’s pediatric intensive care unit, pharmacy and critical care transport. He became chief medical officer in 2015.
A German-inspired restaurant in Richmond canceled a reservation for a conservative political organization’s private event last week, saying in a statement posted online Thursday night that the decision was made to protect their staff, many of whom are women and/or part of the LGBTQ community. The Family Foundation, the organization that had made the reservation, opposes same-sex marriage and abortion, among other positions.
Metzger Bar and Butchery, in Richmond’s Union Hill neighborhood, posted a statement Thursday night on Instagram about the decision to cancel the Family Foundation’s reservation Wednesday. “Metzger Bar and Butchery has always prided itself on being an inclusive environment for people to dine in,” the restaurant said in the statement. “In eight years of service, we have very rarely refused service to anyone who wished to dine with us. Recently we refused service to a group that had booked an event with us after the owners of Metzger found out it was a group of donors to a political organization that seeks to deprive women and LGBTQ+ persons of their basic human rights in Virginia.”
Family Foundation President Victoria Cobb wrote in a blog post Thursday that the foundation’s vice president of operations got a call from Metzger about an hour and a half before the 7 p.m. Wednesday reservation notifying her of the cancellation.
“One of the restaurant’s owners called our team to cancel the event,” Cobb wrote in the post, which linked to Metzger’s Yelp page. “As our VP of operations explained that guests were arriving at their restaurant shortly, she asked for an explanation. Sure enough, an employee looked up our organization, and their waitstaff refused to serve us.”
Victoria Cobb, president of The Family Foundation of Virginia, speaks at a March for Life rally in April 2019. Photo courtesy Family Foundation of Virginia
In an interview Friday with Virginia Business, Cobb said her colleague, Erica Hanko, had reserved the private room at least a week or two earlier for a dessert event for about 15 to 20 people. On Wednesday at about 5:30 p.m., Cobb said, Hanko was on her way to the restaurant to check the room’s seating when she received a call from a Metzger representative who said they had to cancel, without explaining why. “She was honestly thinking, ‘Is this a COVID thing?'” because of the abrupt cancellation, Cobb said.
After Hanko asked the restaurant for the reason of the cancellation, Cobb said that she was told that a member of the waitstaff found out that the reservation was for the Family Foundation “and they had a lot of gay waitstaff,” who were presumably opposed to some of the organization’s political stances, which have included opposition to same-sex marriage and support for gay conversion therapy.
“We have always refused service to anyone for making our staff uncomfortable or unsafe, and this was the driving force behind our decision,” Metzger said in its statement. “Many of our staff are women and/or members of the LGBTQ+ community. All of our staff are people with rights who deserve dignity and a safe work environment. We respect our staff’s established rights as humans and strive to create a work environment where they can do their jobs with dignity, comfort and safety.”
As of Friday, Yelp had disabled the ability for people to post comments on Metzger Bar and Butchery’s page after it received numerous negative reviews related to the incident, quickly followed by several positive reviewers attempting to counteract the one-star reviews.
“This business recently received increased public attention, which often means people come to this page to post their views on the news,” Yelp’s notice read. “While we don’t take a stand one way or the other when it comes to this incident, we’ve temporarily disabled the posting of content to this page as we work to investigate whether the content you see here reflects actual consumer experiences rather than the recent events.”
When asked about the negative Yelp reviews of the business, which included one poster’s vow to “never set foot in a restaurant that bows to progressive employees who refuse to serve Christians” and another who wrote, “I have learned that only certain types of people are welcome at Metzger’s,” Cobb said, “I hope that their tone and approach is honorable. Even food service has now been polarized. It’s just disappointing that we can’t have a meal together.”
Cobb added that a website design company declined to design her foundation’s website for political reasons, and the former provider of its customer relationship management software, EveryAction, which became part of new parent company Bonterra in March, canceled the foundation’s contract, forcing the foundation to move its databases to a different system. “While many who hold the same beliefs may not experience this directly yet, we recognize we are on the tip of the spear,” Cobb wrote in her blog post.
Metzger co-owner and former “Top Chef” competitor Brittanny Anderson did not respond to messages Friday seeking further comment, but the restaurant’s Instagram account posted a photo Friday of a drink named “Cracks in the Foundation,” along with the announcement that it would donate all proceeds of the cocktail’s sales Friday to LGBTQ advocacy group Equality Virginia. “We are so grateful to our many guests and neighbors for their support the past few days!” the post read.
Cobb said Friday that Hanko was able to find another restaurant to seat her guests, all of whom were from the Richmond area. She declined to name that restaurant to shelter it from criticism, but said that it “happily accommodated us. We live in a free market, [so] we took our business elsewhere.”
Civil rights pioneer weighs in
In her blog post, Cobb mentioned an earlier instance in which a group was refused service — the 1960 Thalhimers department store lunch counter sit-in by 34 Black Virginia Union University students protesting racial segregation in Jim Crow-era Richmond. Cobb argued in her blog post that “people who likely consider themselves ‘progressives’” — meaning Metzger’s owners — are attempting to “recreate an environment from the 1950s and early ’60s, when people were denied food service due to their race. … Welcome to the double standard of the left.”
The 1960 Thalhimers lunch counter sit-in protesters, known as the Richmond 34, were arrested for trespassing and were recognized last year by the Virginia General Assembly for their enduring impact as part of the 20th-century Southern civil rights movement.
Elizabeth Johnson Rice, now an 82-year-old retired teacher living in Chesterfield County, was a member of the Richmond 34. She said the situation surrounding the Family Foundation and Metzger is somewhat different than the sit-in, one of numerous nonviolent protests conducted in the 1950s and ’60s to oppose racial discrimination against Black people. Those protests often led to arrests, violence against protesters and sometimes deaths.
On Feb. 22, 1960, Rice and her fellow protesters were arrested and charged with trespassing, taken to jail and then released on bail. In March 1960, they were all convicted of trespassing and fined $20 each, but the students all appealed the decision to the Virginia Supreme Court, which ruled in favor of the store owners’ right to forgo service. Ultimately, in 1963, the U.S. Supreme Court ordered a repeal of the 34 students’ convictions in a victory for the civil rights movement.
“We were going for equal justice for all,” Rice said Friday. “We were trespassing because we didn’t get service. [As Black people], if we wanted to eat anything [from Thalhimers’ lunch counter], we had to go into the alley and knock on the little door. That was really Jim Crow.”
Rice said that she still believes in equal rights for everyone today, including the right to marry someone of the same sex, but at the same time, she feels the Family Foundation party was “not being treated fairly” by Metzger Bar and Butchery. “Their reservation should be honored in 2022.”
Restaurants have provided an occasional backdrop to the culture wars playing out in recent years, as some Trump-era White House officials were refused service or targeted by protesters while dining out. In the aftermath of such incidents, social media can amplify the political polarization and lead to prolonged problems for business owners and staff members.
But that incident — which eventually was recounted by President Donald Trump’s Twitter account and numerous national news outlets — led to months of hate mail and doxxing of the Red Hen’s owner, Stephanie Wilkinson. The restaurant’s Yelp reviews reflected the political divide.
In a phone interview Friday, Wilkinson said that although she wasn’t familiar with the particulars of the Metzger situation, “my feeling about the role of privately owned businesses following their moral conscience has not changed,” and she did not regret her decision to refuse service to Sanders, who was elected Arkansas’ first woman governor in November.
She said that her decision was based not specifically on Sanders’ political views; “it was about actions we found reprehensible.” (At the time, Wilkinson had cited Sanders’ support for Trump positions such as separating migrant children from their parents, as well as opposition to transgender people serving in the military.) Similarly, if Metzger’s owners and staff found the Family Foundation’s actions “morally repugnant,” Wilkinson said, “I think I agree with them” in their refusal to serve the organization at the restaurant.
But Wilkinson also posited a hypothetical scenario: If a different business’s owners objected to a political group or individual’s stance supporting abortion access and refused them service on that basis, she couldn’t object on moral grounds, even though Wilkinson personally supports the right to abortion.
In 2019, the U.S. Supreme Court partially agreed with a bakery owner’s assertion that he could refuse a client service based on his religious convictions.
In 2012, the owner of a Colorado bakery refused to make a cake for the marriage of a gay couple based on his Christian beliefs. The couple filed a complaint to the state’s civil rights commission, which led to a lawsuit that reached the U.S. Supreme Court in 2019. The high court ruled 7-2 that the commission did not employ religious neutrality, violating baker Jack Phillips’ right to free exercise, although the court did not rule on broader issues like anti-discrimination laws, free exercise of religion and freedom of speech. Phillips is back in court now, having refused to bake a cake for a transgender woman’s transition celebration.
However, a case heard Monday by the Supreme Court — in which a Colorado graphic artist objects to designing websites for gay couples’ weddings on religious grounds — could have an impact. Critics say a ruling in the artist’s favor could lead to businesses discriminating against people based on race, religion or other factors.
“The hospitality industry is very tricky,” added Wilkinson, who opened The Red Hen in 2008 and has lived in Lexington for nearly 30 years. For customers, she said, a restaurant “feels like it ought to be part of a refuge. When these things happen, people have a visceral feeling of rejection. It feels like being booted out of your relative’s house.” And for employees, “it’s not just their job. There’s often this sense that [it’s] a family.”
The Red Hen continues to feel an impact from the Sanders incident, she said, with staff still fielding occasional “nasty messages” and the restaurant requiring a specialized reservation system that helps prevent nuisance reservations meant to keep real diners away. But also, Wilkinson says, “we continue to have people travel insane distances” to dine at the restaurant, and no longer does she “live and die by yesterday’s Yelp reviews and Google reviews. I’m liberated from having to look at that.”
Gov. Glenn Youngkin will propose allocating a new $350 million investment for industrial site development next week, the governor said in a speech delivered Friday at the Virginia Chamber‘s Virginia Economic Summit & Forum on International Trade.
In the 2022-24 budget, which Youngkin signed in June, the state allocated $150 million for the Virginia Economic Development Partnership’s Virginia Business Ready Sites program, which would also receive the proposed $350 million. If approved by the General Assembly in its 2023 session, the new allocation would bring the state’s total recent investments for site development to $500 million.
“To support the recruitment of high-growth companies, and to enhance Virginia’s ability to win, the commonwealth requires massive investment to create project-ready sites,” Youngkin said.
“I want ‘made in America’ to mean ‘made in Virginia,’” Youngkin said.
From 2016 to September 2022, Virginia missed out on more than 52,000 jobs and $120 billion in capital expenditures at least in part because companies were unable to find acceptable ready-to-build locations in the commonwealth, according to a September analysis by the Virginia Economic Development Partnership.
Within that shortage, Virginia lacks large, 250-or-more-acre sites that can attract megaprojects. From January 2015 through September 2022, 121 new industrial projects requiring an estimated 250 or more acres were announced in the Southeast U.S., according to the Virginia Economic Development Partnership. Combined, those projects generated more than $25 billion in capital expenditures and an estimated 58,000 jobs. But Virginia won just one of those 121 projects — the planned $1 billion Lego Group factory in Chesterfield County, expected to create more than 1,760 jobs.
“We are behind. We are not closing the gap, and those most competitive states continue to pull away,” Youngkin said Friday.
Virginia currently has two megasites. The 3,528-acre Southern Virginia Megasite at Berry Hill, owned by the Danville-Pittsylvania County Regional Industrial Facilities Authority, has 1,900 acres that are easily developable and is pad-ready. And in Chesapeake, the City Council approved the rezoning of the 1,420-acre Coastal Virginia Commerce Park, which will allow development to begin once the Chesapeake Economic Development Association purchases the property.
In early November, Site Selection magazine named Virginia No. 1 in its 2022 Business Climate Rankings, a jump from 10th place.
During his speech Friday, Youngkin also spoke on other aspects of state competition, including state tax structures and workforce development.
“Competing to win starts with taxes, and that’s both corporate and individual taxes,” he said.
He touted Virginia’s 2022-24 budget, which provided $4 billion in tax cuts, including an increase in the standard income tax deduction and the elimination of the statewide grocery tax, although not the local levy. “I am committed to do even more. Otherwise, we will find ourselves relegated with those high-tax, high-cost states that are being left behind,” Youngkin said.
Youngkin’s administration also is working to restructure the way government delivers workforce support, he said, by consolidating workforce development programs, which includes the community college system: “Workforce development is currently spread out over six Cabinet secretaries, 12 state agencies, 25 workforce programs with over 1,500 training programs, spending roughly $485 million in federal and state resources.”
“Our upcoming budget,” he said, “will prioritize expanding these career pathways for students by launching multiple dual-enrollment acceleration programs in partnership with our community colleges and local schools,” so that more students, and eventually all Virginia students, can graduate with industry-recognized credentials.
As the U.S. moves to a short-labor environment, it will be necessary for businesses, governments and nonprofits to reassess their approach to labor, Federal Reserve Bank of Richmond President and CEO Tom Barkin said Friday in Richmond.
Speaking at the Virginia Chamber’s 2022 Virginia Economic Summit and Forum on International Trade, Barkin said that although the nation’s unemployment rate has dropped back to levels last seen before the pandemic, workforce participation has not risen to pre-pandemic numbers. In November, the national participation rate was at 62.1%, down from 63.4% in February 2020.
Although the Fed has increased interest rates by 0.75 points four times this year to address the 40-year-high inflation rate, that did not dampen job growth. The U.S. added 263,000 jobs in November, according to the Labor Department’s Bureau of Labor Statistics payroll numbers released Friday. That’s about three times the break-even level of workforce growth, meaning the U.S. is still adding jobs faster than workers, Barkin explained.
“The result has been historic labor market tightness,” he said, particularly in skilled trades. The labor shortage, in turn, has contributed to inflation, Barkin said. The Personal Consumption Expenditures (PCE) price index, which measures the changes in the prices of goods and services compared to the same month a year ago, was at 6% overall in October, a near 40-year high.
“The unmatched outcome is fewer workers that would constrain our growth and pressure inflation — unless and until businesses and governments can deliver productivity enhancements [and] restructure incentives to bring more workers into the workforce,” he said.
By contrast, businesses had adapted to the growing labor force the U.S. experienced for decades, benefitting from the post-World War II baby boom, as well as other factors such as more women entering the workforce, more college-educated workers, better health allowing workers to live longer and historically high immigration levels. Businesses also benefitted from increased access to low-cost offshore labor over the past several decades.
Now, however, businesses must adapt to a labor shortage, Barkin said. “Employers are reconsidering working conditions, revising schedules and redesigning jobs to better match worker preferences.” Some, he noted, are partnering with community colleges to attract skilled trades workers.
Businesses also are taking active roles in reducing barriers to work by providing child care or housing support.
Within the Fed’s Fifth District (which includes Virginia, North Carolina, South Carolina, West Virginia and Maryland), a steel company has hired full-time recruiters and started its own soft-skills training program, and a poultry provider has dropped drug tests and background checks from its hiring process, he said.
Although the labor shortage has led some businesses to raise pay to meet market demands, workers still could be vulnerable, Barkin noted. Employers who raise pay will demand higher productivity or raise prices, which will lessen demand and, eventually, jobs. The U.S. could also see an increase in offshoring and automation that reduces staffing needs.
Learning from others
Governments and nonprofits should consider playing a role in broadening the labor supply, exploring policies that encourage workforce participation and preparation, Barkin said.
Case studies from other countries show possibilities. In 2000, Canada and the U.S. had similar percentages of women participating in the labor force. Now, Canada’s women labor participation has risen five points, while the U.S. has seen a decline of one percentage point. In 2020, the U.S. women’s labor force participation rate was at 56.2%.
Declining availability of child care led directly to some mothers leaving the U.S. workforce during the pandemic, according to a report released in April by the U.S. Chamber of Commerce, with 58% of all parents saying they left jobs because they couldn’t find or afford child care. Flexible work arrangements could ease pressure on parents, Barkin said, citing research from the Federal Reserve Bank of San Francisco.
Another factor in the U.S.’s labor shortage is a decrease in workers ages 55 and above, which had a higher labor force participation rate in February 2020 than they do today. If that population was at the February 2020 rate today, there would be 1.4 million more older workers.
The U.S. has an employment-to-population ratio of 56% for adults ages 60 to 64. In Japan, though, the employment-to-population ratio for workers ages 60 to 64 is at 70%, a 19.3-percentage-point rise from 2000. Some of this depends on overall better health among the Japanese population, but an end to mandatory retirement at certain ages and the addition of training programs for employers hoping to hire and retain senior workers have also helped, Barkin said.
Meanwhile, limits on immigration during the pandemic have caused a 500,000-person decline in prime working age immigrants in the U.S., Barkin said, an issue he thinks the federal government should address. “It’s worth exploring things like increased legal immigration, which would bring those with skills, work ethic and entrepreneurship into our workforce.”
In short, it’s time for businesses, governments and even economists to reassess what they think they know about the labor market, Barkin said. “Increasingly, I worry that we’re moving to an environment where labor is short and not long. The situation can be managed — other countries have proven that — but it requires real intentionality.”
Editor’s note: This article has been updated to reflect the correct rise in Japan’s employment-to-population ratio increase among those ages 60 to 64 from 2000.
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This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.