Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 7, 1993 TAG: 9302050006
SECTION: BUSINESS PAGE: D-1 EDITION: METRO
SOURCE: DANIEL HOWES STAFF WRITER
DATELINE: LENGTH: Medium
THE FIGURES LOOK GOOD, BUT OFFER LITTLE COMFORT
How come this economic recovery doesn't feel much like one?At least not in some households around the Roanoke Valley, where lay-offs and a bank takeover have peppered talk the past few months. Sure, the valley led Virginia in job creation during 1992, but the full whack from acquisitions and cutbacks still are largely to come.
Yet, the local numbers tell a different tale:
More than 2,800 valley residents were working in the October-through-December quarter than the quarter before, apparently buoyed by holiday hiring.
The valley's unemployment rate dropped to 4.5 percent in the fourth quarter from 5.1 percent during the previous three-month period.
Business licenses issued by valley governments increased 22.2 percent in the fourth quarter - even as business bankruptcies in Western Virginia continued.
Regional airlines operating out of Roanoke Regional Airport are slowly adding service, a sure sign business acitivity is improving in a market where business travelers account for 60 percent of the passenger traffic.
So what's the deal?
The numbers suggest valley residents should feel good about the local economy, confident the growth reflected in national statistics - the gross domestic product grew 3.8 percent in the fourth quarter - also is occurring here.
"I've talked to a great number of people who are looking for jobs and their situations are just not very optimistic," Mary Houska, a Hollins College economist, said last week.
"There's no doubt that the [850] jobs lost at Dominion [Bankshares Corp.] won't be easily replaced," she continued, explaining that losing full-time middle- and upper-management jobs usually is far more devastating to a local economy than the loss of part-time jobs.
Indeed, Houska - a labor economist who has spent years studying the Western Virginia economy - doesn't foresee many new opportunities for Dominion managers cast aside by the new bosses from Charlotte, N.C.-based First Union Corp.
And the younger those folks are, she said, the more likely it is they will "move away and take their families with them. The older the people are, the more likely they are to try and make do until retirement."
Come March, Dominion folks will start losing their jobs. "It won't be felt immediately; there will be severance packages. You're not going to see the full range of it until about six months after they lose their jobs."
No one's sure what the bank job cuts will mean for the local economy. Some folks worry a rash of "for sale" signs will glut the local housing market, driving down sale prices already dampened by slower-rising assessments.
Talk of a "reverse multiplier" - which happens when jobs and their salaries are cut from an economy - raises concerns of a ripple effect: Former Dominionites won't have the income to pay retailers, buy new homes, new cars and blue business suits and other goods.
Roanoke, long accustomed to being home to a large banking company, a major railroad and Virginia's largest hospital corporation, is finding its new role as a "branch-office town" to be fraught with economic travails beyond its control.
Sears, Roebuck and Co. hemorrhages and Roanoke loses 1,200 jobs when a national telecatalog center is closed; coal consumption abroad and weather patterns at home influences railroad business; an oversupply of banks and increasingly strict government regulation hastens the acquisition of its flagship bank by a North Carolina rival.
That's the reality of a global economy.