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Bringing new jobs still a tricky endeavor

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Virginia officials say jobs are on the increase, but some companies are still laying off workers.

By Landmark News Service

 

RICHMOND — Gov. Bob McDonnell, who took office in January 2010 under a pledge to create jobs, says he believes Virginia is positioned to do better economically than most states — but acknowledged his expectations haven’t been met.
Northern Virginia has garnered the largest number of new jobs during his administration. Southwest and Southern Virginia lag behind Hampton Roads, which is slightly behind the Richmond area in job growth, according to the most recent numbers from the state.
Just before Christmas, the Richmond area landed the state’s single biggest jobs deal since 2004: two distribution centers for online retailer Amazon.com. The company plans to spend $135 million on a 1 million-square-foot warehouse in Chesterfield County and a $50 million fulfillment center in Dinwiddie County, which together are to employ more than 1,350 people.
And multiple jobs deals have gone to the Southside and Southwest Virginia regions plagued by chronically high unemployment, including the Albany Industries furniture company that opened last month in Galax and expects to employ more than 300 people.
Aric Bopp, who directs the New River Valley Economic Development Alliance, said in November the labor force in the New River Valley planning district rose to a record 90,000 people in September. The job supply during the same month stood about 700 shy of the pre-recession peak of 85,301.
“I think this administration has done an excellent job in a ‘down economy’ protecting and investing in the economic development programs that show ‘real’ results,” Bopp said. “This can include the great work of the Virginia Economic Development Partnership and also such things as funding the Governor’s Opportunity Fund and other incentive programs so that Virginia can stay competitive with existing industry and new industry moving in to the Commonwealth.”
In 2011, some of the companies that said they will be hiring in this region included Phoenix Packaging Group and Volvo Trucks North America in Pulaski County, Federal-Mogul Corp. in Blacksburg and Norfolk Southern Corp. and FreightCar America in Roanoke. Backcountry.com has said it will hire staff for a new Christiansburg warehouse and distribution center in 2012.
MedFit in Independence, makers of Nautilus fitness equipment, also have announced plans for hiring a handful of new workers after acquiring other workout equipment brands in 2011.
While there have been successes, the overall results have been mixed, undercut by broader national trends that left more than 264,517 Virginians without work as of Dec. 22.
And those factors make for an unsettling economic roller coaster ride.
Just this month, a German power tool company announced expansion plans at its Virginia Beach facility would accommodate 52 new hires, a welcome development that was followed by news that two other companies plan to lay off more than 110 workers next year.
“Sometimes it seems like we take two steps forward and one step back,” said Lt. Gov. Bill Bolling, the state’s chief jobs ambassador. “You close a big deal and you create a few hundred jobs someplace and then the next day some existing company shuts down and you lose a few hundred jobs. And that’s just the way the economy is right now.”
The ultimate decision on where to relocate or expand is the decision of the businesses. And even when companies select an area, McDonnell said, it can take a few years for them to start hiring.
Sometimes, the companies don’t pick Virginia at all, despite offers of state incentive packages and local tax breaks. Case in point: Carroll County and state economic developers worked with an unnamed company for nearly two years and was close to signing an agreement to bring 150 jobs to the area when the potential employer decided not to expand after all.
Saddled with a sluggish economy, the governor has aggressively marketed the state as “open for business.”
He’s worked to promote its corporate-friendly reputation and reduce regulations, and he won legislative approval for a $100 million package of tax credits and other financial incentives. He’s asking for an additional $40 million this year.
That’s positioned Virginia to do “better than most states” on the job front, McDonnell said, though he acknowledged the results thus far aren’t “nearly good enough to meet my expectations.”
His administration boasts that it has overseen a net gain of nearly 63,000 jobs over two years — ranking Virginia’s job growth among the top 10 states during that time — and helped consummate more than 660 deals expected to bring upward of 41,600 jobs to the state in the years to come.
Yet the bright spots emphasized by state officials don’t overshadow anemic job growth that is “but a drop in the bucket to what we need” to reverse years of losses, according to Michael Cassidy, president of the Commonwealth Institute for Fiscal Analysis, which advocates for policies to help low- and middle-income Virginians.
“We still remain near the bottom of a very deep jobs hole in Virginia, and it’s going to take a very long time to get out of it,” said Cassidy, referencing state employment figures that fell below 3.7 million during the recession and have remained in the 3.6 million range since it ended in summer 2009. Factoring in growth in the working-age population, the institute estimates Virginia needs another 291,400 jobs to reach pre-recession levels.
The latest employment data back that up — labor figures shows about 127,000 fewer people are working in Virginia now than before the downturn became evident in the state labor market.
Administration officials say a rosier picture emerges when you consider that the number of Virginians who have jobs — 3.9 million — is near pre-recession levels. That figure includes state residents who work elsewhere.
“The good news,” Bolling said, “is that we’re doing better than almost anybody in the country in a tough economy. And that’s something we can be proud of.”