Recent V.I. employment and wage data show unemployment rates down slightly, with the territory doing slightly better than many states, yet still mired in a stagnant economy.
As of June, the territory as a whole had an unemployment rate of 8.1 percent – up a hair from 7.9 percent in June 2009, according to V.I. Labor Department data.
St. Croix ‘s unemployment rate dropped from 9.3 percent to 9.0 percent over that one-year span, while St. Thomas/St. John’s unemployment rate increased from 6.8 percent to 7.5 percent.
But the number of people actively seeking work has gone down, and the number of people who actually have jobs has gone down more than the formal rate of employment.
From June to June, the territory’s workforce shrank 3.8 percent, shedding just over 2,000 jobs—roughly 1,000 from each district. But St. Croix’s labor force was smaller to begin with, so St. Croix lost a larger percentage of its total, suffering a 4.4 percent decrease in employment to St. Thomas’ 3.3 percent decrease.
The June-to-June figures are similar to recently released U.S. Bureau of Labor Statistics figures from December 2008 to December 2009. During that period, V.I. employment dropped 3.7 percent – somewhat better than the 4.1 percent drop in employment nationwide over the same period.
"This year, the numbers are a little better than last year, with our unemployment rate actually trending downward," Labor Commissioner Albert Bryan said Tuesday. "Once the U.S. rate passed ours, we haven’t passed them again."
Why is the St. Croix unemployment rate higher and the employment rate shrinking more than the St. Thomas/John rates? Bryan points to the larger tourism industry on St. Thomas.
"On St. Croix, there are not a lot of entry-level jobs, and 40 percent of the workforce has no high school diploma," he said. "That is not as much of a barrier for tourism-related jobs on St. Thomas."
Getting in the door for an entry-level job is one of the hardest hurdles, he said. While Hovensa and the V.I. Government may need employees, "if you cannot pass their safety test, you are not getting into Hovensa," he said. But if you can get in the door, you have a chance to progress on the job. In restaurants and hotels, a person with no diploma can start as a busser or dishwasher or groundskeeper – or drive a taxi or work on a golf course. Those jobs exist on St. Croix too, but in much fewer numbers.
"We need entry-level employment options and tourism at least allows people a foot into the door," he said.
For the near future, some signs look good while others are less comforting. On the bright side, initial claims for unemployment are much lower than last year, Bryan said. At the same time, the number of workers who have exhausted their benefits but remain unemployed is climbing.
"Our exhaustion rate use to be 30 to 35 percent on average, and now it is like 60 percent," Bryan said. Only two cities have higher rates, he said.
Declines in tourism have been less steep than anticipated and may turn around fairly quickly too, he said. But over the longer haul, St. Croix needs more big construction projects and more tourism, and the territory would benefit from stimulus aimed at the housing industry.
Construction jobs on St. Croix are beginning to peter out since Hovensa recently completed a large project and work on the new Diageo refinery has slowed, he said. Nothing else is slated until next year, when construction on St. Croix’s Home Depot is slated to begin.
"Where are the projects? We need construction to pick up, that’s where we really get employment," he said.
And banks need to start lending again.
"All the merchants are complaining they can’t get loans," he said.
Over the next year or two, we can expect the economy to stumble along.
"We are going to have little spikes, but we will probably be sputtering along on the bottom a lot," he said.
Still, while many are suffering, the territory has been insulated from the worst of the recession, Bryan said. Many states have been forced to lay off teachers, police officers and firefighters due to falling tax revenues, and those layoffs have contributed to a downward economic spiral, as paychecks stop being cashed and spent in stores and on rent.
But the territory’s government employs an extraordinarily high 26 percent of the workforce and was able to float bonds and avoid laying off any employees, so it has avoided those injuries so far, Bryan said.
"The secret of our success so far is tourism activity and the government," he said. "That is what is keeping us afloat."
