The Slap of Reality

When one fish just won't cut it.

When one fish just won’t cut it.

Vermont politicians often loudly tout the state’s relatively low unemployment rate as a good thing, something we should be proud of, and sometimes you’ll even find politicians standing in front of microphones taking credit for such wonderful news.  Recently, the December 2012 unemployment rate was published, clocking in at a national unemployment-level defying 5.1%, actually dropping from 5.2% in November 2012.

Great news, right?  Well, here’s some other Vermont-specific data that might argue otherwise, even if guys like Shumlin aren’t standing in front of a microphone touting these numbers:

Vermont is ranked 5th-highest in per-capita State spending.

Vermont is ranked 36th in median household income.

As of October 2012, Vermont had 99,000 people on the Food Stamp program.  Vermont’s population is 626,000.  That’s 15.8% of Vermont’s population on food stamps.

Vermont has the smallest percentage (21%) of its total population distribution under age 18 than any other state, even smaller than Florida (22%).  This reflects Vermont’s EU-esque birthrate, which is below the replacement rate.  And more good news, from the same link:

Vermont also has the highest rate of students attending college out of their home state — 57 percent, up from 36 percent 20 years ago. Many do not move back. The total number of 20- to 34-year-olds in Vermont has shrunk by 19 percent since 1990.

But what’s really disturbing, ultimately, are some of the facts buried in the employment data.  Here’s a few tasty waffles to chew on over breakies.  Numbers are from the period between the 2nd quarter of 2002 through the 2nd quarter of 2012:

  • From the 2nd quarter of 2002 through 2nd quarter of 2012, the total number of people employed in Vermont hasn’t changed even a tenth of a percent.  It’s the same number (296K).  So even with a relatively low population growth rate, the number of people employed is shrinking as a percentage of the population – in other words, fewer Vermonters are working.
  • Total employment in the private sector decreased by 1%.  Total public sector employment (state, local, and federal government employees) increased by 4.9%.  In other words, what kept the job rate steady, with a declining private sector, was the tax-and-borrowing-support public sector.  A sector that grew at nearly 5X the rate the private sector grew.
  • Construction industry employment (in aggregate):  Down 5%.
  • Manufacturing employment:  Down 22.8%.
  • Trade, Transportation, Utilities employment:  Down 6.3%
  • Air Transportation employment (subset of above): Down 58.9%.  This reflects fewer flights into and out of Vermont because of reduced demand.
  • Financial sector employment:  Down 8.3%.
  • Real estate sector employment:  Down 3.4% (although the “real estate” sub-sector is up 17.6%, “rental and leasing services” sub-sector is down 32.1%).

Is there any good news (it can’t all be bad, can it?):

  • Professional and Business Services employment:  Up 27.8%.
  • Administrative and Waste Services employment:  Up 31.2%.

However, in the public sector:

  • Total Education and Health Services employment (Fed/State/Local): 31,620, out of total public sector employment of 53,010, or almost 60% of the total.  Interestingly, the percentage growth in each of the 3 levels, State, Local, and Federal, went up 1.5%, 17.3%, and 35.9% respectively, in terms of total employment.  The largest growth sub-sector in this category is in Health Services, reflecting Vermont’s aging population.

In short, Vermont’s low unemployment rate is not a sign of a robust, thriving economy.  Rather, it’s a sign that demographic shifts are keeping the actual number of employed Vermonters exactly the same as it was 10 years ago, with the only employment sector showing any significant growth at all being the public sector – the one that relies on taxes levied on a shrinking pool of earners (who earn, on average, much less than their counterparts in other states) to pay for the State’s spending.

In other words, all the negatives behind Vermont’s employment demographics are hidden behind a very large sign that says “Unemployment dropped to 5.1%!”, a sign held up by politicians who have no idea how to fix what’s gone horribly, catastrophically wrong in Vermont, and have no intention of challenging the policies that have ranked Vermont the 44th best state for business.

I might ask the Governor:  How can a state with low unemployment be the 6th-worst state for business?

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