Summary
A comprehensive unemployment reduction strategy implemented within Chesapeake, VA, would drive the current unemployment rate of 4.4% out of its state of deadlock. The strategy should be based on a clearly communicated vision, should align available resources with its primary goals, and should be measurable at every stage.
Issue
- Chesapeake’s current unemployment rate is 4.4% and has been stable throughout 2016 (Chesapeake, VA Unemployment Rate Report, 2016).
- Statewide unemployment rates are falling, but Chesapeake’s rate remains stagnant (Virginia Beach Area Economic Summary, 2016).
- The unemployment rate exacerbates local economic concerns in terms of healthcare costs, household income, and living standards.
Background
- In 2015, Chesapeake Energy Corp. reduced its staff by one out of every six workers (Wethe & Carroll, 2015).
- In August 2016, Chesapeake-based Dollar Tree created 600 new jobs to reduce unemployment (Maier, 2016).
- The cost of living in Chesapeake is 3% higher than the average cost of living across Virginia and 11% higher than nationwide costs, with housing making the most difference (Chesapeake Cost Of Living Index, 2016).
- Chesapeake is characterized by significant unemployment benefits, which can demotivate the unemployed, making them less likely to seek work (Unemployment Benefits Info for Virginia, 2016).
Rationale
The Dollar Tree project is likely to lower Chesapeake’s unemployment rate in the short term. However, high housing costs can partially explain why the area is facing the issue in the first place. Additionally, the human factor can prevent people from searching for jobs when they can turn to unemployment benefits instead.
Recommendation
Federal representatives could reduce the geographical immobility of human resources by investing in affordable housing. The real value of unemployment benefits can also be reduced to create a stronger incentive to job-search.
References
Chesapeake Cost Of Living Index. (2016). Web.
Chesapeake, VA Unemployment Rate Report. (2016). Web.
Maier, B. (2016). Dollar Tree to invest $110 million, creating 600 new jobs in Chesapeake.
Unemployment Benefits Info for Virginia. (2016). Web.
Virginia Beach Area Economic Summary. (2016). Web.
Wethe, D., & Carroll, J. (2015). Chesapeake Guts Workforce to 10-Year Low on Gas-Price Rout. Web.