10/06/11: There’s strength in numbers

This op-ed appeared in The Virginian-Pilot on the date shown.

WHEN COMPARED with the rest of the nation, there was some good news in Old Dominion economics professor James Koch’s annual State of the Region report.

The report, presented Tuesday, marks one of only a couple of times each year that details about the local economy are made available to the public. It draws heavily on the work of the ODU Economic Forecasting Project, which produces a separate report each January on the projected regional economy for the coming year.

Koch’s report, which can be viewed at http://www.bpa.odu.edu/forecasting/sor/sor2011.shtml, shows that our unemployment rate is lower than that of the rest of the nation, thanks to defense spending.

Our median household income — that is, the point at which half the households earn less and half the households earn more — is higher, again thanks to defense spending. Between 2000 and 2010, the Hampton Roads economy grew faster, due to — you guessed it — defense spending.

The reliance on defense spending — it now accounts for nearly 46 percent of our gross regional product, the measure of goods and services produced here — is good for us as long as the dollars continue to flow. It is easy to see why our congressional delegation fights hard to keep carriers in the region and to forestall the closing of military bases and commands. It is when those dollars decline that our local economy suffers.

Groups like the Hampton Roads Partnership have been saying for a while now that we need to diversify our economy. To get there, though, requires that we first think of Hampton Roads as a region and not as a group of individual localities competing against each other.

Part of why our residents think this way is because our elected officials think this way. And, of course, the elected officials think this way because that’s how Virginia is organized.

But that’s really no excuse.

The cities and counties that comprise Hampton Roads are economically interdependent. One way to see that was discussed in the Koch report, including a chart showing where people live as compared to where they work.

Although the figures are a little dated — they’re from the second quarter of 2009 — it is clear that jobs created in one city do not translate to workers living in that city. Of the 135,050 nonmilitary jobs in Norfolk, for example, only 27.8 percent of the workers live here. Just 32.2 percent of Chesapeake’s 97,538 nonmilitary jobs are held by that city’s residents.

Of the 15 localities included in the chart, only two — Virginia Beach at 53 percent and Mathews County at 55 percent — have more than half their jobs held by residents. The report states that “a job created in one city or county in Hampton Roads typically benefits all the other jurisdictions.” What’s important is not where the job is created but the fact that the job is created. We should be “more concerned about how we can increase the total number of jobs in our region.”

Which, of course, brings us right back to our reliance on defense spending. The possibility of cuts in that sector represents a real threat to all of us. I can only hope that any new jobs created are in other areas of our economy.