Margolis: Slow population growth might be the norm in Vermont

File photo by Anne Galloway/VTDigger

[W]anted: more Vermonters.

Especially young Vermonters, or more precisely young non-Vermonters who can be persuaded to become Vermonters.

The state with the second smallest population (only Wyoming is smaller) also has the second oldest population, with a median age at the end of 2014 of 42.8, lower only than Maine’s 44.1, and a birthrate higher only than Rhode Island’s.

Compared with most other states, then, Vermont has a smaller percentage of working-age folks, all those people between 20 and 65 who go to work five days a week, earn money, and buy stuff with it.

University of Vermont economics professor Art Woolf said a shortage of working-age people poses problems for the state’s economy.

“Businesses are going to have a harder time finding qualified workers,” Woolf said. “They aren’t going to be able to expand or they’ll expand someplace else or relocate. The economy is going to grow more slowly.”

Not all economists agree. In fact, not everybody agrees the state has to be bigger at all. States, like countries, can grow richer without adding population, and prosperity in any state depends less on what it does than on conditions in the whole country.

“A state’s economy is embedded in the national economy,” said Ronald Lee, a demographer and economist at the University of California, Berkeley, via email. “People move in and out and so do goods and capital, so wages and interest rates will not be much affected by local population trends.”

Still, it’s no wonder that in this election year, two candidates for governor, Republican Lt. Gov. Phil Scott and Democrat Matt Dunne, have proposed somehow increasing the state’s population — by a lot.

They both want to get to 700,000 people in about 10 years. That would be an increase of more than 11 percent over the current population of 626,562, the U.S. Census Bureau’s estimate at the end of 2014.

That's a very tall order, according to demographers and historians. States experience that kind of growth only after a discovery of natural resources (such as the California Gold Rush of 1849 or North Dakota’s Bakken Shield oil and gas in 2006) or when the federal government decides to invest billions in military, aerospace or energy projects.

In all its history, Vermont has had but one period of rapid population growth. It was in the 1960s and 1970s. The federal investment that made it possible was completion of interstates 89 and 91. Vermont’s version of “gold” was lots of cheap land, which happily coincided with a time when many young people had money and a yen to get away from the hurly-burly of metropolitan life. They bought that cheap land for second homes or communal farms, and the population boomed.

It has not boomed since and had never boomed before.

“Aside from the decades between 1960-80, Vermont’s population has never climbed with anything like the speed the candidates are talking about,” said University of Vermont historian Dona Brown. “In fact it has barely climbed at all since the period of its first settlement. On the contrary, Vermont’s population hovered quite close to zero growth for most of the decades between 1830 and 1950.”

These days, noted Art Woolf, young people don’t want to go “back to the land.”

“They want to live in metropolitan areas where there are other people,” Woolf said, “preferably big metro areas.”

That could explain why Burlington — though Woolf called it “a pretty small metro area” – and surrounding Chittenden County are growing at a healthy clip. It’s Vermont’s rural areas that are losing population.

Today’s slow growth, then, might just be the norm. That doesn’t mean it is not a problem, or that attempts to attract more people make no sense. It does mean a balanced view of the situation is probably a good idea, and that balanced view indicates that compared with the rest of the country, Vermont is in pretty good economic and demographic shape.

Its median household income is higher than the nation’s as a whole. Its unemployment rate is among the lowest, and not – despite what some have argued – only because the workforce has shrunk. It has shrunk, but so has the whole country’s. The New York Times recently published a study showing that 16 percent of men between the ages of 25 and 64 were not in the workforce. In Vermont, that figure is 13.1 percent, according to Vermont Labor Department economist Mathew Barewicz.

Furthermore, in most of those data indicating that Vermont is lagging, it is hardly lagging alone. Rural areas all over the country are losing population, most of them faster than Vermont’s are. Or take that second-lowest birthrate. It’s only 0.1 percentage point lower than the next two states. And those next two states are New Hampshire and Massachusetts. The entire Northeast is getting older.

“People are generally moving out of the Northeast to other parts of the country,” said Michael Moser of UVM’s Center for Rural Studies.

Vermont’s population is going up, though very slowly. People are not pouring out of the state. They are seeping out. But others are seeping in at just about the same rate. The Internal Revenue Service recently finished an analysis of in- and out-migration for all states by age and income levels. The IRS found that 10,009 tax filers (these would be households, not simply individuals) moved out of the state in 2012 and 2013.

But 9,501 tax filers moved in. The out-migrants were younger. The in-migrants were older and richer. In fact, the total amount of income that came into the state was greater than the amount that moved out. The in-migration of the wealthy would seem to contradict (though by no means conclusively disprove) the argument that Vermont’s relatively high income tax rates on top earners discourage upper-income people from moving in.

But the IRS data do reveal some potential problems for Vermont. The biggest net outflow – 2,175 moving out, 1,835 moving in – was among tax filers younger than 26. That’s only 340 households, and at that age probably one- or two-person households. Still, if that rate of loss continued for several years, it would at least put to the test Woolf’s concern about businesses not being able to find enough workers.

Whether anything can or should be done about this is questionable, especially since most people enticed to move to Vermont would be likely to head to Chittenden County, where the population is already growing.

Phil Scott acknowledged that he did not have a detailed plan for trying to increase the state’s population but said he wanted to “begin a conversation” about the matter and “look at every opportunity” to attract more people to the state.

Matt Dunne said he envisioned a “smart growth” policy to encourage young people from other states to move to “open housing stock, abandoned buildings and vacant lots” in places like Springfield, White River Junction and Bennington, “the communities where we have to have greater growth.”

Some of that may work. But demographers say state populations are far more likely to go up thanks to natural increase rather than schemes to encourage in-migration.

“Regarding how the demographic situation might be altered, I would say: Forget it,” said the University of California's Lee. “Fertility will matter more in the long run than net migration. Public policy has generally had very little effect on fertility.”

It’s certainly hard to see how any state policy could persuade more Vermonters to have children. Most Vermonters — 93 percent, according to census figures — are non-Hispanic whites, who have the lowest fertility rate in the country. Perhaps the simplest way to increase Vermont’s population is somehow (though just how poses a problem) to attract more African-Americans, Asian-Americans and Hispanics to the state. That could yield more good food, more good music and more babies.