Unemployment in area nearly doubles in 1 year

Unemployment has nearly doubled in Charlottesville and surrounding counties in the last year, according to data released Tuesday by the Virginia Employment Commission.

But state and local economic officials say the numbers are still lower than in many areas of the state and country.

The new numbers show 5.9 percent of the Charlottesville Metropolitan Statistical Area’s work force was unemployed in May, up from 3 percent a year ago.

The metro area includes the city and the counties of Nelson, Albemarle, Fluvanna and Greene.

Charlottesville’s unemployment has reached 7 percent, while Albemarle County reported 5.3 percent in May. Buckingham County’s jobless rate climbed to 8.5 percent.

The national average was 9.1 percent, up from 5.2 percent in May 2008.

Bill Mezger, chief economist with the VEC, attributed some of the local increase to the number of UVa students entering the work force. He said unemployment numbers for June are expected to increase as high school students join the work force for the summer.

“College graduates are facing probably the worst labor market in 30 years,” Mezger said. “They are also competing for jobs against seasoned workers who have been laid off and are also looking for work.”

Although Charlottes-ville’s metro area unemployment rate has doubled, it still remains one of the lowest in the state, said Terry Rephann, regional economist with UVa’s Center for Economic and Policy Studies.

Unemployment numbers statewide were 7 percent in May.

“Charlottesville is an island in the state that has always had relatively lower unemployment numbers,” Rephann said. “That is because you have a high number of university and government jobs and also a higher number of retirees and affluent people.”

Other parts of the state that depend on manufacturing, forestry and retail jobs to support their work force have seen higher unemployment numbers, Rephann said.

“[Manufacturing] jobs are being shipped overseas and will never be seen here again,” Rephann said.

Bryan Thomas, president of the Charlottesville Regional Chamber of Commerce, said members have been concerned about the economic downturn and keeping their businesses afloat.

“Our members and employers are certainly feeling the effects on this economy,” Thomas said. “We’ve heard from many members who have had to face new challenges.”

Chamber member Geoff Kilmer, the owner of Photoworks Creative Group in Charlottesville, has trimmed his staff by five and cut salaries to save his business. He’s also sought a new client base and offered different services to help make his marketing services business more productive.

Kilmer, who has been in business for more than 23 years, said this is the hardest economic decline he has seen. But his safeguarding efforts have worked and business has picked up in recent months, Kilmer said.

“I’m optimistic the second half of the year is going to be much better for business than the first half of the year,” Kilmer said. “The way we’ll get there is by expanding our services and expanding our work base.”

Rephann said it could be next year before unemployment numbers decrease. He said the government’s stimulus package should also help boost the economy.

“The fiscal stimulus is going to kick in [in] the second half of the year and hopefully the economy will start to improve,” Rephann said. “That is also dependant upon nothing else happening that will keep us in a recession.”

State economic officials are also hoping to see lower unemployment numbers as federal stimulus money comes to the state and projects get started, Mezger said. The Charlottesville Metropolitan Statistical Area is second to Northern Virginia in lowest unemployment in the state.

The Charlottesville MSA had the 46th lowest unemployment rate among the 371 MSAs nationally, Mezger said. The Washington MSA, which includes counties in Northern Virginia, is considered to have the lowest unemployment rates among the 12 largest MSAs in the nation, statistics from the U.S. Bureau of Labor Statistics show.

“Northern Virginia is just a little bit better because they have more federal employees in the area,” Mezger said. “They’re seeing that stimulus money first because the agencies have to get the projects started.”

Numbers released Tuesday also show a decrease in Virginia residents drawing unemployment benefits from April to May, but Mezger said those numbers are usually lower because of the time of year. He said filings for unemployment benefits tend to be higher earlier in the year.

In Charlottesville, 1,049 new claims for unemployment benefits were filed in May, up from 707 filed in April and 535 filed in May 2008, he said.

Although the number of people receiving benefits has decreased across the state, more people who do receive benefits are getting them for the entire 26-week state benefit period. Some are then taking advantage of a federal program that provides 13 additional weeks of unemployment benefits.

“When workers have exhausted their state benefits they are moving to the federal benefits,” Mezger said.