Editor’s note: This commentary is by Doug Hoffer, Vermont state auditor.
[T]he recent discourse about Vermont’s changing demographics and the labor market has led some to suggest that we need to pay people to come to Vermont.
The situation deserves our attention, but we must first cut through the talking points and sound bites to better understand the facts on the ground.
According to the Bureau of Labor Statistics (BLS), there are 363,000 Vermonters between 20 and 64 years old, and 300,000 of them are considered part of the labor force. That leaves 63,000 working age Vermonters who are not currently participating in the labor force.
Oddly, the current debate ignores those 63,000 Vermonters, some of whom want to work. Labor force figures come from the federal Current Population Survey, which says that if you are not currently working, and report that you haven’t looked for a job in the last four weeks, you are not considered part of the labor force.
But quite a few people who haven’t looked for work recently say they want and are available for work. These folks are labelled the “marginally attached” and “discouraged workers.” When asked why they’ve stopped looking for work, they say there are no jobs nearby requiring their skills, they are caring for a sick relative, or they don’t have reliable transportation, among other barriers to work.
Therefore, those 63,000 Vermonters that are not in the labor force represent a large pool of potential workers. BLS reports there were 1.6 million people across the U.S. considered “marginally attached” to the labor force in April 2017. That’s about 1 percent of the national labor force. If that’s true for Vermont, there should be 3,000 Vermonters under 65 who want to work but who are not currently in the labor force.
Finding them and identifying their needs would take some effort, but I think we should utilize our existing human capital before paying outsiders to come here (an approach that has its own risks). This could include targeted education and training, and more affordable housing and child care, among other things.
Another factor not usually discussed is elder workers. A much greater percentage of those over 65 remain in the workforce than in previous generations (now 33,000 in Vermont!). Some enjoy the work, but many others don’t have adequate retirement income and need to keep working to supplement Social Security benefits. There is an unfortunate ripple effect to this because the decision by some older folks to stay on the job means the number of annual “replacement” jobs is lower than it would be otherwise. Fewer replacement jobs means younger workers have fewer opportunities to enter or advance through the workforce.
The state could make a difference by reducing the cost of living for our elderly neighbors. We have already started down this path by lowering and in some cases eliminating state income tax on Social Security income for lower- and middle-income beneficiaries. Here too affordable housing would make a big difference, as would making health care more affordable.
To the extent we can help seniors retire who are only working to stay afloat we create opportunities for younger workers.
We can’t solve a problem if we haven’t correctly defined it or evaluated the available resources. So, rather than making policy based on a simplistic sound bite of “we need more people,” we can address the labor force issue by making prudent investments in Vermonters, affordable housing, and other types of public and social infrastructure.
