Stephanie Ferguson
Director, Global Employment Policy & Special Initiatives, U.S. Chamber of Commerce
Isabella Lucy
Graphic Designer, U.S. Chamber of Commerce
Published
September 15, 2023
The state of Virginia has a favorable landscape for businesses and individuals, with a diverse economy, strong labor market recovery, and a robust small business ecosystem. Immigrants contribute meaningfully to the state's workforce and economy, while educational attainment, quality of life, and cost of living factors remain promising.
The Worker Shortage Across America
Explore the interactive map below to see the impact of the worker shortage crisis in each state.
The Chamber’s Worker Shortage Index ratio indicates the number of available workers for every job opening. A ratio above 1.0 indicates a surplus of available workers compared to job openings.
Virginia’s Labor Market
Prior to the pandemic, Virginia’s labor market relatively healthy. The state had 73 workers for every 100 open jobs and there were more workers being hired into more jobs than leaving them. The state's unemployment rate was far lower than the national figure at 3.5%, and its labor force participation rate was significantly higher than the national rate of 63.4%.
Virginia’s current labor market has not yet fully recovered, but it is displaying signs of improvement. The state’s worker shortage lags behind both its pre-pandemic levels and the nation’s current average. However, Virginia’s labor force participation rate has fully rebounded, and is now one percentage point higher than it was in February 2020.
The hiring rate in Virginia continues has surpassed the quit rate since January 2020, and Virginia boasts a notably low unemployment rate. These trends are promising for employers, who have a surplus of 307,000 job openings among a labor shortage. However, Virginia is grappling with a workforce shortage, evident by the fact that there are only 57 available workers for every 100 open job positions in the Old Dominion state.
Virginia’s Business Environment
Virginia has a robust business environment and was recently ranked as the second top state for business. The state’s business friendly environment, coupled with a talented workforce, and proximity to the nation’s Capital makes the state a suitable home for a diverse market of businesses.
Most Virginians are employed by the professional and business services industries and government services, with construction industry employment being relatively minimal. Virginia's employment landscape is a result of its proximity to Washington D.C., creating an ecosystem bustling with government contractors, consultants, and corporate headquarters.
Virginia is home to a thriving small business ecosystem, with 99.5% of all Virginia’s businesses falling into this category. Nearly half of Virginia's workforce are employed by small businesses. Within this dynamic landscape, women own 44.3% of small businesses, and a quarter of all Virginia small business are minority owned. Hispanics own 8.1% of Virginia small businesses and 9.5% are veteran owned.
Virginia’s Educational Attainment
Nearly 24% of Virginia’s population has obtained their high school diploma or its equivalent, which is below the U.S. average of 26.1% in 2022. 23.6% of the population have attained a bachelor's degree, while 18.6% have secured a graduate degree, both above the national averages.
Seven in 10 Virginian high school graduates stay in the state to attend college where the average in-state tuition is $13,655. Out-of-state tuition in Virginia is $35,831, significantly more expensive than the national average out-of-state tuition of $28,000. In total, 543,000 students are enrolled in a Virginia college for the 2022-2023 school year. These students supply a rich talent pool from which local employers can recruit talent.
Quality of Life
Virginia's median household income of $85,170, which surpasses the national average of approximately $70,000, ranking the state 14th among all states. Virginia's tax rate, ranging from 2% to 5.75%, places it in the lower tiers compared to other state tax rates.
Thirty-four percent of Virginia workers are remote workers. For those commuting into an office, the average commute time is 28.6 minutes. The Council for Community and Economic Research measures states’ costs of living compared to the national average of 100. Vermont’s cost of living index falls at 103.1 meaning the state is slightly less affordable in comparison to the national cost of living. The median rent settles at $1,257, while the median home cost is $376,931, slightly higher than the national average. Around 67% of the population owned their housing unit in 2021. The state experienced a slow growth rate of .55% from 2020 to 2022.
Immigration
In the U.S., immigrants tend to be of working age in comparison to native-born individuals. Consequently, they are more actively engaged in the labor force, playing a dual role as both consumers and taxpayers, contributing to help fund programs like Medicare and Social Security.
Looking at Virginia in particular, immigrants comprise 12.8% of the state's population, totaling more than one million individuals. Their collective spending power amounts to $34.3 billion, while their tax contributions reach $12.8 billion.
