Employment and Economy

The Commonwealth of Virginia has the largest per capita defense expenditures in the nation. The New River Valley region receives defense dollars on a par with the Hampton Roads area, which had shipyard employment. Before defense downsizing, RAAP was the largest private employer in the region; it remains the highest wage employer in the New River Valley. The effects of defense downsizing at RAAP are felt regionally. As shown in Figure One, unemployment rates from 1990 to 1994 have been in or close to double digits for most New River Valley jurisdictions.

RAAP has laid off over 3,000 workers since 1989. In terms of lost wages in the region, those jobs cost New River Valley citizens $34.2 million in associated earnings. Non-defense industries are also affected by the layoffs. For instance, the January 1993 layoffs of 1,080 employees had a ripple effect of 816 additional jobs lost. The associated earnings cost regional citizens $14.8 million dollars.

There have been additional layoffs at RAAP since 1994, and other major employers in the region have also downsized. The combined impact on the region has been dramatic in terms of the overall economy and employment rates.

The New River Valley region is highly interrelated, which is one reason the ripple effect of RAAP layoffs is so extensive. Thirty four percent of regional residents commute from their home jurisdiction to another to work. This demonstrates why any layoff, no matter where it occurs, will have a broad impact on the region. The January 1993 layoffs at RAAP were felt region-wide, although the plant itself lies only in Montgomery and Pulaski Counties. Another massive layoff occurred at the AT&T; plant in Pulaski County in 1990; this plant was ultimately closed. This layoff and closing also had a region-wide impact.

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