OUR JOBS ARE ALSO YOUR JOBS:
Economic Interdependence in Hampton Roads
Vinod Agarwal and James V. Koch
Strome College of Business
Old Dominion University
Jobs are important. Anyone inclined to doubt this should talk to those who are unemployed,
or to elected officials and economic development directors. Such individuals have no difficulty in
understanding that job growth translates into income, tax collections, and rising living standards.
For the Hampton Roads Economic Development Allianc e
August 27, 2015
These are among the reasons why cities and counties are very sensitive to the number of jobs that are already located
within their boundaries, whether new firms choose to locate within their jurisdictions, and when existing firms opt to expand
their operations. Their reasoning is straightforward---more is better if their city or county is the direct beneficiary of the new
jobs. Consequently, city and county representatives often argue strenuously in favor of any project that promises to increase
the number of jobs in their specific jurisdiction.
Such thinking does contain significant elements of truth---more often than not, increased jobs within a city or county
make that city or county and its citizens better off. What is not on target, however, is the supposition that the new jobs must
be generated by projects actually located inside the boundaries of that city or county. In fact, jurisdictions can benefit
significantly when: (a) they enjoy the economic ripple effect that accompanies new or expanding firms that have chosen to
locate in another city or county; (b) their citizens occupy attractive jobs in other cities and counties, but spend most of their
incomes where they live; and, (c) they do not have to pay for expensive infrastructure, the provision of increased public
services, and the tax-free status that accompany some jobs.
Despite (a), (b), and (c), it is commonplace for mayors, city council members, and economic development directors to act as if
the only really good economic development project is the one that is located squarely inside their own city or county.
However, in previous studies for the Hampton Roads Economic Development Alliance (HREDA) in 2002, 2005, and 2009, we
demonstrated that Hampton Roads is a highly interdependent economic region and the fruits of economic activity are broadly
shared across the region. This is true because:
1

Almost two-thirds of all workers in Hampton Roads move out of their city or county when they go to work.

Economic developments in one city or county have significant spillover effects that confer benefits on virtually every
other city or county in the region.

Intricate supply relationships exist among businesses and governments in the region. Not only does one city or county
typically hire workers from other cities and counties, but also that city or county purchase inputs range from electricity
and gasoline to computers and food from other cities and counties. Just as no man is an island unto himself, no city or
county in Hampton Roads stands alone, economically speaking.1
Apologies to John Donne.
2
This has been true for many years. In our 2009 report, we observed that:
The cities and counties of Hampton Roads continue to exhibit a very high level of economic
interdependence. Economically, they continue to function as a single, large city in which some
portions of the region predictably specialize as residential locations, while others specialize as job
and work locations. Williamsburg and Norfolk host more jobs than they have residents, while the
citizens of the cities of Gloucester, Poquoson and Suffolk earn higher than average incomes by
commuting to jobs in other locations. The region’s job commuting patterns, however, cause the
benefits of any job cluster to be widely diffused among the cities and counties of Hampton Roads.
WHERE INDIVIDUALS LIVE AND WHERE THEY WORK
Consider this: currently, slightly more than 65 percent of all workers in Hampton Roads commute outside of
their city or county boundaries to reach their place of employment. This represents an increase from approximately
61 percent in 2009 and less than 60 percent in 2002 and 2005.
In fact, our region’s cities and counties have become even more economically interdependent upon each other.
For example, as Table One below reveals:

27.16 percent of those employed in Norfolk are residents of Virginia Beach and this exceeds the 26.46 percent of
workers in Norfolk who actually live in that city.

17,776 workers commute from Chesapeake to Virginia Beach for their jobs.

On average, when 100 new jobs appear in Portsmouth, 19 of those workers come from Chesapeake, 10 come from
Norfolk, 8 come from Suffolk, and 7 come from the Peninsula.

Hampton attracts 9,173 workers from Newport News, while Newport News attracts 13,893 workers from Hampton.

Residents of Williamsburg occupy less than 8 percent of the jobs in that city.
3
Table One provides a treasure trove of useful data because it reports where individuals live as well as where they work
in Hampton Roads. If one reads across the rows of Table One, one can see where specific cities and counties obtain the
workers who fill the jobs in that city or county. Consider the example of Virginia Beach, which hosts 157,732 jobs according to
the Bureau of Economic Analysis of the U.S. Department of Commerce. One can see that 11.27 percent of those workers filling
jobs in Virginia Beach commute into that city from Chesapeake, while 10.09 percent come from Norfolk. More than one-half of
Virginia Beach’s jobs (54.60 percent) are filled by residents of Virginia Beach. (This is the darkened entry in the Virginia Beach
row.) Fully 12.89 percent of Virginia Beach’s workers commute into Virginia Beach from outside of Hampton Roads.2
Reading down the columns of Table One, one can see where a particular city or county sends its workers. Let’s focus on
Hampton, where we can read that 31.13 percent of its employed individuals work inside that city. (This is the darkened entry
in the Hampton column.) However, as noted above, 13,893 (16.01 percent) commute to Newport News. Additionally, we can
see that 21.40 percent of Hampton’s employed individuals cross the water and go to work in a city or county on the Southside.3
Figure One provides a visual representation of the flow of workers into Virginia Beach from other cities and counties in
Hampton Roads. Figure Two provides the same information for Newport News. Figure Three provides a visual representation
of where residents of Norfolk go to work. Note that only 26.46 of Norfolk’s workers stay in the City of Norfolk.
This estimate must be treated with care. Active duty military personnel often keep their home state address while they are billeted in Hampton
Roads. In reality, they live somewhere in our region (perhaps Virginia Beach) and commute to their jobs, but the Census still considers them to be
residents of their home state.
3 Parenthetically, this is a rough, but very useful measure of the extent to which the City of Hampton might be vulnerable to the imposition of tolls on all
of the James River crossings in Hampton Roads.
2
4
Table One
WHERE PEOPLE LIVE AND WORK IN HAMPTON ROADS
Number of
Jobs
Gloucester Cty
Isle of Wight Cty
James City Cty
Mathews Cty
Surry Cty
York Cty
Chesapeake
Hampton
Newport News
Norfolk
Poquoson
Portsmouth
Suffolk
Virginia Beach
Williamsburg
Franklin
Currituck Cty NC
Southampton Cty
8,637 42.03% 0.46% 3.24% 5.04% 0.01% 3.70% 0.88% 2.40% 7.36% 0.96% 0.57% 0.88% 0.75% 2.12% 0.41% 0.03% 0.02% 0.21%
8,898 0.15% 30.41% 1.30% 0.27% 2.28% 1.17% 3.90% 5.75% 9.84% 2.03% 0.26% 5.21% 13.09% 2.09% 0.15% 1.31% 0.26% 3.15%
21,581 3.62% 0.82% 32.05% 0.76% 0.88% 7.63% 1.11% 3.37% 12.83% 0.92% 0.62% 0.95% 1.07% 2.01% 3.00% 0.10% 0.04% 0.22%
1,111 13.05% 0.18% 1.35% 34.74% 0.09% 1.80% 1.08% 1.80% 3.24% 0.63% 0.45% 0.36% 0.45% 0.81% 0.09% 0.18% 0.18% 0.00%
2,481 1.53% 8.30% 3.71% 0.36% 23.34% 2.86% 3.75% 2.54% 5.48% 1.13% 0.52% 1.61% 2.66% 4.43% 0.36% 0.16% 0.08% 1.33%
18,407 5.85% 1.44% 11.69% 0.72% 0.26% 20.93% 1.54% 8.21% 18.44% 1.48% 2.11% 1.48% 1.35% 2.86% 1.81% 0.10% 0.03% 0.22%
94,677 0.36% 1.08% 0.53% 0.08% 0.05% 0.01% 30.93% 2.38% 2.48% 9.96% 0.10% 7.15% 4.90% 22.89% 0.10% 0.07% 1.34% 0.13%
51,049 1.48% 2.24% 2.40% 0.25% 0.04% 6.60% 4.53% 31.13% 17.97% 5.11% 2.14% 2.56% 2.75% 6.65% 0.28% 0.05% 0.06% 0.09%
86,670 3.59% 3.61% 3.33% 0.49% 0.08% 7.51% 3.59% 16.03% 30.31% 2.96% 1.63% 2.62% 3.47% 4.75% 0.34% 0.09% 0.09% 0.18%
124,720 0.06% 0.91% 0.69% 0.10% 0.03% 0.75% 14.21% 3.38% 2.73% 26.46% 0.15% 5.34% 3.60% 27.16% 0.12% 0.03% 0.57% 0.08%
1,872 2.08% 1.44% 1.66% 0.21% 0.00% 12.07% 2.08% 12.34% 14.26% 1.55% 36.32% 1.34% 1.39% 3.31% 0.11% 0.00% 0.05% 0.16%
30,467 0.21% 2.14% 0.42% 0.06% 0.06% 0.50% 19.14% 2.81% 3.07% 9.87% 0.07% 27.14% 8.27% 13.82% 0.06% 0.08% 0.64% 0.15%
20,633 0.60% 5.58% 0.90% 0.11% 0.27% 0.99% 11.68% 2.38% 3.64% 4.60% 0.20% 8.11% 32.56% 7.81% 0.08% 1.20% 0.42% 2.22%
157,732 0.27% 0.58% 0.49% 0.06% 0.00% 0.47% 11.27% 1.58% 1.62% 10.09% 0.09% 3.02% 2.09% 54.60% 0.09% 0.00% 0.71% 0.08%
16,224 4.81% 0.76% 29.70% 0.55% 0.91% 10.87% 1.07% 3.59% 16.54% 1.11% 0.65% 1.02% 0.96% 1.82% 7.36% 0.07% 0.02% 0.22%
4,049 0.22% 6.35% 0.42% 0.15% 0.67% 0.35% 2.54% 0.44% 1.51% 1.43% 0.10% 2.62% 10.13% 2.07% 0.00% 21.02% 0.15% 24.57%
5,563 0.00% 0.16% 0.02% 0.02% 0.00% 0.09% 5.14% 0.14% 0.14% 0.72% 0.02% 0.63% 0.70% 4.48% 0.04% 0.16% 35.99% 0.02%
3,366 0.12% 4.31% 0.12% 0.00% 1.13% 0.24% 1.31% 0.33% 0.56% 0.89% 0.03% 1.63% 3.39% 1.22% 0.03% 9.24% 0.12% 43.85%
Citation: U.S. Census Bureau. 2013. OnTheMap Application. Longitudinal-Employer Household Dynamics Program. http://onthemap.ces.census.gov/
http://lehd.ces.census.gov/applications/help/onthemap.html#!what_is_onthemap
Destination Analysis in 2011 by Primary Jobs
Primary Jobs: Public and private-sector jobs, one job per worker. A primary job is the highest paying job for an individual worker.
5
Outside H.R.
Southampton County
Currituck County, N.C.
Franklin
Williamsburg
Virginia Beach
Suffolk
Portsmouth
Poquoson
Norfolk
Newport News
Hampton
Chesapeake
York County
Surry County
Mathews County
James City County
Isle of Wight County
Here Is Where The Workers Live (Percent)
Gloucester County
Worker Job Location
28.92%
17.36%
28.00%
39.51%
35.83%
19.51%
15.46%
13.69%
15.31%
13.64%
9.62%
11.47%
16.66%
12.89%
17.97%
25.27%
51.54%
31.49%
Figure One
The Sources of Virginia Beach’s Workers
Chesapeake
All Others
11.27%
16.73%
1.58%Hampton
1.62%Newport News
Norfolk
10.09%
3.02%
2.09%
Suffolk
Virginia
Beach
54.60%
In 1776, Adam Smith authored his classic, The Wealth of Nations.4 One of Smith’s many insights was that the size of a
market has a profound influence upon many critical economic variables. Market size affects the ability of firms to realize
economies of scale in production and supply, shapes the extent to which highly valued specialty workers and products can be
supported, permits the realization of agglomeration effects such that a critical mass of firms and workers arises and begins to
act as a magnet (à la Silicon Valley acting as a cluster) that attracts additional firms and workers, and helps determine the
likelihood that a monopolist will emerge. In a nutshell, while Smith acknowledged some of the problems that can arise as the
sizes of cities and metropolitan regions increase, he came down firmly on the side of the benefits of growing market size
exceeding the associated costs.
4
Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Oxford: Oxford University Press, 2008), originally published in 1776.
6
Figure Two
The Sources of Newport News Workers
3.59% Chesapeake
16.03% Hampton
All Others
36.27%
30.31%
Newport News
4.75%
Virginia
Beach
3.47%
2.96% Norfolk
Suffolk 2.62%
7
Figure Three
Where Residents of Norfolk Go to Work
9.96%
30.86%
All Others
5.11% Hampton
2.96%
Newport
News
Virginia
Beach
10.09%
26.46% Norfolk
Suffolk
4.60%
9.96% Chesapeake
Smith’s metropolitan economic development story, which has received strong empirical support in studies
over the last fifty years, provides a clear message. Economically speaking, we would be wise to treat Hampton Roads
as one, large, interdependent economic unit. This is true because: (a) a clear majority of our workers already ignore
city and county boundary lines, (b) the economic benefits of any project of economic consequence inevitably spill
across city and county lines, and (c) thinking and behaving regionally will make us more productive and wealthy.
Figuratively, we shoot ourselves in the foot if we succumb to parochial urges and ignore (a), (b) and (c).
8
HREDA’S ROLE IN GENERATING NEW JOBS IN HAMPTON ROADS
The Hampton Roads Economic Development Alliance (HREDA) is the only organization in our region that is solely focused
upon attracting and retaining regional jobs. Of course, there are many other organizations concerned with regional jobs, for
example, the Hampton Roads Chamber of Commerce and the Virginia Peninsula Chamber of Commerce, but they have other
goals and responsibilities in addition to their jobs focus and do not always adopt a regional focus with respect to their efforts.
Member cities and counties make financial contributions to support the job attraction and maintenance efforts of
HREDA. When a success occurs, that success typically is the result of the combined efforts and cooperation of a variety of
organizations, including HREDA, city and county economic development organizations, the Commonwealth, educational
institutions, etc. The participation of so many different organizations necessarily means that credit for successes legitimately
should be shared.
With this in mind, Table Two reports HREDA’s (and the region’s) successes, 2007-2015. HREDA was actively
involved in attracting 40 new firms to Hampton Roads. These 40 firms had initial employment of 3,103 and
collectively invested $334.91 million in new plant and equipment in our region.
Table Two
Instances of Companies Attracted to Hampton Roads, 2007-2015
Where HREDA Was a Major Participant in the Process
Year
2007
2007
Company
Astute Electronics
Description
Distribution of electronics for British Company
Jobs
4
Capital
Investment
$250,000
AvalonBay Customer Care
Shared services center for REIT
130
$1,250,000
Earthcore/Schiedel
Manufacturing & distribution of fireplace & chimney systems
(International)
Defense and Modeling & Simulation (Air & Space Operations
Center Weapon System Integrator Program)
Freezer warehouse for frozen foods
30
$10,000,000
90
$2,400,000
45
$30,000,000
2007
Lockheed Martin
2007
2007
Preferred Freezer
$43,900,000
TOTAL 2007
5
299
9
Year
2008
2008
2008
2008
Description
Field office for Canadian Modeling & Simulation Company
Safco Products Company
Distribution of office furniture & supplies
40
$17,000,000
Cryomax
Distribution of automotive radiators for Chinese company
20
$720,000
Eurus Blower
Sales Office/Warehouse for Chinese industrial equipment firm
3
$100,000
64
$17,820,000
TOTAL 2008
Year
2009
2009
2009
2009
2009
4
Jobs
1
Capital
Investment
Company
CAE Professional Services
Company
Becker Solutions Corp
Description
German Based North American Sales Office
Jobs
3
Capital
Investment
$250,000
COBHAM Composite Products (Sparta)
Civil, Aerospace Defense Manufacturing
206
$9,100,000
IP Configure
Surveillance & Training
5
$250,000
Art Institutes
Education
60
$8,400,000
MASA
Modeling & Simulation (French Company)
20
$750,000
294
$18,750,000
Capital
Investment
$4,000,000
5
TOTAL 2009
Year
2010
2010
2010
2010
2010
Company
Orion Air Group
Description
Aviation services
Jobs
51
Doyon Government Group
Security, project management and logistical support
170
Swedish Match
Distribution of tobacco products
32
$1,200,000
Laurence Walter Aerospace Solutions
Repair and Overhaul of Aircraft Components
10
$1,000,000
5
$2,000,000
268
$8,200,000
Hectronic
5
TOTAL 2010
Year
Company
Description
Jobs
Capital
Investment
2011
Katoen Natie
Warehousing & distribution
225
$12,000,000
2011
ESS
Engineering & consulting
2
N/A
2011
Caspari
R&D, Sales, Assembly, Distribution
50
$500,000
2011
BMZ
Distribution
32
$750,000
2011
Best Brakes
Distribution
25
N/A
10
2011
Ace Hardware
Distribution
75
$14,000,000
2011
Green Mountain Coffee Roasters, Inc.
(Keurig)
Advanced Manufacturing
800
$180,000,000
1,209
$207,250,000
Jobs
Capital
Investment
TOTAL 2011
7
Year
Company
Description
2012
Superior Quality Manufacturing (SQM)
Electronic devices for transportation systems
20
$1,000,000
2012
MCO Transport, Inc.
Container transportation services
25
N/A
2012
Bookkeeping Express
Accounting & Bookkeeping services
25
N/A
2012
AMAC Leasing LLC
Asphalt Manufacturing and aggregate distribution
50
$5,000,000
120
$6,000,000
Jobs
Capital
Investment
TOTAL 2012
4
Year
Company
Description
2013
Grandwatt Electric Corporation
Manufacturer of power generators
50
$10,000,000
2013
Cosentino North America
Fabricator & distributor of natural stone surfacing
17
$2,200,000
2013
Prufrex USA, Inc.
Manufacturer of ignition components
60
$7,330,000
2013
Atomized Products Group
Manufacturer of metal powders & battery expanders
26
$4,300,000
2013
Hampton Farms
Peanut butter processor
60
$5,500,000
2013
Carson Helicopters
TOTAL 2013
Manufacturer of composite rotor blades
6
20
$500,000
233
$29,830,000
Year
Company
Description
Jobs
Capital
Investment
2014
Liberty-Source PBC
Business process outsource provider
596
$1,560,000
2014
Becker
10
$500,000
2014
Pacorini
TOTAL 2014
3
Year
Company
Description
2015
Haulotte North America
Manufacturer of aerial work platforms
10
$500,000
616
$2,560,000
Jobs
Capital
Investment
67
$600,000
YTD 2015
1
67
$600,000
2007 - 2014
40
3,103
$334,910,000
11
What has been the economic impact of these firms in Hampton Roads? Table Three divides the estimated economic
impact of these new firms into three parts (A, B, C and D) and then cumulates those values, 2007-2015, in E.
Part A of Table Three records the value of the plant and equipment the new firms invested in Hampton Roads, 20072015. By itself, this is an impressive number, $334.91 million. These construction and purchase expenditures were one-time
only and Part B estimates the incomes that have been earned both by construction workers, etc., involved in these projects and
the incomes earned by the spinoff effect of these workers spending their wages and the expenditures of workers in regional
firms that supply equipment, food, fuel, etc., to the construction process. We have used Census data to estimate the wages
earned by these workers. Once again, the economic impact is large---$105.27 million spread over 2007-2015. These are
non-recurring, one-time only economic benefits.
Part C focuses on the incomes earned by the 3,170 individuals employed at the 40 new firms. Either the actual reports
of the firms involved, or Census data have been used as the basis for estimating the total direct economic impact ($159.39
million) of the wages of these employees.
Similar to the situation for construction and equipment expenditures, there are spinoff economic effects because these
3,170 new employees will spend their incomes and regional firms will supply them with items ranging from automobiles to
pizzas. The spinoff effects are considerable---$96.87 million between 2007 and 2015.
Part E adds Parts A, B, C and D for each year and cumulates these totals over the entire 2007-2015 time period. This
assumes that the new firms have neither disappeared, contracted, nor expanded over the time period. This may not be
factually true, but is a necessary assumption because many firms jealously guard their employment and compensation levels.
12
Table Three
(1)
(2)
(3)
A
(4)
(5)
(6)
B
One-Time
Only
One-Time
Only
One-Time
Only
Permanent
(7)
(8)
(9)
(10)
C
D
Average
Average
Permanent
(11)
(12)
E
Capital
Direct
Spinoff
Economic
New
Compensation
Per
Permanent
Economic
Spinoff
Compensation
Per
Permanent
Cumulative
Economic
Value
Year
Investment
Jobs
Jobs
Value
Jobs
New Job
Value
Jobs
Spinoff Job
Value
(2)+(5)+(8)+(11)
2007
$43,900,000
436.13
261.68
$36,285,600
299
$66,560
$18,824,000
179.4
$49,400
$8,862,360
$107,871,960
2008
$17,820,000
133.65
80.19
$8,767,440
64
$52,922
$3,387,000
38.4
$50,100
$1,923,840
$31,898,280
2009
$18,750,000
164
98.4
$11,020,800
294
$62,595
$18,402,800
176.4
$49,250
$8,687,700
$56,861,300
2010
$8,200,000
67
40.2
$4,609,600
268
$53,887
$14,441,700
160.8
$49,100
$7,895,280
$35,146,580
2011
$207,250,000
272.5
163.5
$19,184,000
1,209
$57,194
$69,147,000
725.4
$50,700
$36,777,780
$332,358,780
2012
$6,000,000
57.5
34.5
$4,140,000
120
$56,875
$6,825,000
72
$51,600
$3,715,200
$20,680,200
2013
$29,830,000
256.73
154.04
$18,894,960
233
$57,596
$13,419,900
139.8
$52,300
$7,311,540
$69,456,400
2014
$2,560,000
27
16.2
$2,030,400
616
$44,911
$27,665,305
369.6
$52,900
$19,551,840
$51,807,545
2015
$600,000
4.5
2.7
$338,400
67
$91,000
$6,097,000
40.2
$53,400
$2,146,680
$9,182,080
$334,910,000
1,419.01
851.41
$105,271,200
3,170
$159,385,705
1,902
$96,872,220
$715,263,125
The cumulative total, $715.26 million is impressively large when compared to the approximate $30 million in
funds HREDA expended between 2007 and 2015. Roughly speaking, this represents a 23:1 regional payback ratio on
funds invested in HREDA.
Of course, other cities, counties and organizations deserve joint credit with HREDA for the impressive 23:1
performance. This analysis demonstrates, however, that there is a positive payoff to regional economic development efforts
and that HREDA is a vital and productive part of this process.
13
AN INSTRUCTIVE EXAMPLE: A PORT-RELATED WAREHOUSE DEVELOPMENT
The Port of Virginia, along with defense spending and tourism, constitutes one of the three major legs underpinning our
regional economic stool. Recently, the Port has supplied badly needed new economic thrust to Hampton Roads and nearly
every month establishes a new record for handling cargo. This has stimulated the demand for warehouse and distribution
center space in Hampton Roads.
The City of Suffolk boasts 12.3 million feet of industrial and warehouse space, but in early 2015, more than 95 percent
of that space was occupied. No empty space was available that exceeded 250,000 feet.5 Suppose a firm such as Costco, Target,
or Wal-Mart decides to open a new port-related 500,000 square feet warehouse that will employ 250 individuals. How will
this impact Suffolk and the remainder of the cities and counties in Hampton Roads? Let’s set aside construction costs and
concentrate upon those who will work at the new facility. Let’s assume that the 250 jobs (including those of managers) will
pay an average of $50,000 per year. To keep things simple, we’ll ignore the value of fringe benefits. Table Four reveals where
those who hold these jobs are likely to be located and how much income they will earn.
5
See J. Elias O’Neal, “West Coast Port Problems Create Boom for Hampton Roads Warehouses,” Daily Press (April 6, 2015), www.dailypress.com.
14
Table Four
Jobs and Incomes Earned at a New 250 Employee
Warehouse/Distribution Facility in Suffolk
City or County
Number of Jobs
Incomes Earned
Additional Sales Taxes Received
Gloucester County
Isle of Wight County
James City County
Mathews County
Surry County
York County
Chesapeake
Hampton
Newport News
0.15
13.95
2.25
0.275
0.675
2.475
29.2
5.95
9.1
$7,500
$697,500
$112,500
$13,750
$33,750
$123,750
$1,460,000
$297,500
$455,000
$307.50
$28,597.50
$4,612.50
$563.75
$1,383.75
$5,073.75
$59,860.00
$12,197.50
$18,655.00
Norfolk
Poquoson
Portsmouth
Suffolk
Virginia Beach
Williamsburg
Franklin
Currituck County NC
Southampton County
Outside Hampton Roads
11.5
0.5
20.275
81.4
19.525
0.2
3
1.05
5.55
42.97
$575,000
$25,000
$1,013,750
$4,070,000
$976,250
$10,000
$150,000
$52,500
$277,500
$2,148,500
$23,575.00
$1,025.00
$41,563.75
$166,870.00
$40,026.25
$410.00
$6,150.00
$2,152.50
$11,377.50
$88,088.50
Totals
249.995
$12,499,750
$512,489.75
15
Note that we estimate that five other jurisdictions (Isle of Wight, Chesapeake, Norfolk, Portsmouth and Virginia Beach)
would gain more than ten job holders each (see Figure Four). Thirteen cities and counties would have at least one worker
employed at the new Suffolk warehouse/distribution facility. The economic impact would be significant. By way of
illustration, the total wage income earned by workers living in Chesapeake would total $1,460,000 (see Figure Five).
Interestingly, however, the economic impact of the new facility on regional cities and counties doesn’t stop there. The
250 employees will spend their wages and the warehouse/distribution facility will purchase supplies from area businesses.
This creates additional economic activity. Table Five incorporates these “spillover” effects and uses common estimates of the
size of those effects in order to generate the employment and income estimates contained in the table. Note, for example,
that we predict that Virginia Beach would add a total of 31 new jobs because of the new warehouse/distribution
facility in Suffolk, even though that facility would be 20 or more miles away. These 31 job holders would earn an
estimated $1,562,000 in income, most of which would be spent in Virginia Beach, not Suffolk. Based upon the usual
distribution of expenditures among taxable categories, the City of Virginia Beach likely would receive $64,042 in
additional sales taxes collections because of the new Suffolk facility.
The single largest economic beneficiary, of course, would be Suffolk, but even the Peninsula emerges a winner: 33.59
additional jobs and $1,269,500 in additional employee incomes---most of which will end up being spent on the Peninsula.
Figure Four illustrates the regional distribution of jobs associated with the new warehouse/distribution facility, while Figure
Five estimates the incomes earned by the employees of this new facility.
We hasten to point out that our analysis assumes that the distribution of new jobs produced by the new warehouse/distribution
facility matches the existing pattern of jobs in terms of where people choose to live and work. We also assume that each job is worth
$50,000 though the actual numbers might be higher or lower. Thus, were an actual 250 employee facility to open in Suffolk, reality
might be a bit different, though not markedly so, from the estimates presented in Tables Four and Five. The basic principle
underpinning the tables---that the benefits of economic expansion in one city and county are widely distributed throughout our region--is supported both by Census data, previous studies, and casual observation. When more than 65 percent of individuals cross city
and county lines in order to travel to their place of employment, it is inevitable that economic benefits will be widely diffused.
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Table Five
Jobs and Incomes Earned at a New 250 Employee
Warehouse/Distribution Facility in Suffolk
Including Spillover Effects
City or County
Number of Jobs
Incomes Earned
Additional Sales Taxes Received
Gloucester County
Isle of Wight County
James City County
Mathews County
Surry County
York County
Chesapeake
Hampton
Newport News
Norfolk
Poquoson
Portsmouth
Suffolk
Virginia Beach
Williamsburg
Franklin
Currituck County NC
Southampton County
Outside Hampton Roads
0.39
22.32
3.6
0.44
1.08
3.96
46.72
9.52
14.56
18.4
0.8
32.44
130.24
31.24
0.32
4.8
1.68
8.88
68.752
$19,500
$1,116,000
$180,000
$22,000
$54,000
$198,000
$2,336,000
$476,000
$728,000
$920,000
$40,000
$1,622,000
$6,512,000
$1,562,000
$16,000
$240,000
$84,000
$444,000
$3,437,600
$799.50
$45,756.00
$7,380.00
$902.00
$2,214.00
$8,118.00
$95,776.00
$19,516.00
$29,848.00
$37,720.00
$1,640.00
$66,502.00
$266,992.00
$64,042.00
$656.00
$9,840.00
$3,444.00
$18,204.00
$140,941.60
Totals
400.142
$20,007,100
$820,291.10
17
Figure Five
The Likely Distribution of Incomes Earned by Employees of a
New Warehouse/Distribution Facility Employees in Western Hampton Roads
$1,116,000
Isle of Wight County
$4,067,100
All Others
$2,336,000
Chesapeake
$476,000
$444,000
Hampton
Southampton
County
$728,000
Newport News
$240,000
Franklin
$920,000
Norfolk
$1,562,000
Virginia Beach
$1,622,000
Portsmouth
$6,512,000
Suffolk
18
SUMMNG IT UP
While some individuals apparently prefer to believe otherwise, Hampton Roads is an economically integrated and
interdependent region. Our cities and counties are fused together via a myriad of economic relationships that cross city and county
borders. Like it or not, our cities and counties depend upon each other, complement each other, and feed off each other’s success.
The economic actors in our region that possess the greatest freedom of choice---our workers---have the ability to vote with
their feet. Almost two-thirds of all employed individuals in Hampton Roads live in one city or county, yet work in another. This
makes it inevitable that the fruits of economic activity will be shared widely among our cities and counties.
The moral to the story is that regional economic cooperation and regional economic development efforts make sense.
Why? Because parochial approaches to economic development are not likely to achieve great success---if success is interpreted
to mean capturing all of the economic benefits that are generated by a new or expanded business. The numbers make this
clear. At the end of the day, the economic success of one city or county soon becomes another’s.
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