(Central Square) – Economic recessions are usually accompanied by job losses and an increase in unemployment, but unemployment is low and many Virginia businesses say the country has posted two consecutive quarters of negative economic growth. So we are having trouble finding workers.
“Many of us continue to face labor shortages.
The national unemployment rate stood at 3.5% in July and was even lower in the Commonwealth at 2.7%. However, the unemployment rate figures only consider those who are looking for work and do not include those who are not. The federal unemployment rate is falling, but the labor force participation rate was only 63.8% in July, rising at a slower rate than the unemployment rate fell. Participation is up just 1% from the previous year, and the total number of employed Virginians is still lower than it was before the COVID-19 pandemic began.
“The ‘labor shortage’ is first and foremost a labor force participation issue,” Stephen Hayner, a senior fellow in state and local tax policy at the free market Thomas Jefferson Institute, told Center Square.
Melvin said most businesses in the industry he represents are seeing declining profitability and rising labor, occupancy and operating costs, forcing many restaurants to raise menu prices. said. Financial problems, combined with an inability to find qualified workers, have forced some businesses to cut hours and many have had to postpone expansion plans, he said. rice field.
A lot of companies are “trying to come up with everything they can,” Melvin said.
“It’s pretty bad. It’s kind of the situation everyone is facing here,” he added.
Hayner said it was still unclear if there would be a recession, but the economy was still facing problems.
“Whether or not the state as a whole is in recession at this point is debatable, but parts of the economy are clearly contracting,” Hayner said. “Where there is a contraction, there will probably be less jobs.
Some economists have called the recession two consecutive quarters of negative economic growth, which explains the current economic situation. However, the administration of President Joe Biden has argued that the current state of the economy does not qualify as a recession because other common factors in recessions, such as high unemployment, do not plague the country.