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Jobs & the Economy: The Truth Behind the Numbers. Or How I Stopped Worrying And Learned To Love Vermont’s Low Unemployment Numbers. Unemployment In Vermont: The Real Story . In other words, the story the Shumlin administration is not telling you.
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Jobs & the Economy: The Truth Behind the Numbers Or How I Stopped Worrying And Learned To Love Vermont’s Low Unemployment Numbers
Unemployment In Vermont: The Real Story In other words, the story the Shumlin administration is not telling you.
Total NonFarm Employment 2000-2014: Annual Averages Source: BLS.gov - ESTABLISHMENT DATA, STATE EMPLOYMENT, SEASONALLY ADJUSTED
Total Employment: Warning Signs • Even though the recession was said to have “ended” in 2009, Vermont’s employment levels haven’t returned to their pre-recession high in 2007. Vermont still has roughly 2,000 fewer employed now than in 2007. • Vermont’s population increased by roughly 17,000 between 2000 and 2010. Vermont’s employment numbers between those same dates was 298K and 297K, respectively. Even if half that population growth was adult-aged people, 8,000 or so, there was no net increase in employment in that same time period. • Higher population numbers and the same employment numbers means fewer people are working as a percentage of the population, which means they are retired or living on some other source of income.
Vermont’s Employment Outlook • The Vermont Department of Labor periodically publishes a short-term employment outlook. The July 2014 projections show where the state expects job growth to occur, by number of jobs, and by industry. So where can Vermonters expect to find future employment? Here’s the top 10: Only 1 of the top10 occupations projected to have the most openings requires a college degree. The 2nd-highest occupation is personal care aides, which reflects Vermont’s demographic mix of fewer young people and a growth in the overall percentage of retirees.
Vermont’s Employment Outlook • And 11-30: The total projected openings for 2015 is 12,010, the bulk of which are service positions.
Why Is Employment So Slow To Grow? • There are many reasons why Vermont’s employment picture is a grim one, but let’s take a look at a few indicators. • Forbes ranked Vermont the 44th Worst State For Business in 2014. A 5-Year Annual GSP Growth rate of 0.0% is not an outlook conducive to hiring. Even with some Vermont companies expanding, like Keurig Green Mountain, the net outlook for growth is zero.
Gross State Product: Top 10 Components The largest component of GSP is government – which is paid for by the taxes generated in private sector income. This is the very definition of being upside-down. If government dominates the economy, where will private-sector economic growth come from? • According to the 2010 U.S. Bureau of Economic Analysis report, Vermont's gross state product (GSP) was $26 billion. Not accounting for size, this places the state 50th among the 50 states. It stood 34th in per capita GSP. • Government – $3 billion (13.4%) • Real Estate, Rental and Leasing – $2,6 billion (11.6%) • Durable goods manufacturing – $2,2 billion (9.6%) • Health Care and Social Assistance – $2,1 billion (9.4%) • Retail trade – $1,9 billion (8.4%) • Finance and Insurance – $1,3 billion (5.9%) • Construction – $1,2 billion (5.5%) • Professional and technical services – $1,2 billion (5.5%) • Wholesale trade – $1,1 billion (5.1%) • Accommodations and Food Services – ~$1 billion (4.5%) • Source: http://en.wikipedia.org/wiki/Vermont
Vermont: Most Costly State for Manufacturing (2010) Which might help explain why it’s difficult to attract and retain manufacturers here. Source: http://www.pbn.com/Rhode-Island-third-most-costly-state-for-manufacturers-says-UConn-study,52269
Vermont: 3rd-highest in Property Taxes (2010) This additional cost of home ownership is near the highest in the country, and with income sensitivity, many retired homeowners now pay a decreasing percentage of the overall property tax collected. This means the burden falls on an even smaller group of people, with a median household income at a far remove from 3rd-highest in the country. Source: http://taxfoundation.org/article/sources-state-and-local-tax-revenues
Vermont Income Levels • In 2013, Vermont had a total personal income (TPI) of $28,688,723*. This TPI ranked 50th in the United States . In 2003, the TPI of Vermont was $19,686,122* and ranked 48th in the United States. • *Total personal income estimates are in thousands of dollars, not adjusted for inflation. • Components of Total Personal Income • Total personal income includes net earnings by place of residence; dividends, interest, and rent; and personal current transfer receipts received by the residents of Vermont • Source: http://www.bea.gov/regional/bearfacts/action.cfm?geoType=3&fips=50000&areatype=50000 Vermont ranks dead last in total personal income. Without income, there’s no spending, and with no spending, there’s no economic activity. Vermont’s dreary economic outlook is tied directly to this reality.
Median Household Income Declining (2013) • Vt. Median Income Declines • Residents Earn Less Than a Decade Ago • Recent U.S. Census Bureau figures show Vermont’s median household income continues to decline. • In fact, when inflation is factored in, Vermonter’s are earning less in real dollars than they were a decade ago. • According to this month’s census data, the 2012 median income in Vermont was $52,977, which means half of Vermont’s household earned above that figure and half below. • When inflation is factored in, the Census Bureau says Vermonters earnings have actually declined — and while the recession has been a factor, the trend was under way even before that. • The decline in the past 12 years is about 1.6 percent. • “For low- and middle-income Vermonters, they’re essentially being pushed back in two ways,” said Paul Cillo, executive director of the Public Assets Institute. • “One is that their incomes aren’t keeping place for inflation, and the other is that their costs for essentials are going up faster than inflation; things like food and fuel, health care, college education.” • http://www.vnews.com/news/state/region/8704977-95/vt-median-income-declines
Why Is Vermont’s Unemployment Rate So Low? • Vermont currently has one of the lowest unemployment rates in the country – even if the household incomes are low, and job prospects are mostly in the service industry – but why would Vermont’s rate be so low if the employment prospects are that grim? • There’s one answer: Labor force participation. • In 2013, the total labor force declined Jan-Dec by 2,650 participants. Total employment reduced 1,900 positions. But since the number of participants is larger than the number of positions, the unemployment rate declined. It’s all about the numerator. So the unemployment rate improves while the number of people actually employed decreases.
Why Is Vermont’s Unemployment Rate So Low? The same effect goes back to 2012 and prior years – the labor force shrinks faster than the number of employed shrinks, and you have a continually reducing unemployment rate. But you have fewer and fewer Vermonters who are actually employed.
