Vermont Lags Behind National Economic Rebound

Vermont’s economic recovery seems to be lagging behind the rest of the nation.  The following story was posted on the WCAX website:

Recovery– it’s a word many Vermonters are waiting to hear. But they might be waiting longer than the rest of the nation. At the 22nd Vermont Economic Outlook Conference in Burlington, economist group Northern Economic Consulting looked at the Vermont economy today versus in the next two years. According to the conference, 2013 will be a big recovery year for the nation, but not Vermont.

“We will be growing, just not as fast as we would like it. And slow will continue as far as we can see for Vermont,” said Richard Heaps of Northern Economic Consulting, who organizes the Vermont Economic Outlook Conference.

The conference projects Vermont will add 2,500 jobs in 2013. Government jobs will be sparse, but professional and business services will lead that force.

“That sector grew well in 2012 and again in 2013. That’s the best story in the Vermont economy; what’s happening to that sector,” Heaps said.

And we can’t forget about the graying of our state. Economists say this will be a problem yet again in the years ahead.

“In Vermont we have a demographic problem; our labor force is shrinking, so when businesses picks up there are not people to hire. And as a result, we won’t see that gain in employment and spending that occurs with that,” Heaps explained.

Experts say Vermont’s current unemployment rate of 5.3 percent is expected to fall to 5 percent by the end of 2013, entering a long-term decline.

According to economists, Vermont will also see a slight gain when it comes to income in 2013.

The graying of our state can be accounted for by one of the lowest birthrates in the nation, which demographic expert Phillip Longman attributed to a lack of religious conviction in his May/June 2004 article in Foreign Affairs entitled “The Global Baby Bust.”   According to Longman, this the graying and shrinking of populations is a global problem:

Yet a closer look at demographic trends shows that the rate of world population growth has fallen by more than 40 percent since the late 1960s. And forecasts by the un and other organizations show that, even in the absence of major wars or pandemics, the number of human beings on the planet could well start to decline within the lifetime of today’s children. Demographers at the International Institute for Applied Systems Analysis predict that human population will peak (at 9 billion) by 2070 and then start to contract. Long before then, many nations will shrink in absolute size, and the average age of the world’s citizens will shoot up dramatically. Moreover, the populations that will age fastest are in the Middle East and other underdeveloped regions. During the remainder of this century, even sub-Saharan Africa will likely grow older than Europe is today.

Free Falling

The root cause of these trends is falling birthrates. Today, the average woman in the world bears half as many children as did her counterpart in 1972. No industrialized country still produces enough children to sustain its population over time, or to prevent rapid population aging. Germany could easily lose the equivalent of the current population of what was once East Germany over the next half-century. Russia’s population is already contracting by three-quarters of a million a year. Japan’s population, meanwhile, is expected to peak as early as 2005, and then to fall by as much as one-third over the next 50 years—a decline equivalent, the demographer Hideo Ibe has noted, to that experienced in medieval Europe during the plague.

Although Longman  himself is not a religious person, he notes that religious conviction is a factor in determining birthrates:

Today there is a strong correlation between religious conviction and high fertility. In the United States, for example, fully 47 percent of people who attend church weekly say that the ideal family size is three or more children, as compared to only 27 percent of those who seldom attend church. In Utah, where 69 percent of all residents are registered members of the Church of Jesus Christ of Latter Day Saints, fertility rates are the highest in the nation. Utah annually produces 90 children for every 1,000 women of childbearing age. By comparison, Vermont—the only state to send a socialist to Congress and the first to embrace gay civil unions—produces only 49.

Another factor in the graying of Vermont is the exodus of young people from the state seeking opportunity elsewhere.  The aging problem Vermont faces will not go away unless we take a closer look at what is driving it.