The Jobless Illusion

How the sunny unemployment rate factors out the real poverty in Richmond.

Just across the interstates running through downtown, about three blocks south of the resurgence in Jackson Ward, it’s difficult to tell where the dogwoods end and the trash begins.

White petals litter the ground next to a set of gray, decaying row houses at the corner of First and Federal streets, a few yards from John’s, a convenience store with an iron-gated door that’s locked on a warm March afternoon. The flowers seem to blend into the grocery bags, empty cans and cigarette boxes scattered along the sidewalks.

A weathered Lisa Harris, wearing bedroom slippers and cradling a 40-ounce bottle of beer in a blue plastic bag, stands at the bus stop.

She’s noncommittal when it comes to her employment. Maybe she has a job, maybe she doesn’t. She laughs when asked about her prospects. “Please, find me a damn job,” she says, with a tinge of sarcasm. “Right now, I’m doing community service.”

To hear civic boosters tell it, metro Richmond enjoys one of the lowest unemployment rates in the state. One set of numbers bears that out: According to figures released last week by the Virginia Employment Commission, unemployment in metro Richmond hovered at 3.2 percent in January, up slightly from 2.7 percent in December.

Through 2006, the region enjoyed an average unemployment rate of 3 percent, the lowest in six years. Within the city, the employment commission reports, January’s jobless rate was 4.5 percent, which would mean only 4,470 people were out of work.

But it’s difficult to reconcile the bright outlook reflected by the numbers with the street corner where Harris stands.

To the federal government, it’s known as Census Track 301. The area surrounding the tiny intersection of First and Federal, next to the Frederick A. Faye Towers senior housing complex and the brick bungalows at Gilpin Court, is where Richmond poverty hits its statistical peak.

Here, 71 percent of the citizenry — a total of 1,466 residents ages 18 and older live in the census tract — hover below the poverty line. The median household income is less than $8,000 a year, and 86 percent of families are headed by single mothers. Some 65 percent of the women ages 25 to 34, and 43.5 percent of the men in the same age bracket, have no high school diploma. It gets even worse: 78 percent of men ages 18 to 24 don’t possess a high-school degree.

To the folks who live here, the idea that Richmond has a meager 4.5 percent unemployment rate is, well, laughable. Applied generally, that should mean that 66 people who live in these housing projects and small homes have been seeking and unable to find work. That would be ludicrous when factoring in the demographics of poverty, but the number speaks to the larger issue of perception.

In reality, the 4.5 percent unemployment rate in Richmond is out of touch, says the Rev. Ben Campbell, pastoral director at Richmond Hill, the historic monastery and retreat in Church Hill.

A year ago, Campbell embarked on an academic mission with the help of Virginia Commonwealth University urban studies professor Michela M. Zonta. They set out to find a more accurate way of measuring the number of out-of-work Richmonders.

They soon realized the significance of people left off the list of unemployed. “There is a whole category of people who are not counted in the labor force,” Campbell says.

They are people the government classifies as “disinterested,” meaning they’ve stopped seeking regular work out of frustration, as well as those who are unable to work because of some kind of disability.

Zonta crunched the U.S. Census figures and included those who were not considered to be “in the labor force” by federal government standards. Including those people, he found some neighborhoods with unemployment rates as high as 60 percent.

In the census tracts representing the poorest Richmonders, Campbell says he found about 30 percent of the city population, or 60,000 people — 37 percent of men and women ages 21-64 — were without steady work.

“What we have is a significant number of people, somewhere between 12,000 and 20,000 people, who don’t have full-time jobs with benefits that’s enough to support their household[s],” he says.

Campbell readily admits he’s not a statistician by trade, and Zonta, who supplied Campbell with much of his raw data, says she hasn’t crunched Campbell’s numbers and therefore can’t guarantee their validity.

The biggest hindrance is the age of the data used. The last census count was published in 2000, and the raw data for that count was collected in the years prior, so Campbell’s numbers are based on population figures that are at least eight years old.

Still, few people would argue that for those people living in the poorest neighborhoods, the Richmond economy has considerably improved since 2000. The last census count came on the heels of one of the most prosperous times in U.S. history, the mid- to late 1990s. And it’s important to remember that the U.S. Bureau of Labor Statistics, which has been conducting monthly unemployment surveys since the 1950s, samples only a very small portion of the population for the purposes of measuring the fluctuations in the labor market. It doesn’t purport to be measuring overall poverty.

Using its monthly surveys as the foundation, the federal government taps into the databases at the Virginia Employment Commission for additional information, such as the number of people drawing unemployment benefits. Then all those numbers are mixed together to generate the figure that’s cited by most economists, business reporters and financial analysts. The figure — remember that metro Richmond’s is 3.2 percent — is widely considered the most important measure of the U.S. economy’s overall health.

Just how big is the survey?

“The survey is approximately 55,000 households nationwide. In Virginia, 2,000 to 3,000 households,” says William F. Mezger, chief economist with the Virginia Employment Commission.

“It’s probably 600 or 700 [households] in the Washington, D.C., area,” he says, “maybe 400 or 500 in Hampton Roads and maybe 300 or so in the Richmond area. And much smaller samples as you get out to the more rural areas.”

That’s 300 or so households in metro Richmond surveyed each month, including the surrounding counties. As for the number of people, on average, surveyed within city limits: “I would say Richmond city itself, you might have maybe 50 or 60 households,” says Mezger, who has been crunching numbers at the VEC for 44 years.

While the government has honed its formula over the years, and “has it down to a science,” Mezger says it’s just a sampling. And it counts as “unemployed” only those currently in the labor force, which according to the labor bureau translates to people who are “actively seeking work.”

As for excluding those with disabilities, Mezger says, that makes sense. For the purposes of measuring the job market, he says, you would include only those people actively seeking work. The government asks a series of questions to those surveyed, and they’re left in the system for a period of time so the labor bureau can check in periodically to see how the job search is going.

“They get into a series of questions of whether you’re actively looking for work,” Mezger says. “Sitting at home looking at want ads is not considered actively looking for work. Are you actively calling on employers?”

Mezger says Campbell’s numbers and the VEC’s numbers are apples and oranges. Richmond Hill, where Campbell leads daily prayers for the region, doesn’t exactly possess the experience of the labor bureau when it comes to such calculations.

But considering the small sampling that the labor bureau uses to determine the city’s unemployment rate — about 50 to 60 households per month — the city’s meager 4.5 percent unemployment rate may seem to some people a bit incomplete as a true measure of economic prosperity.

Campbell says he merely wanted a better picture of what’s happening in the labor market. For example, the labor bureau doesn’t include those who are incarcerated — more than 10,000 at the city jail — which would hike up the numbers even more.

“All of these things together suggests our unemployment rate is higher than 4 percent,” Campbell says. “To me, issue one is to basically admit there is an issue.” S

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