A new study shows low-income and middle-income Vermonters are worse off than they were five years ago.
More Vermonters are losing traction in the post-Great Recession economy despite the fact that the state has a low unemployment rate, a highly educated workforce, and higher median household incomes than the national median, according to a new report from Public Assets Institute, a nonprofit think tank based in Montpelier.
The report, “The State of Working Vermont,” produced by the Montpelier-based Public Assets Institute in conjunction with the national Economic Policy Institute, is based on federal and state economic trend data. The study examines poverty, household purchasing power, unemployment and workforce statistics from 2007 to 2012.
Paul Cillo, the executive director of Public Assets Institute, said in a statement that higher wage jobs could help balance the state budget, “which seems to be all people talk about in Montpelier these days.”
“The indicators highlighted in this report ought to be the main focus of legislators’ attention when they return to the State House next month,” Cillo says. “The Legislature took an important step in 2012 when it declared, in statute, that the purpose of the state budget is to ‘address the needs of the people of Vermont in a way that advances human dignity and equity.’ Now our political leaders need to follow through on that commitment and get serious about reducing poverty, increasing Vermonters’ incomes, and strengthening the middle class.”
Construction, manufacturing, financial and information-based jobs have waned since 2007. Employment gains have been in the lower-paying service sector. In all, the state has lost 5,000 private sector jobs.
At the current job growth rate of roughly 300 jobs per month, it will take 13 years years for Vermont to return to its pre-2006 annual average unemployment rate and workforce participation rates, according to the report.
Median household incomes have fallen by more than 5 percent while total personal income has increased dramatically in Vermont — by 20 percent — and the state’s gross domestic product has grown 14 percent, according to Public Assets Institute.
More than 12 percent of Vermonters have incomes at or below the federal poverty threshold. In 2006, less than 8 percent of the state’s residents were classified as poor. Single mothers make up the largest group of impoverished Vermonters. About 35 percent of single mothers were impoverished in 2012. Roughly 15 percent of children under 18 are poor. Still, Vermont has a lower percentage of overall poverty than the national rate. In the United States, nearly 16 percent of Americans are at or below the federal poverty rate.
Participation in Vermont’s food stamps program increased by 86 percent from 2007 to 2012, according to the report. The number of homeless Vermonters is considerably higher — up from about 1,000 to 1,400 — based on Housing and Urban Development figures.
Meanwhile, over the same period, the richest 1 percent of Vermonters increased their total share of income from 6 percent to 19 percent, according to the report.
Growing income inequality is a national public policy issue that Vermont cannot solve on its own, the report says.
The Public Assets Institute recommends the state take steps to help to close the income gap between rich and poor by raising the minimum wage, investing state money in education and infrastructure, reducing tax breaks, basing school taxes on a percentage of income and increasing state subsidies for child care.
