Government & Politics

Margolis: The affordability question

Jon Margolis is VTDigger's political analyst.

[W]oe is Vermont, that poor, pitiful, state full of people who can’t afford to live in it, many of whom have to work two or even three jobs just to pay the rent and put food on the table.

So might one have concluded from the late, unlamented, political campaign that ended (or sort of ended) the other day.


Over and over on the campaign trail, Gov. Peter Shumlin, the (apparently) victorious Democratic incumbent, brought up the plight of so many Vermonters “working two or three jobs.” Meanwhile, Republican candidates pounded the theme of “affordability,” often claiming outright that many Vermonters (the Republicans never actually said most Vermonters, but that was the suggestion) could no longer afford to live in the state where they … umm … live.

Hmmm. Does that make sense?

No. By definition, everyone who lives in Vermont can afford to live in Vermont. Otherwise, they wouldn’t be living in Vermont.

Unless, of course, they were leaving in droves. They are not. The state’s population is rising (if slowly) and while a few more people are estimated to have moved out than moved in over the past year or so, that’s also true of several other states and hardly indicates a mass exodus.

Which is not to say that many Vermonters are not having a hard time living as they would like to live. They are. So are many New Yorkers, Tennesseans, Coloradans and Oregonians. The “middle class squeeze,” as outlined by economist Jennifer Erickson, with stagnant incomes and rising costs for health care and education, is a national trend.

Shumlin was right, though. Compared with other states, Vermont does have a high percentage of people working more than one job. It’s only 8.6 percent of them, but that’s second only to South Dakota, where 9.5 percent of workers have more than one job, according to a report last January by the 24/7 Wall Street news blog.

But that’s not all bad news. If a lot of people have more than one job, economists say, that means that lots of jobs must be available. So heavy moonlighting can be a sign of a healthy economy.

Furthermore, not all – probably not even most – of those moonlighters are low-income earners who need that second job so they can pay the rent and eat. Vermont has a higher-than-usual population of craftspeople. So that, for instance, a school teacher who is also a potter, weaver or jewelry creator and sells her crafts out of her home, counts as a person with two jobs.

“The person with a wage and salary job who is also a craftsperson with a small business would be counted as a multiple jobholder,” said Susan Campolongo of the Bureau of Labor Statistics, by email from Washington.

The high rate of moonlighters could also mean that Vermonters are uncommonly ambitious and hard-working. The state abounds in people who have decent, reasonably well-paying jobs, but who spend weekends and some nights mowing lawns, landscaping, building decks or fixing cars because they have skills they want to use and because they want to earn more.

Like Vermont and South Dakota, most of the other states with a high-proportion of two-job workers are rural (Kansas and Nebraska are numbers three and four), have low unemployment rates, but also relatively low wages. Those low wages suggest that there are indeed Vermonters whose main job pays so little that they have to moonlight just so they can live decently. Whether there are proportionately more of them here than in other states is unknown and apparently unknowable.

The “unaffordability” assertion is more easily dismissed. Were life in Vermont less affordable than in other states, it would stand to reason that many Vermonters would be defaulting on their mortgages, and the state would have one of the nation’s highest mortgage default rates.

It does not. Though different organizations use different systems to compile these data, all show that Vermont’s foreclosure rate is on the low side. As much as their counterparts in other states, Vermonters are paying their rent, buying food (no reported malnutrition increase), filling their cars with (cheaper) gas, and probably going to the doctor when necessary because a comparatively large percentage of them have health insurance.

Like middle-income Americans everywhere, middle-income Vermonters are finding it harder to pay all their bills and have much left over for savings or for fun. Here as elsewhere, incomes for all but the wealthy have barely (or not quite) kept up with inflation.


So everything is peachy-keen, and Vermont has no economic problems?

Alas, no. Like middle-income Americans everywhere, middle-income Vermonters are finding it harder to pay all their bills and have much left over for savings or for fun. Here as elsewhere, incomes for all but the wealthy have barely (or not quite) kept up with inflation.

And while Vermont is by no means the most expensive state to live in, it is far from the cheapest. It gets cold, so money has to be spent to stay warm. Taxes are somewhat higher than in many other states, though according to a recent study by the Tax Foundation, Vermonters pay little or no more a percentage of their income than do the taxpayers of most other states in the Northeast, and most other prosperous states.

But while Vermont has grown more prosperous over the last few decades, the economy seems to have slowed down recently, with job growth lagging most other states.

This could be one reason personal income taxes were 11.2 percent lower than expected last month, and 6 percent lower than last October. Again, other states are in worse shape when it comes to income tax revenues. For the year, Vermont’s income tax revenues are slightly higher than last year. Nationally, state income tax revenues declined 6.6 percent in the second quarter, according to a report by the Nelson A. Rockefeller Institute of Government in Albany.

But Lucy Dadayan, a co-author of that report, wrote in an email that employment figures show that Vermont is “significantly behind the national trends.”

The institute’s report showed that employment in Vermont grew only by 0.5 percent in the third quarter, well below the national growth of 1.8 percent. Only New Jersey, Virginia and Alaska added jobs at a lower rate.

Tom Kavet, the Legislature’s chief economic adviser, called the slow job growth “troubling,” adding “we’ve had a pretty poor six-month period.”

He didn’t know exactly why, and neither did state officials combing over the data to try to figure out why the income tax revenues had fallen so short of expectations. Kavet said he doubted that any state policy was responsible, because there had been no policy changes over the last year or so that would affect job growth.

“It’s not like there’s been some big event,” he said. “Nothing’s happened on the policy front.”

Kavet speculated that perhaps, “the quality of jobs has gone down,” but at this point there was not enough information to explain why.

By no means is Vermont in some kind of economic crisis. Revenue from the rooms and meals tax, which Kavet called “a good, broad measure of economic activity,” has been coming in at a healthy rate, and Vermont’s median household income is above the national average. In fact, one reason the state is relatively expensive is that it is relatively affluent. The poorest states have the lowest costs of living. The cheapest state to live in – Mississippi – is the poorest.

Vermont is not the poorest. It was, at the end of last year, the 20th richest, as determined by the Census Bureau. That could explain why life is affordable for most Vermonters, and for at least 91 percent of them, affordable with the income from just one job.

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Jon Margolis

About Jon

Jon Margolis is the author of "The Last Innocent Year: America in 1964." Margolis left the Chicago Tribune early in 1995 after 23 years as Washington correspondent, sports writer, correspondent-at-large and general columnist. He was previously the Albany Bureau Chief for Newsday and has also been a reporter for the Bergen Record in Hackensack, N.J.; the Miami Herald and the Concord Monitor (N.H.). A native of New Jersey, Margolis graduated from Oberlin College in 1962. He served in the U.S. Army.


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