Virginia ahead of Super Tuesday: ‘We live in a bubble here’
Springfield, Va. – It’s one of the few things Democratic voters in this area can agree on: “As everyone says, we live in a bubble here,” said Sandy Graves, one of the first supporters through the door to see Mike Bloomberg at an event in McLean on Saturday.
Hours later, Dan Hale, a teacher in West Springfield, used almost identical language (without prompting) while waiting for Bernie Sanders. “In Northern Virginia, I think we’ve always been a little bit of a bubble anyhow,” he said.
The Northern Virginia economy is, indeed, unlike anywhere else in the country, thanks to spending from “across the river.” The 2019 State of the Commonwealth Report found that federal spending directly accounts for a whopping 26.7% of Northern Virginia’s GDP. By comparison, just 4.2% of the U.S. GDP as a whole can be directly attributed to the DC spending.
As the report notes, ”we must deal with the stark reality that federal government spending provides fuel for the economic engine that drives the Commonwealth.”
Virginia is the largest swing state set to vote on Super Tuesday (March 3) and government spending is shaping the race in a range of ways that will likely determine who ends up on top.
An economy unlike any other
The symbiotic relationship between Washington, D.C. and Northern Virginia has been very good for the state’s economy.
In December 2019, Virginia's unemployment rate stood at just 2.6%, tied for sixth-lowest nationwide. Virginia's two direct neighbors, Maryland and West Virginia, ranked 26th and 48th, respectively.
The statistics in Northern Virginia are even more impressive. Two of the counties closest to Washington, D.C. – Arlington and Alexandria – showed unemployment rates of just 1.6 and 1.8%.
Virginia has become somewhat less reliant on the federal government over the last decade thanks to the growth in the private sector, but perhaps not as much as many Virginians think. More and more federal spending has taken the form of the government contracting a range of services out to nominally private businesses.
“It just looked and felt a lot like the private sector,” says Jeannette Chapman, who runs an institute dedicated to analyzing the D.C. region’s economy. “However, when we have federal government shutdowns because of sequestration, it becomes very apparent that it wasn't entirely private sector.”
Perhaps nothing has shaped the local economy more than military spending from the Pentagon (which itself sits in Virginia). It’s a symbiotic relationship, says Robert M. McNab, professor of economics and one of the lead authors of the State of the Commonwealth Report. “If the federal government budget and especially the defense budget, increases, the Virginia economy tends to pick up steam.” And the reverse is also true: the region takes a hit when spending drops.