Chris Chmura was quoted in a recent article by Philip Walzer of the Virginian-Pilot about a study that Chmura Economics & Analytics prepared:

Local wages are below the national average, but poverty has inched down.

More residents are receiving college degrees, but the region's population growth lags the nation's.

These were among the findings in a report, "Hampton Roads State of the Workforce: 2010," released Thursday by Opportunity Inc., a regional work force agency.

Hampton Roads has been "temporarily impaired by the recession, but it s economic foundation remains strong," said Christina Chmura, a Richmond economist who compiled the study.

Chmura, who unveiled the report at a meeting at the Sheraton Norfolk Waterside Hotel, said the region boasts several economic advantages, such as its large military population. But her study said local leaders should work to improve transportation, increase the size of the work force and expand connections among employers, educators and job seekers.

The report collected a trove of statistics in areas from education to employment. Among the numbers:

Poverty. The poverty rate in Hampton Roads fell slightly, from 11.6 percent in 1990 to 11.1 percent in 2008. The rates for cities varied widely, from 19.5 percent in Norfolk to 7 percent in Virginia Beach.

Demographics. The region's population is more diverse than that of the state or the nation - an asset for employers, said Chmura, president of Chmura Economics & Analytics. About 30 percent of residents are black, more than double the national average. Hampton Roads also has a lower average age - 35 - probably because of the high concentration of military personnel, she said.

Population growth. Hamp-ton Roads recorded 0.19 percent average annual growth in population from 2004 to 2008, compared with 0.94 percent for the nation and 1.04 percent for the state. "It doesn't seem to be a problem," Chmura said. "When there have been periods of growth, people have come to this region" to fill jobs.

Wages. Last year, the average annual wage locally was $39,179, compared with $47,538 in Virginia. That, Chmura said, reflects the mix of industries in the area and the relatively low average age and cost of living.

College degrees. The number of people receiving degrees from local public two- and four-year colleges grew nearly 30 percent from 1995 to 2007, to 11,650. "The real challenge there is can we keep them?" Chmura said.

Public schools. Chmura pointed to a handful of promising trends, including a decline in the student-teacher ratio and increases in the percentage of students passing Standards of Learning math tests. The dropout rate, however, has risen and, at 2.3 percent, exceeds Virginia's 1.8 percent average.

Industry. Like the nation, Hampton Roads has experienced employment growth in the services sector, in areas such as health care and business services. But Chmura said the local shipbuilding industry has been robust, thanks to defense contracts, recording average annual job growth of 1.3 percent in the past five years, compared with a national decline of 0.4 percent.

CHRISTINE CHMURA TIMES-DISPATCH COLUMNIST
Originally published on June 7, 2010

The debt-to-GDP ratio of Greece reached 115 percent in April when Standard & Poor's downgraded its debt rating to junk status. One has to wonder if the United States could get to that point.

We've taken on a lot of debt over the past few years to bail out insurance companies, banks and auto manufacturers.

The American Recovery and Reinvestment Act alone is adding $787 billion to our debt load. The health-care changes are expected to reduce the deficit, but that is yet to be seen.

Based on the January 2010 Congressional Budget Office's projections, federal debt held by the public will hit $7.9 trillion in 2019. The debt-to-gross domestic product ratio will reach 77 percent by 2019 -- up from 33 percent in 2001. By comparison, the historical high of 109 percent was reached in 1946 during the aftermath of World War II.

Scenarios vary about how much the federal government debt will grow in 20 or more years because of uncertainties regarding spending and other factors, such as future interest rates and business cycles.

One scenario produced by the General Accountability Office shows our federal debt exceeding 109 percent of GDP around 2036. A second scenario that uses less-favorable assumptions about revenue and spending shows debt-to-GDP exceeding prior record levels by 2020 and exceeding 200 percent by 2030.

Aside from the risks to our debt rating, what does the higher load mean to the general public? It is likely that the large increases in government debt will put upward pressure on interest rates.

Chris Varvares of Macroeconomic Advisers modeled this situation in which the 10-year Treasury yield averages about 10.75 percent and the mortgage rate reaches 13 percent by 2030.

Clearly, homeownership will be out of reach for many prospective buyers. Cars and college education also will become less affordable.

More importantly for the broader economy, however, Varvares argues that the large amount of government debt increases interest rates to the degree that it discourages business investment, which leads to a reduction in productivity.

Less-efficient workers eventually lead to fewer job opportunities, increasing unemployment and stagnant wages. Such a scenario would reduce our standard of living.

Varvares concluded: "Our generation is on the verge of dooming the United States to second-class status unless we change our ways dramatically and soon."

Although scenarios vary on the timing of our rapidly growing federal debt, one theme is clear from those studying the potential impact of the debt on our economy:

The longer we wait to address the debt crisis, the more it will cost to get it back under control.

Chris Chmura was quoted in a recent article by David Ress:

The Richmond area's job market may have made a definite turn for the better, the latest Virginia Employment Commission data show.

Powered by a big jump in construction jobs and a reversal of recent declines in professional and business services, the region's unemployment rate fell to 7.5 percent in April from 8.3 percent in March, the commission reported yesterday. The rate was 7 percent a year ago.

"Construction was the biggest increase I've seen in a while, and the growth in professional and business services looks good," said Ann Lang, senior economist at the commission.

"It's looking positive."

But when adjusted for the usual spring variations in employment, the decline isn't that dramatic, and the rate remained stuck pretty much where it has been for the past several months, said Christine Chmura, president of Chmura Economics and Analytics.

"It's better that it's going down than going up," she said. "It is too soon to celebrate."

The Virginia rate fell to 6.7 percent in April from 7.6 percent in March, before accounting for typical seasonal variations. With those adjustments, the rate slipped to 7.2 percent from 7.3 percent.

Read the full article.

Leslie Peterson will be serving the Commonwealth of Virginia as a member of Governor McDonnell’s Commission on Higher Education Reform, Innovation, and Investment. As Governor McDonnell envisioned, “This Commission will play a pivotal role in the effort to make Virginia a more-highly educated state where businesses seek to locate and good jobs are available to our citizens in the communities they call home.

Read the full executive order.

Chris Chmura was featured on the cover of the Richmond Times-Dispatch metro business section on May 24, 2010. Click here to read the full article.

Joe Mahoney/Times-Dispatch

When economist Christine Chmura was a teen in Cleveland thinking about college, she did what anyone who knows her might expect:

She made a matrix. A list of schools on one hand, her criteria on the other. Then, she tallied up the checkmarks that showed which colleges met what she wanted.

Women's athletics: She was a runner.

Size: She was looking for a large university.

Agronomy: Yes, farming.

"I was an early environmentalist and saw myself doing research," Chmura explained. "I took an earth science class as a freshman in high school and did quite a bit of reading on environmental topics. . . . Soil erosion was a big topic related to environmental issues. Hence, agronomy. The study of soil was the important piece."

In the end, as only some economists might expect, there was a tie between the University of Arkansas and Clemson University.

And Chmura's response was what many of her clients say not enough economists do: Check with a real person. Her dad, in this case.

"She never forgets that the end of a study or an analysis is a person," said Sara J. Dunnigan, senior vice president at the Greater Richmond Partnership, the region's economic development agency.

Her dad, by the way, said Clemson. And she listened to him.

Full article

CHRISTINE CHMURA
TIMES-DISPATCH COLUMNIST
Published: May 10, 2010

Can lifting workers' skills make a difference in economic growth? The short answer is, yes.

An increase in the productivity of workers leads to more output (faster economic growth), which translates into higher living standards.

Using the results of a 2008 Bureau of Labor Statistics occupational analysis, we found that 30 percent of American workers have below-average qualifications. At that time, 150 million people were working in the nation. Among these, 45 million had below-average qualifications.

What if the nation could invest in improving worker skills at a time when the economy needs a sustainable boost?

What if President Barack Obama viewed heightening the skills of the work force as a means to spawn economic growth?

What if the nation could lift the skills of 10 percent of the below-average workers to average?

Our analysis suggests this investment would result in a:

• $46.7 billion increase in total wages;
• $14.7 billion increase in retail spending;
• $15.8 billion increase in federal taxes;
• 0.75 percent boost in productivity; and
• 1.12 percent decrease in the deficit at its current level that would have been a 9.8 percent drop based on the size of the deficit in fiscal 2007.

We also ran less optimistic scenarios, such as an upgrade in skills of 2 percent or 5 percent of workers with below-average qualifications.

The bottom line is that lifting skills can propel economic growth because it leads to more productive workers and faster growth for the overall economy.

Underemployment is a different issue in our economy that results in the underutilization of a worker's skills.

People are underemployed when they work in occupations that are below their level of training. College graduates, for example, who work as retail clerks or restaurant servers are underemployed.

We analyzed additional data and found pockets of highly skilled workers around the nation. Not surprisingly, attractive areas showed the greatest percentage of underemployed highly skilled workers.

Boulder, Colo.; San Francisco; and Washington were among the 10 metropolitan areas in the country with the most underemployment of highly skilled workers.

On the other hand, metro areas with less attractive characteristics, such as relatively high unemployment rates, had a shortage of highly skilled workers. (Go to http://www.chmuraecon.com and click on the map to get a ranking of all metro areas.)

For regions, this revelation may point to needed paradigm shifts in economic-development tactics.

Regional underemployment means there is a mismatch between supply and demand of workers by skill levels.

Regions with an oversupply of highly skilled workers can increase the wealth of their region by attracting firms that need highly skilled workers. The underemployed who obtain the new jobs will benefit from higher wages.

Regions with an undersupply of highly skilled workers need to elevate the skills of their work forces to become more efficient and effective, or these regions might lose the firms that need highly skilled workers.

These regions can benefit from boosting the skills of their workers to be more productive, thus increasing the profitability of firms and the disposable income of workers.

Whether lifting the skills of workers who have below-average qualifications or attracting firms to match a region's knowledge base, the result is the same: increased productivity, higher wages and, ultimately, faster economic growth.

These trends are needed to reduce the ballooning national deficit. But that deficit might put downward pressure on productivity, and that will be the topic of my next column.

This article was originally published in the Richmond Times-Dispatch.

Chris Chmura is quoted in a recent Richmond Times-Dispatch article by Carol Hazard:

Home values in the Richmond area continue to decline, although prices here and elsewhere may soon stabilize.

About 20 percent of homeowners with mortgages in the Richmond area are underwater, meaning their houses are worth less than what is owed on them, according to a first-quarter real estate market report by Zillow, an online data company.

What's more, houses here have lost 5.15 percent of their value from a year ago, falling to a median value of $195,600 in March, the report says. And 12 percent of all home sales in the Richmond area in March were foreclosure resales, putting downward pressure on prices here.

Nationwide, 23.3 percent of all single-family homes with mortgages were underwater in the first quarter, up from 22 percent a year ago, the report says. U.S. home values fell 3.8 percent from a year ago, according to Zillow. Foreclosures made up more than one-fifth, or 22.2 percent, of all U.S. home sales in March.

"I think the Richmond area will soon see prices start to rise again," said Christine Chmura of Chmura Economics & Analytics in Richmond.

"Richmond has fared better than many other regions around the country because our over-building was not as significant and prices did not rise as rapidly," she said. "As a result, our foreclosures rates are not as high."

The average price of a home sold in the Richmond area in the first quarter was $190,067, according to the Virginia Association of Realtors. It peaked at $268,237 in the second quarter of 2004.

Zillow's data on home values and appreciation is based on an index calculated as the median value of all homes in a geographic area, with half valued for more and half for less, not just homes that have recently sold. The data is then weighted according to population in each area. Data is aggregated from public sources in 135 metro areas.

Zillow chief economist Stan Humphries said he expects to see home values hit bottom in the third quarter.

"When we do get there, we expect the high rates of negative equity and foreclosures to keep national home value appreciation near zero for some time, possibly as long as five years," Humphries said.

That said, home values in large California markets, such as Los Angeles, San Diego, San Francisco, Santa Barbara and Ventura, have stabilized over the past year after reaching their lowest levels last spring.

"It's a very positive sign that several large markets have hit what appears to be a tentative bottom in home values," Humphries said. "While this is no guarantee that home values there will not fall again, it is more likely than not that they will remain above their lowest point last year."

The Richmond area was among 106 of 135 metropolitan markets tracked by Zillow that saw home values decline from a year ago.

Lacy Williams, a Realtor with Joyner Fine Properties, said the Richmond area has a large inventory of houses for sale -- a nine-month supply of single-family homes and a 10-month supply of condominiums and townhouses.

A healthy inventory is a fourto six-month supply, meaning it would take that long to sell all the houses at the current sales rate.

"If our inventory stays high, prices will continue to drop," Williams said. "The good news is there is a lot of activity. We were worried about the federal tax credits expiring last month, but we are still seeing a lot of sales."

Virginia had the seventh largest percentage of homes, about 24 percent, with mortgages in negative equity at the end of 2009, according to a report by First American CoreLogic.

Nevada had the highest percentage of negative equity, with 70 percent of its mortgaged properties underwater, followed by Arizona, Florida, Michigan, California and Georgia.

 

For Immediate Release 10:15 AM, Thursday, May 6, 2010

Richmond, May 6, 2010…Numerous American metro areas have severe gaps between job requirements and workers’ skills. Using 2008 data, Chmura Economics & Analytics published these gaps for each of the U.S. metropolitan areas. The 366 metro areas were ranked according to the largest surpluses or deficits in high-skilled workers. Atop the list was Boulder, Colorado where 19.9% of the workforce had high skills but an excess of jobs to use those skills did not exist in the metro area—compared to the typical occupation/education relationships in the nation. At the bottom of the list was Cape Girardeau-Jackson where over 20% of jobs in the metro area required high skills, but enough workers with those skills did not reside in the region.

The complete list is found here: http://www.chmuraecon.com/underempl.

Too many or too few workers with high-skills can be a problem. Too many high-skilled workers can result in underemployment which is when someone works in a position below his or her level of qualifications. Too few high-skilled workers can result in below-average job performances due to lack of proper training for the available jobs. Both situations hurt the potential productivity of a region. Reduced productivity means lower wages. As a result, the mismatch between workers’ skills and the skills needed by local firms deprives both individuals and regions of potential wealth.

(Go to http://www.chmuraecon.com/underempl/hires for a high-resolution version of the above graphic.)

“The number of underemployed workers typically increases during a recession because college graduates, for example, may end up taking jobs as retail clerks or restaurant servers just to pay the bills when they can’t find jobs in the occupations for which they were trained,” said Dr. Christine Chmura, President of Chmura Economics & Analytics. “Even during good economic times, pockets of underemployment exist around the county. As the nation comes out of recession, lower home prices (and lack of home equity) may hold back worker mobility which can intensify the misalignment between the skills of workers and the skills required by local firms.”

Can lifting skills of workers make a difference in economic growth? The short answer is, yes. This is because an increase in the productivity of workers leads to more output—faster economic growth—which translates into higher living standards. 

For regions, this revelation may point to needed paradigm shifts in economic development tactics. Regions with an oversupply of high-skilled workers can increase the wealth of their region by attracting firms that need high-skilled workers. The previously underemployed who obtain the new jobs will benefit from higher wages. Regions with an undersupply of high-skilled workers need to up-skill their current workforce to become more efficient and effective or these regions may lose the firms that need high-skilled workers. These regions can benefit when up-skilled workers become more productive, thus increasing the profitability of firms and the disposable income of workers. 

Technical Notes
Chmura's underemployment analysis is a comparison of educational attainment supply and demand in a given labor market. In the MSA underemployment ranking, each metropolitan area is taken as an independent labor market. Educational attainment supply within a region is the number of individuals in the labor force with various educational attainment levels (high school graduate, 2-year college degree, etc). Demand within a region is determined by the number and types of occupations currently employed at-place in the geographic area along with their typical educational makeup. Source data from the Bureau of Labor Statistics and the US Census Bureau are used in this analysis performed for the year 2008. Skill groupings are defined as follows: low skill - highest educational attainment of a high school diploma, equivalent, or lower; medium skill - highest attainment of a 2-year college degree, certificate, or some college and no degree; high skill - bachelor's degree or higher. 

Note that at least a portion of what appears to be underemployment may reflect higher standards for some occupations in some regions—for example, an occupation usually held by a person with a bachelor's degree in one metro may be typically held by someone with a master's degree in another metro. Nevertheless, the extent to which this is occurring produces a disparity in productivity between metropolitan areas, and the net effect in the nation—as with the case of underemployment—is still a loss of potential productivity. This is because a high-skilled worker is typically most productive in a job usually filled by a high-skilled worker compared to being in a job usually filled by a medium- or low-skilled worker.

For more information contact:
Christine Chmura 804.649.3640

A visitor profile study conducted by Chmura Economics & Analytics received recent coverage on VisitIthaca.com and ithacajournal.com:

New Study Paints Detailed Picture of Tompkins Tourists

Ithaca, NY-- After two years of research, the Tompkins County Legislator's Strategic Tourism Planning Board and the Ithaca/Tompkins Convention and Visitors Bureau will unveil a report, May 4, documenting the motivations, spending habits and demographics of Tompkins County visitors.

The comprehensive research project used proprietary lodging data, public economic statistics, detailed surveys and hundreds of in-person interviews to create a statistically accurate profile of Tompkins visitors. The information is critical to the tourism community, local restaurant owners and specialty retailers who rely on visitors for a significant portion of their revenues.

Among the report's findings, the county attracted more than 840,000 visitors in 2009, generating $156 million in associated spending and supporting more than 2,300 jobs. Visitors spent an average $185 per person, per trip in 2009 with 35% of their spending going to food and drink, 28% to lodging and 25% to shopping. Visitors tend to be highly educated with high household incomes. Cornell, the county's gorges/waterfalls, the downtown Commons and the local dining scene are ranked as the top visitor attractions.

"This study validates many assumptions we've been making over the years and provides numbers to back them up," said Fred Bonn, director of the Ithaca/Tompkins visitors bureau. "You need hard data to make smart decisions and this report provides us real detail to move forward."

The comprehensive research project was commissioned by the county's Strategic Tourism Planning Board and funded by the county Tourism Program, with project management from the Ithaca/Tompkins CVB. Research firm Chmura Economics and Analytics conducted the study and authored the final report. The Chmura report is the first detailed look at Tompkins County visitors in almost a decade. The county last surveyed visitors in 2002.

The business community and interested members of the public are invited to attend the report release presentation, May 4, at the downtown Holiday Inn, 222 South Cayuga Street. Representatives from Chmura Economics and Analytics will outline the results, methodology and implications of the report. Event registration is free. Doors open at 8:30am. Program starts at 9:00.

Digital copies of the 135-page report will be distributed free of charge at the presentation, followed by an online release in the News/Media section of VisitIthaca.com. For information, contact Fred Bonn at the Visitors Bureau, (607) 272-1313, fred@visitithaca.com.

Chris Chmura was recently quoted in Reseeding Virginia’s tobacco region

The program also is a good deal for Virginia’s former tobacco region, which stretches across 41 counties and cities in Southern and Southwest Virginia. The region has been stuck for decades with an anemic economy in which employment growth has been slow or nonexistent. In the 12 years from 1997 to 2009, Virginia averaged 1.2 percent annualized growth in employment, according to data from Chmura Economics & Analytics, a Richmond-based firm. In that same period Southern Virginia averaged 0.7 percent annualized drop in jobs, while Southwest Virginia had zero job growth. The steep drop in tobacco production and the loss of manufacturing and textile jobs — and the deep recession of 2008 — has made things even tougher. “If you don’t go to college, what’s open to you would probably be retail or factory,” Farrar says.