Apparently a college degree does make a difference – at least when it comes to a region’s ability to recover from recession.
Northern Virginia is a driver of growth in our state. This was the case in the period between the last two recessions. From 2002 through 2007, employment in the Northern Virginia portion of the Washington metro area expanded at an annual average rate of 2.7 percent, compared with a 1.5 percent rate statewide.
Employment in Northern Virginia also recovered from the most recent recession more quickly than the state and nation. It reached the former peak in employment early in 2011, compared with 2014 in both the state and the nation.
Then came federal budget cuts and a government shutdown. During this period, the lack of growth in Northern Virginia caused the economy in Virginia to stall.
Employment growth in Northern Virginia contracted 0.7 percent on a year-over-year basis in February 2014 and drove the overall state growth down 0.3 percent during the same period. In contrast, employment growth in the nation was accelerating and stood at 1.6 percent.
One would expect such a sharp slowdown in employment that is caused by one industry sector – federal spending – to generate a prolonged slowdown in economic activity as displaced workers try to find other employment.
Similar to the 1990s, when a cut of defense spending slowed growth in Northern Virginia for a short time, the latest employment report shows the region growing at the same rate as the nation. For the 12 months ending with September 2015, employment grew 2 percent in Northern Virginia compared with 2 percent in the nation and 0.9 percent in the state.
A highly educated population is a major reason for the quick rebound in Northern Virginia.
Based on census data from 2013, 54 percent of the population in the region possess a college degree or higher, compared with 30.5 percent in the nation. The unemployment rate for people in the labor force with a college degree was 2.5 percent in September compared with 5.2 percent for those who have only a high school diploma.
Skills that come with a college degree are more easily transferable from one industry to another. It’s not quite as easy as changing a consultant’s letterhead from Defense Inc. to Cyber Security LLC, but the transferable skills possessed by workers in Northern Virginia clearly give the region resiliency during times of economic change.
(This article was first published in the Richmond Times Dispatch)