Policy: Economy

Amid federal growth, the other Virginia is not doing well

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Beltway Confidential,Virginia,Timothy P. Carney,Economy

Northern Virginia has four of the wealthiest counties in America — Fairfax, Loudoun, Prince William and Arlington. Falls Church and Alexandria are rich, too.

This region has thrived while the country has suffered in recent years. The reason is obvious: The federal government is growing is size and power.

So what about non-federal Virginia? How's it doing?

Keith Hall and Robert Green at the Mercatus Center asked this question. They found:

We estimate that about 30 percent of state employment relies on government spending, and this portion of the labor market flourished during the recession. The remaining 70 percent of Virginia’s labor market has performed about as poorly as the rest of the country since 2007. This poor performance includes a significant amount of worker disengagement that has driven down the official unemployment rate for the state by as much as 2.6 percentage points, giving an impression of a labor market that is healthier than it actually is.

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