When it comes to post-pandemic job and economic recovery, the Lynchburg area has found itself slower on the rebound than other parts of the state — but that’s just the latest hurdle in overall sluggishness that’s persisted since the 2008 recession.
While employment numbers have improved, the Lynchburg metropolitan area, which includes the surrounding counties of Amherst, Appomattox, Bedford and Campbell, hasn’t gotten back to pre-pandemic numbers, and hasn’t even come close to employment levels prior to the recession, census and labor data shows.
Job loss in the metro has outpaced gains to the tune of 6,300 positions in that timeframe, according to data from the Bureau of Labor Statistics. Before the pandemic hit, the area was still more than 3,000 jobs behind pre-recession levels.
Lynchburg has felt the deepest impact of that — the city has seen employment fall by 6,800 since 2008, which makes for a decline of more than 12%. Even compared to 2010, when the recession was having the greatest impact on employment and unemployment, the city is still down by almost 4,000 working individuals.
Along with other economic factors, this painted something of a grim outlook for the Hill City when stacked against other Virginia metro areas in the State of the Commonwealth Report, compiled by the Dragas Center for Economic Analysis and Policy at Old Dominion University. Published at the end of 2021, the report graphed economic recovery measures among Virginia metros since the pandemic hit, as well as trends since 2010 — the lowest post-recession point in many respects. (For previous coverage, see “ODU report warns Virginia is ‘pulling part.'”)
Robert McNab, director of Dragas, points out in the report that many Virginia metro areas didn’t grow over the last decade, which contributes to the state’s economy lagging behind the country’s overall. Even ODU’s home turf in Hampton Roads saw anemic growth during that period, he said in an interview, leading to concerted discussions on growth strategies.
Among many measures over the past decade, including real GDP growth, personal income growth, employment and civilian labor force growth, Dragas’ report shows the Lynchburg metro area clocking in among the slowest — or fastest shrinking.
The report is one that the Lynchburg Regional Business Alliance has relied on for years to provide a snapshot of the local economy, said CEO Megan Lucas. She and others from the alliance met up with Dragas folks in April, and, still trying to get a handle on what’s driving some of those numbers and trends, Lucas said the alliance will start commissioning a deeper annual report on Lynchburg’s economic performance later this year.
One measure where the Lynchburg metro area ranked dead last in the state among Dragas’ numbers was in compound annual real GDP growth, which shrank by 0.7% between the 2010 post-recession “trough” and 2020.
“If your real GDP … is essentially stagnant or decreasing over time, that is a sign that the region is not only failing to produce additional goods and services, but more likely it’s falling behind its peer metro areas,” McNab said.
Lucas said the alliance is turning its focus to the Lynchburg metro’s industry clusters as the result of talks with Dragas. Recent data published by the alliance through a JobsEQ report shows trends and forecasts for employment in different industries and by occupation, and it’s equally dim.
Notably, few industries are projected to see employment growth through 2030 around Lynchburg, according to the report. Health care is expected to grow the most, while the education and consumer services sectors are projected for modest growth.
Every other sector is projected to decline.
Lucas said the shrinking manufacturing employment — the second-largest sector in the area with 13.8% of workers — is driven by automation, whereas the growing education and health sectors are population driven. Together, education and health employees make up about a quarter of the area’s workforce, according to the alliance’s report.
Lucas said major employers that have left the metro over the past few years have done so for corporate reasons, like downsizing or buyouts, and the focus now for existing businesses is on retention and education to train more skilled workers who’re equipped for that automated workplace.
And demand for a degree is what’s driving any and all job growth around Lynchburg.
Projections from the alliance’s JobsEQ report show a shrinking job market for anyone without a degree, including positions that require previous experience and long-term training. Jobs that require a two-year certificate or bachelor’s degree are projected to grow marginally by 0.1% and 0.2% per year, respectively, while those requiring postgraduate degrees should see growth by 0.6%.
Along with declining employment, the Dragas report shows that the region’s workforce participation rate has been shrinking, with fewer people working or in the market for a job in the first place.
That was happening everywhere during the pandemic, but the Lynchburg metro was seeing its labor force slowly shrink even beforehand, despite a growing population. The only metro whose workforce was declining more swiftly since the recession was Kingsport-Bristol, in the far southwestern corner of the state, which was simultaneously seeing its population shrink. As the report states, a declining workforce participation rate “may be a signal that a region is struggling to attract and retain labor; simply put, workers are seeking better fortunes elsewhere.”
When it comes to bringing new jobs to the Lynchburg area, Lucas said companies need the physical space and the qualified workforce on the most essential level.
“What I’ve found in the past six months is, whoever has the building wins,” she said. “The rest they figure out, because of automation.”
The alliance has a short list of prime locations available to those companies and offers site selection assistance. One major project it’s prioritized to that end is the old Central Virginia Training Center campus in Madison Heights, with about 120 acres of buildable land on a prime site just across the James River from downtown Lynchburg.
Alongside other regional partners, the alliance commissioned a master redevelopment plan for the site that was adopted in April by Amherst County officials. The General Assembly paved another stepping stone in that path whenit passed a state budget forward with $25 million allocated to pay off debt on the CVTC site. (See this background story on the CVTC site.)
As the master plan shows, the “highest and best use … what could grow and be sustained over there” is 200,000 square feet of technology industrial space, Lucas said, flanked by commercial business space, retail space and housing. She said the plan illustrates that the region has room for a tech-savvy workforce here that’s simultaneously connected to a strong, diverse urban core and to the outdoors.
John Abell, who’s taught economics as a professor at Randolph College for over 30 years, kept track of local economic data and published related research, said Lynchburg’s lag behind other Virginia metros comes as no surprise. The area tends to follow national trends with a delay, he said, but has historically seen higher poverty rates than other Virginia cities on average and lower labor participation rates than state numbers.
“Lynchburg’s got its own unique problems, and then I try to get others in the city to say, ‘What are those problems?’ and nobody can ever quite put a handle on it as to what those problems are,” he said in an interview.
Along with the sustained tanking of employment numbers, Abell said the city has the most concentration of poverty in the area, though it’s improved since peaking around the mid-2010s. Lynchburg’s five-year poverty estimate now sits at 17.1%, down from 26%, when city officials responded by supporting various local and grassroots poverty-fighting measures.
And Abell points to data showing that poverty is especially pronounced among the city’s Black residents, youth, and in its urban core: 56.1% of Black youth living in those urban core ZIP codes fall below the poverty line. That poses a complicated dilemma for those young people with no easy solution, Abell said, especially when student debt looms so large.
In an initial response to Dragas’ State of the Commonwealth report, the Lynchburg Regional Business Alliance cited the area’s low cost of living — 11.4% below the national average — among positive factors that the report doesn’t show. But when that’s coupled with lower average income levels, the region still falls short of many others in Virginia and means that plenty of working households still struggle.
The Lynchburg metro tied for last with Staunton in personal income growth rate from 2010 to 2019, according to the Dragas report, and has the third lowest real income per capita (behind the Blacksburg-Christiansburg and Harrisonburg metros), even when adjusted for inflation and cost of living.
Although Lynchburg’s median income has been slowly creeping up from 2010 and pulled back to pre-recession levels in around 2018, Abell cites MIT’s living wage calculator in showing that the median household income of about $52,000 wouldn’t cover estimated expenses for anyone with a child, whether they’re single, the earner in a single-earner household or in a double-earner household.
“We should have competitive wages to offer companies, we should have an educated workforce,” Abell said. “…When you break down Lynchburg employees by their highest degrees … those people make less here than they would if they had those same degrees in other locations.”
The region’s low cost of living and low labor union participation are selling points for businesses looking at places to set up shop, Lucas said. In speaking to companies that might consider the Lynchburg metro, she said recently growing demands for higher pay haven’t come into play, adding most are happy to pay for a qualified workforce.
“Certainly it is an employee’s market right now, and employees can make those decisions,” she said in reference to workers drawn to what they perceive as greener pastures. “And it’ll work for some and it won’t work for others. But I think that as long as our companies continue to do what’s right by their employees and create the culture that those employees appreciate, we’re a great spot.”