The unemployment rate in Charlottesville has doubled since last year, but it remains the second lowest in the state, the Virginia Employment Commission announced Wednesday in a press release.
The release shows that Northern Virginia, at 5.2 percent, is the only area in the state with a lower unemployment rate. The City’s seasonally unadjusted unemployment rate is slightly higher at 5.6 percent, up from 2.8 percent at this time last year.
“The basic reason is that universities have very stable employment,” said University Economics Dept. Chair William Johnson. “Contrast it with a construction company that’s going to lay people off when their number of contracts falls. Universities have pretty stable demand and they are not fluctuating their employment very much.”
Bill Mezger, the Commission’s chief economist, agreed with Johnson’s assessment, noting the University’s role in keeping Charlottesville’s unemployment rate lower than most cities’.
“Charlottesville is usually the second lowest metropolitan area on unemployment,” he said. “U.Va. and the Medical Center are about a fifth of employment in the Charlottesville area and then you’ve got the trade and service industries that serve those large institutions.” Mezger added that more federal workers also recently moved to Charlottesville, as some government agencies move out of the Washington, D.C. metropolitan area.
Mezger noted that the commonwealth’s lack of manufacturing employment is a major reason for the low unemployment rate in Virginia, and, even more so, Charlottesville. The statewide unemployment rate is at 6.4 percent.
“Recessions used to be largely caused by manufacturing inventory problems,” he said. “This is less than 7 percent of employment [in Virginia], so we don’t have the big block of manufacturing employment like Michigan and Ohio to cause a lot of layoffs in recessions.”
The fact remains, however, that there are unemployed workers in the area. This mostly can be attributed to out-of-area construction workers living in Charlottesville during the off-season, Mezger said.
“Not many of those [workers] are working,” he said.
Mezger said he anticipates that Charlottesville’s unemployment rate will stay between 5 and 6 percent — below the state average — for the remainder of the year.
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