October 31, 2018
Burlington Free Press
Vermont’s economy has not been performing well for the past few months.
The latest snapshot from the Vermont Department of Labor showed a decline of 500 jobs in September. I’m generally not concerned about a one-month decline of that magnitude, although it is big. What is concerning is it’s on top of a loss of 700 jobs in August and 1,900 in July.
Moreover, the 3,100-job decline over the past three months is not concentrated in any one part of the economy. It’s widespread.
The biggest decline is in the restaurant and hotel sector, which has lost 1,100 jobs. But retailing, professional business services, and even health care and government are all down by 300 jobs since June. The only major sectors of the economy to show any growth since the summer are construction, with 200 more jobs, and private educational services, with 100 more. Those are both pretty meager gains.
Unlike in Vermont, the U.S. economy has been adding jobs at a very respectable rate. To show how far Vermont is lagging the nation, consider that Vermont now has the same number of jobs it had in early 2015. The number of jobs nationwide is up more than 6 percent over that same period.
If Vermont’s job growth had been the same as the United States over the past 3 1/2 years, today we would have 20,000 more jobs than we actually do. That translates into about $1 billion in additional wages, lots more spending at stores and restaurants, and about $40 million more in state tax revenues.
It is possible that the last three months’ decline is an aberration and in coming months the job loss will be reversed. After all, a careful look at the accompanying chart seems to show steady, albeit slow, job growth from the summer of 2016 to early this
The Vermont Department of Labor will be revising these estimates of the number of jobs early next year. Unfortunately, for the past several years, the revisions have all been downward. If that pattern continues, late 2017 and 2018 will not look as good as they do in the chart.
That means the slow job growth we think we had over the past two years will turn out to be job stagnation. If that is true, Vermont will have had no job growth at all in the last three years, and the most recent decline will put us below even where we were in 2015.
Art Woolf is associate professor of economics at UVM.