– Vermont’s 99 Percent
– After the Deluge, Fresh Thinking
– Hogan Joins Health Care Board
– The Middle Falls Further Behind
– Jobs, Jobs, Who’ll Create the Jobs?

Continue reading October 2011 Update

His point, which he laid out in a blog post a few weeks earlier, was that business views jobs as a necessary evil, a cost that reduces profits, not as a social responsibility.

It isn’t news that the goal of business is to make a profit, or that cutting costs helps do it, but the stark truth of Frezza’s statements may help to explain why prosperity isn’t reaching middle class Vermonters.

Over the 20 years from 1989 to 2009, while Vermont’s overall economy (income and gross state product) grew about 60 percent in real (inflation-adjusted) dollars, real median household income grew only 2 percent.  In essence, average Vermonters did not get ahead despite plenty of economic growth.

Business job- and cost-cutting strategies over those 20 years included new computer technology and offshoring–the practice of having manufacturing or services done less expensively overseas.  These strategies cut costs and boost profits, but they also boost unemployment.

While it’s not business’ fault, the fact remains that unemployment is a social ill.  People without jobs don’t have a productive role in society and don’t have the means to live.  So if it’s not the responsibility of the private sector to create jobs, whose responsibility is it?  The answer has to be the public sector.

But state government, chided to operate more like a business, has been cutting jobs, too.  So how does all this job cutting create jobs?  It doesn’t.

If the state wants to create jobs, it should take two steps based on the analysis in PERI economist Jeff Thompson’s August 2010 paper:

•  Reduce public money give-aways to business that supposedly create jobs.  Estimated at over $300 million each year in Vermont, these funds do little to create jobs; they simply increase profits for the lucky businesses.

•  Increase investment of public funds in public infrastructure and citizen education– both have the short-term benefit of job creation and both provide a solid foundation for the state’s economic future.

This simple shift in the use of existing public funds would have a profound impact on job creation and begin to restore Vermont’s middle class.

.

.

.

Help Needed to Fill the Fridge
Officially, the recession ended more than two years ago. But Vermonters still struggle to put food on the table. Before the start of the recession, about 52,000 Vermonters received food stamps each month through 3SquaresVT. During fiscal 2011, which ended in June, food stamp recipients averaged about 90,000 a month. Since the official end of the recession, with thousands of Vermonters still out of work, demand for food stamps has increased 36 percent.

Multiple Jobs = One Livelihood
For at least 10 years, Vermont has led the New England states in the percentage of workers with more than one job, which might explain the state’s relatively low unemployment rate. The number of Vermonters with multiple jobs declined during the recession, from 32,000 in 2007 to 27,000 in 2009. If those 5,000 people had become unemployed instead of going to just one job, Vermont’s 2009 unemployment rate would have been 8.3 percent, not 6.9 percent—and much closer to the national average.

Download the Jobs Brief in PDF to read more.

Lots of action signifying little
Monthly job reports are net numbers that typically show a gain or loss of a few hundred jobs, occasionally 1,000 or more. In fact, Vermont employers create thousands of jobs every quarter, but during the recession more have been lost than gained. For seasonal businesses, the same job may open and close a couple of times a year. If the changes occur in different quarters, each opening or closing shows up as a gain or loss in that quarter’s numbers. The latest figures, released this month, show that job gains exceeded losses for the last two quarters of 2010.

Bad news: More sexual equality
The gap between wages for Vermont men and women closed slightly in 2010—but for the wrong reasons. The real median wage for women—that is, adjusted for inflation—didn’t fall quite as much as the real median wage for men. Census data show the real median wage for men, in 2010 dollars, dropped to $17.37 an hour in 2010 from $18.24 the previous year. Meanwhile, the real median wage for women in Vermont dropped to $15.27 in 2010 from $15.34 the year before.

Download the jobs brief in PDF to read more.

,

With the Snowmelt, a Major Jobmelt
A lot of the private sector losses in April occurred in the tourism-related sectors. Vermont hotels and restaurants typically shed jobs each year after the snow melts. But this year the drop was bigger than usual, even after the numbers were adjusted for the season. The seasonally adjusted loss was 1,500, the largest in the last decade.

..

More Ground Lost in Government Jobs
April’s private sector employment suffered a setback after steady gains through the fall and winter. It’s also possible these preliminary numbers will be adjusted next month to show a smaller drop. Meanwhile, the number of public sector jobs has been on a downward trend since last summer. Vermont has lost about 700 seasonally adjusted public sector jobs in the last two months, and the total of federal, state, and local government jobs in April was slightly below the number of public sector jobs at the start of the recession.

Download a PDF of the jobs brief.

Unemployment Insurance: The Stimulus Effect
Unemployment insurance helps people who are out of work through no fault of their own. It also preserves jobs by enabling unemployed workers to continue to buy some of the goods and services they need to support their families. For the three years following the start of the recession, more than $600 million in unemployment compensation was paid to out-of-work Vermonters, who in turn pumped that money into the state economy.

Good News and Bad News about Unemployment
Vermont’s traditional unemployment rate (U-3) ticked down again in March and is now 3.4 percentage points below the national average. That’s the good news. The bad news is that the broadest measure of unemployment, known as U-6, rose to over 12 percent in 2010. U-6 includes discouraged workers who have dropped out of the labor force and people who are working part time but would like to be working more.

.

.

.

Download a PDF of the jobs brief.

.

Gains are in the Service Sector
Jobs are returning in Vermont, but they are scarcer in some important sectors than before the recession. Figures released today show that Vermont added 8,300 non-farm jobs (seasonally adjusted) from February 2010 to February 2011. However, there are fewer construction and manufacturing jobs, which typically pay above-average wages, than in late 2007. Meanwhile, various service sectors, which typically pay lower wages, have seen increases to levels higher than before the recession.

.

Workers Pound the Pavement Again
Employment data released today by the U.S. Bureau of Labor Statistics (BLS) continues to indicate that Vermont’s economy is gaining ground. The labor force grew in February for the sixth straight month, suggesting that previously discouraged workers are looking for jobs again. While Vermont’s monthly unemployment rate ticked down, to 5.6 percent, the change was not statistically significant, according to the BLS.

.

.

.

Download a PDF of the jobs brief.

Last Year Was Better Than We Thought
March is the month when the BLS recalibrates its numbers. Revised 2010 figures released today show that Vermont had, on average, about 2,500 more jobs each month last year than originally reported. Vermont employers reported an average of about 295,000 non-farm jobs each month last year. The chart shows how much the original monthly totals were adjusted, up or down, as a result of the BLS’s annual recalibration.

But It’s Still 1989 for Many Vermonters
The Great Recession has been hard on average Vermonters, but the problems for low- and middle-income households date back more than few years. Median household income—half the state’s households have a higher income and half lower—was $50,619 in 2009. After adjusting for inflation, that was just 2 percent higher than median household income had been 20 years earlier. In other words, a median Vermont household in 2009 was trying to get by on nearly the same income as a comparable household in 1989.

.

.

.

Download a PDF of the jobs brief.

A Program to Avoid Layoffs Sees a One-Year Spike
Work sharing spiked in 2009 as Vermont employers reduced their labor costs in response to the recession but didn’t want to lose skilled workers. Work sharing, also known as the Short-Time Compensation Program, is an alternative to layoffs. It allows workers to receive unemployment insurance as partial compensation for having their hours reduced. Businesses must meet specific requirements, and all work-share plans must be approved by the Vermont Department of Labor. But the program allows both employers and employees to avoid the cost and hardship of total unemployment.

Unions Represent a Smaller Share of Vermont Workers
The share of employed Vermonters represented by unions shrank in 2010, according to new figures from the U.S. Bureau of Labor. Just 11.8 percent of Vermonters working were union members in 2010, and unions represented 13.6 percent of workers, including those who were not members but were covered by union contracts. Vermont ranked fourth in union membership among the New England states, the same as in 2009.

Download a PDF of the jobs brief.

MONTPELIER- A new report by Public Assets Institute highlights the toll taken by the Great Recession and Vermont’s failed efforts at job creation leading up to it. The state’s immediate task is to respond to the crushing downturn and provide jobs for thousands of people who are out of work through no fault of their own. But Vermont also needs to re-examine its strategy for sustainable job creation, because current policies, especially business tax breaks, are not working. Even before this recession, Vermont was having its worse decade on record for creating new jobs.

The report, “State of Working Vermont 2010,” recommends that Vermont return to the kinds of public investments that have been shown to strengthen the economy and provide working Vermonters the tools they need to support their families and prosper.

“We are all aware of the hardship created by this recession,” said Paul Cillo, president of Public Assets Institute. “But what no one has been talking about is how poorly Vermont was doing before the recession. Where job creation is concerned, this has been the worst decade in Vermont since the Department of Labor started keeping records in the late 1930s.”

Other key findings of the report:

• Real median household income in Vermont was lower in 2009 than it was in 1999.
• From 2008 to 2009, unemployment increased nearly 50 percent among Vermont men.
• Vermont has lost 13,500 private sectors jobs since the start of the recession.
• Vermont’s private sector is providing 10,000 fewer jobs than it was 10 years ago.

Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org

- 30 -