McAuliffe v. Youngkin: the numbers under the candidates’ work, according to the economy
In a hotly contested gubernatorial race, few issues have been portrayed in such contrasting ways by the countryside as job creation and the business climate in Virginia.
Democrat Terry McAuliffe, who served as governor from 2014 to 2018, is posing as the jobs guy. He claims that during his tenure he helped create 200,000 jobs, increased his personal income by 14% and reduced unemployment to 3.3%.
His campaign staff say he intends to defeat COVID-19, create more well-paying jobs, including in clean energy, and raise the state’s minimum wage to $ 15 per time.
Republican Glenn Youngkin has a much darker outlook. “Virginia has had no job growth from the day Terry McAuliffe took office until the end of 2020,” Youngkin wrote in an email to the Mercury.. The former co-CEO of large private equity firm Carlyle Group says Virginia has few job opportunities and more than 500,000 Virginians have moved to other states to work.
So, who is right ? It depends which economist you ask.
None of the candidates’ statements reflect Virginia’s reliance on federal spending, especially the military, which is beyond the control of any governor.
The candidates’ statements are also lacking in nuance in other respects. Do they see job growth over the past decade as a time when the state was recovering from a major recession and federal spending cuts were hurting the state? Are we taking into account the effects of the coronavirus pandemic, which significantly reduced jobs in 2020 only to see many return this year?
Bob McNab, professor of economics at Old Dominion University, cannot say which candidate is correct. “I believe the data and the data show that Virginia has performed relatively well during the pandemic compared to other states,” he said.
Long term, McNab says that between February 2010, the end of the great job-killing recession, and February 2020, Virginia created 492,000 jobs.
The pandemic subsequently stifled the majority of those gains, leaving a net addition of just 12,000 jobs in May 2020. he says.
On the bright side, Virginia began to regain lost jobs in the summer of 2020, and job growth continued through 2021. Since the trough of the pandemic recession, the state has created 314,000 jobs. . Job growth also appears to have accelerated in the second half of 2021.
“Virginia fared better during the pandemic than many other states because of federal spending,” he said. The Income Stabilization Fund – created by an amendment to the state constitution as a rainy day fund that requires additional revenue to be saved when the state experiences strong economic growth – and the unexpected resilience of Consumer spending has helped the state weather the worst of the pandemic, he says.
Another economist, Fletcher Mangum of Mangum Economics, a consulting firm in Richmond, has a much sharper view. He agrees that federal spending has helped protect the state from job losses, but adds that “Virginia is again behind the nation in recovery and the trend is getting worse,” he said. he writes in an email.
He estimates that the state is only ranked 41st among states growing year over year, then gained ground in June. But it fell back in July and August when it rose to 47e place, he says.
Mangum is particularly critical of what he says is the state’s bad business climate, a claim made by the Youngkin campaign. To blame, he says, are the cost of doing business and a poor tax system.
He notes that CNBC ranked Virginia as number one in the country for its business climate in July, but made no comment on the apparent contradiction. Others said Virginia’s strong education system, good quality of life and track record of respecting diversity have propelled the state to the top of the outlet rankings after he refined his criteria to integrate equity and inclusion.
Laura Goren, research director of the Commonwealth Institute for Fiscal Analysis, says the state’s dependence on the federal sector means fewer job losses but also fewer job gains.
The state claims a good business climate, but Goren, whose institute looks at the social justice aspect of the economy, says he still has a long way to go to improve the lot of workers.
Too many workers struggle with relatively low wages. The state’s minimum wage is only $ 9.50 an hour – “too low to afford a living,” she said. Salary today is expected to be $ 11.12 an hour if adjusted for inflation. If workers’ productivity gains are factored in, the wage should be $ 22.14 an hour, according to Goren.
Another point of contention for candidates is Virginia’s Right to Work Act, which prohibits the payment of union dues as a condition of employment and is designed to keep unions weak. Goren says it must be repealed.
Princess Blanding, who is on the ballot for governor representing the Liberation Party. She supports the repeal of the right to work and wants better protections for workers.
Youngkin is firmly opposed to any repeal of the right to work. McAuliffe dodged the question, saying he was in favor of repeal, but getting General Assembly approval is unrealistic.
Brett Vassey, president of the Virginia Manufacturers Association, believes the state’s business climate could be improved because Virginia is weak in terms of job creation. “Youngkin is right,” he said.
He advocates for business-friendly policies that could help the declining state manufacturing hub. They include more pipelines to supply new factories, less regulation, less corporate taxes and “more (minimum) wage nonsense,” he says.
One major attraction the state could enhance would be the creation of larger industrial sites that already have water, sewage, and electricity, as well as roads, permits, and other amenities. These can be offered to new businesses so that they can establish themselves more quickly. They can be about 250 acres in size and “megasites” are typically 1,000 acres or more.
Vassey complains that there are only five megasites in the state. Stephen Moret, president and CEO of the Virginia Economic Development Partnership, stressed in presentations that Virginia needs to develop more ready-to-use industrial sites. It also needs more water and natural gas on an industrial scale.
The state has performed well on the technology side. Northern Virginia, the world’s largest internet traffic hub, also has the largest collection of data centers. These huge air-conditioned facilities house long rows of data servers used by companies such as Amazon, Google, Facebook and others.
More and more such centers have spread to the Richmond area and also southwestern Virginia, which struggled to weather the furniture and coal downturns. While increasing local tax bases, they also employ fewer workers, although they tend to be well paid.
Another boost for Southwest Virginia came in early October with the announcement of a $ 714 million joint venture of Blue Star Manufacturing and American Glove Innovations near Wytheville. It will manufacture medical products and employ 2,500 people over the next five years, according to Gov. Ralph Northam’s office and company officials.
Oddly enough, neither the McAuliffe nor Youngkin campaigns made much noise. Meanwhile, understanding the true picture of job creation in Virginia remains murky.