Art Woolf is a columnist for VTDigger. He recently retired as an associate professor of economics at the University of Vermont.
Vermont’s economy continued to slide sideways according to the Vermont Department of Labor’s December jobs and unemployment report. Unemployment rose a bit, from 3.0% in November to 3.1% in December — not much higher than the 2.4% unemployment rate of December 2019. And if you’d like some more cheery numbers, Vermont’s unemployment rate was third lowest in the nation, just slightly above Nebraska and South Dakota’s 3.0%.
But that’s about all the good news there is about jobs in the economy, and if you believe the job market is healthy, I’ve got a tunnel under Lake Champlain I’d like to sell you.
A total of 286,600 people were on the payrolls of Vermont employers in December, a number that hasn’t changed since September. But it’s 28,500 fewer jobs than in December 2019, before the pandemic started, a 9% decline. That’s the 5th largest employment decline in the nation. Only Hawaii, New York, Massachusetts and Michigan have experienced steeper job losses.
Nearly every sector of the Vermont economy has fewer jobs than a year ago. The hardest-hit industry is restaurants and hotels. That industry alone has lost 15,200 jobs over the past 12 months, and it accounts for more than half of the total job losses in the state.
Only a few parts of the economy have more jobs today than a year ago, and those industries are prospering precisely because of the pandemic. There are 400 more jobs at food stores, which is not surprising given that people are not eating out much and that cooking and baking have become a favorite pastime for people stuck at home.
Also not surprising is the 700 job gain in the transportation and warehousing sector. FedEx and UPS workers are working overtime to cope with the demand of increased online shopping and those firms are hiring so they can deliver the huge increase in goods people are ordering. And the little-known “administrative and waste services” industry is up 300 jobs compared to last year. Most of those jobs are at firms that specialize in cleaning offices, stores and other commercial buildings, again a direct result of Covid. Businesses need to keep their establishments much cleaner than in the past.
Every other private sector industry has fewer jobs today than a year ago, as do state and local governments.
That is consistent with the extraordinary number of Vermonters receiving unemployment benefits. In December 2019, when the unemployment rate was 2.4%, about 3,500 Vermonters were receiving unemployment benefits. One year later, when the unemployment rate was only marginally higher, at 3.1%, 23,000 Vermonters received an unemployment check, and an additional 8,000 self-employed workers who are normally not eligible for unemployment benefits, were receiving special pandemic unemployment insurance checks. That means one in 10 Vermonters who were either self-employed or getting a paycheck from their employer are now receiving unemployment checks.
Can we expect an employment recovery this year? I think so, but it will be slow. A lot hinges on how many people get vaccinated and whether people feel more comfortable going out to restaurants and bars. And whether with more people vaccinated the state relaxes its travel restrictions on tourists. And that, in turn, depends on vaccination rates in nearby states, which are currently lower than Vermont.
Vermont leads the nation in the number of vaccines we have received, and we are among the top 10 states in the number of people vaccinated — all relative to our population size, of course. But still, that means that as of late January, less than 10% of Vermonters have received their first dose and a smaller percentage have been vaccinated in neighboring states.
While we are experiencing what will probably be the worst winter tourism season in living memory, whether vaccination rates, state policies and people’s perceptions of the risk of traveling will change by summer is an open question. An optimistic view is that vaccination rates increase dramatically by spring and that people’s desire to travel and spend money after being cooped up for a year will lead to a big increase in spending due to pent-up demand.
A more cautious, or negative view, is that vaccines don’t work as well as promised, or that new strains of Covid don’t respond as well to vaccines, or that people will be very cautious about exposing themselves to other people and won’t get back to what we used to think of as normal economic behavior.
