This commentary is by George Sales, a business owner who lives in St. Johnsbury.
There is a looming matter that is slowly threatening the vibrancy and very existence of our state. It is chipping away at the very core of our downtown communities and is becoming more evident as you speak to local business owners and organizations.
This issue is the declining population of Vermont, and consequently, the waning number of people available to join the workforce.
You see signs all over the place: “No Delivery Tonight, No Driver,” “Delayed Opening, No Workersm: “Takeout Only, No Servers,” and so on. Drugstores and retailers asking customers to come back since they are understaffed; businesses cutting back on operations or resorting to more expensive “visiting workers” (e.g., traveling nurses, med techs, etc.).
More and more of our younger citizens are moving away from Vermont. Many high school graduates cannot wait to move to a bigger town or city, or even to another state.
In my experience as a small business owner, I hear younger workers (mostly high school kids from St. Johnsbury Academy) voice their concern about the lack of opportunities and alternative recreational activities other than skiing or anything nature-related, and look forward to the day when they can move away. Youthful rebellion? Possibly.
However, with the undisputable influence of social media and availability of information online, it is indeed very easy to feel a sense of FOMO (“feeling of missing out,” a term I learned). Of course, this does not ring true to many diehard Vermonters who love the snow and bonfires on the hill, but the fact is that the net sum of those who remain is not enough to sustain the population and help address the very tight labor market.
According to the Agency for Commerce and Community Development, Vermont welcomes more than 13 million visitors each year. With a meager population of only about 650,000 (U.S. Census Bureau), the service sector is bursting at the seams, especially during peak season. It is not surprising, since the unemployment rate in the Green Mountain State is a tight 2.8% compared to the national average of 3.6%.
Alternately, during the lean season, it can be particularly challenging for the small mom-and-pop shop or the nontraditional businesses since, without the density and scale to generate enough traffic, employees must be furloughed.
Have you ever been to a packed diner with only one server? The wait, albeit inevitable, can be very off-putting. Many businesses are having to scale back or even shut down (98 Mill Restaurant is a recently renovated restaurant space where the new owner invested almost half a million dollars, sitting dormant since July 2022; Kingdom Crust Company, a popular pizza place, occasionally has to cancel delivery).
Imagine an airplane that you can only fill up to half capacity due to resource restraints — notwithstanding maintenance costs, lease financing, airport fees and other overhead expenses associated with the operations that continue to hit the bottom line.
In the aftermath of Covid, many small employers find it is extremely difficult to “ramp up” for the season, since most available skilled workers are already employed or have moved away. Small-town businesses are having to contend with the draw of Big Box stores, higher wages in other states or bigger cities, or simply more opportunities elsewhere.
Consequently, the cost of doing business becomes more and more expensive as inventory waits longer to be consumed and operational capacity is scaled down to what the available labor can accommodate.
This scaling back has a rippling effect not only within the community but across the economy. For example, marketing and advertising revenues will be impacted (for us, ads with the Caledonian Record and the Burlington Free Press have been put on hold), suppliers will have to hold off and wait until businesses start ordering again (Robie Farms, Big Pappas, and other regional suppliers in New Hampshire, Massachusetts and New York are impacted), equipment vendors will have to cut back operations (Amsterdam Printing, Webstaurant, etc.), hours for auxiliary employees reduced or even eliminated (in our case, less traffic in the dining room means reduced number of dishwashers and kitchen staff).
The assumption of “pay employees more and they will work” rings true only if these costs can easily be passed on to the customers or recouped somehow. This assumption is misleading and could be fatal to many small businesses, as there is a tipping point where customers simply stop coming (in economics, restaurant dining is a “luxury good” that has an “elastic demand,” where price matters).
Right now, the wheels of supply and demand are turning, but during this time of transition, as we have seen, there have been and will be many casualties.
This is a call to everyone in our state, from our national legislators (Sens. Sanders and Welch and Rep. Balint), local community and business leaders, town officials and chambers of commerce — what can we do to grow Vermont and make it a true destination state, not only for tourists but also for families, young people and immigrants?
