Exodus: Unemployment and Vermont’s Shrinking Labor Force

Vermont’s employment picture is a bit of an oddity. If you listen to Peter Shumlin – meaning, if you have some free time on your hands, unlike most Vermonters – you’d think that Vermont’s employment picture was rosy.  Why?  Because every chance Peter gets, he touts Vermont’s low employment rate.  Repeatedly.  Ad nauseum.

Vermonters Endorse Shumlin's Economic Growth Plan

Vermonters Endorse Shumlin’s Economic Growth Plan

But what’s really going on, behind the numbers? The published unemployment rate is the number of unemployed divided by the total civilian labor force. In October 2013, the labor force (any employed Vermonter) was 351,650. Total unemployed is 15,950, which gives an unemployment rate of 4.5%.  (Numbers courtesy of the VT Dept. of Labor)

If you crack open the numbers a bit, though, the reason the unemployment rate remains low, and consistently low, is that Vermont’s labor force is declining. In January of 2013, the labor force was 355,350. In October, that number is 351,650. 3,700 fewer Vermonters were working in October than were working in January. (All numbers seasonally adjusted). And while there were 16,750 Vermonters unemployed in January 2013, and 15,950 unemployed in October 2013 (a reduction in the unemployed of 800 workers), that means that the labor force reduction of 3,700 people was much larger than the number of people who found work.

This means that the unemployment rate went down from 4.7% in January 2013 to 4.5% in October 2013, which looks like a great reduction in the unemployment number. But the reason the rate went down was because of the exodus of Vermonters from the civilian labor force, since the number of people leaving the workforce was more than four times the number of people finding employment.

In fact, some month-over-month reductions in the labor force are startling.  Let’s start with 2013.

– From January to February, the state lost 2,050 people in the civilian labor force.

– From January to April, the state lost 4,200 people in the civilian labor force (cumulative loss).

-The total lost in the labor force from from January to October is 3,700.

For year over year comparison – 2012:

-The largest one-month loss in civilian labor force was 2,150 people – January to June.

-For the whole of 2012 (Jan-Dec), the labor force loss was 1,650. Compare that to 2013’s 3,700 decrease, and the number of people leaving the workforce has almost doubled.
In other words, Vermont’s low unemployment is entirely related to the reduction in the labor force, not to any magical economic growth that Peter Shumlin is trying to take credit for.

Considering that the same low unemployment rates he touts as being 7th lowest in the country, he neglects to mention the reduction in the workforce, and that Vermont’s median household income is shrinking, and is annually ranked as one of the worst places to do business.

To be fair, the number of unemployed has gone down, year over year (average monthly unemployment in 2012 was 17,808; in 2013, it’s 15,520), but the job growth sectors in Vermont have been in service-related jobs, largely, which does not seem to match Peter’s “good jobs, high salaries” rhetoric.

Unfortunately, the outlook remains grim, but the current trends of a reduced labor force

Which way to Texas?

Which way to Texas?

will ensure lower relative unemployment rates, and also ensure a Shumlin administration eager to tout a number that does not reflect the dismal economic reality that Shumlin’s policies are helping to create.

(H/T to Daniel Foty and Dustin Degree for prompting the research above.)


13 thoughts on “Exodus: Unemployment and Vermont’s Shrinking Labor Force

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