Vermonters feel the effects of inadequate public investment

As the economy recovers many are left behind, new report shows

MONTPELIER — Economists told us last summer that the current economic recovery had become the longest on record. Vermonters at the top of the income ladder have enjoyed the effects. But for the 66,000 in poverty, the single mother earning no more than her counterpart did before the recession, or the parents who can’t afford good child care, it doesn’t feel like 10 years of growth.

These conflicting indicators, reflecting the challenges of Vermont’s top-heavy economy, are laid out in State of Working Vermont 2019, released today by Public Assets Institute in Montpelier. Vermont’s economy expanded, but too many Vermonters haven’t seen the benefits of this growth. Wages increased, but far faster for high-wage workers than for those earning less. Child poverty hit its lowest point in 15 years, but still exceeded 10 percent.

“Our policy makers need to try something new,” said Paul Cillo, founder and president of Public Assets. “This is a pattern we’ve seen for too long. Coming out of the recession, Vermonters had reason to expect their lives would improve, but the benefits aren’t trickling down.”

The report points out that Vermont’s spending on public goods, as a share of Vermonters’ total income, has remained flat for 25 years. The state is now paying for its failure to invest adequately in necessities like the state employees’ pension funds and clean lakes and rivers.

State of Working Vermont 2019 highlights the positive signs:

• Gross state product, a primary measure of economic activity, grew 1.2 percent last year after adjusting for inflation.
• Private sector jobs hit a new peak in 2018.
• Real wages grew for all income groups from 2010 to 2018.
• The number of children living below the federal poverty threshold fell to its lowest level in 15 years.
• Vermont’s state and local taxes were among the least regressive in the country.

And the negative:

• From 2010 to 2018, Vermont’s economy grew at less than one-third the rate of the U.S. economy, which is having its slowest recovery since at least 1947.
• The typical Vermont household’s buying power in 2018 was no better than it was for the typical household before the recession over 10 years ago.
• Wages rose faster after the recession for the highest-paid hourly workers than for the lowest.
• Last year’s median income for families headed by single mothers, $29,215, was smaller than in 2010, after taking inflation into account.
• More than one in 10 Vermont children lived in poverty in 2018.

“Vermont faces challenges today that it didn’t face a generation ago,” said Cillo. “It’s clear that we need to make a greater effort, greater investment, to ensure that all Vermonters can not only can get by, but get ahead.”

Public Assets produces the State of Working Vermont annually in conjunction with the Economic Policy Institute in Washington. The report is designed to show how working Vermonters and their families were faring economically at the end of 2018—the latest year for which most data are available—and how conditions have changed, for better or worse, in recent years. Its analyses are based on data released in 2019 by the U.S. Census, U.S. Bureau of Labor Statistics, and other state and federal agencies. State of Working Vermont is a companion report to Public Assets’ A Framework for Progress: Investing in Vermont’s people, infrastructure, and good government (2018).

State of Working Vermont 2019 is published in a readable chart-book format with brief explanatory text. The report can be viewed or downloaded at publicassets.org.

Public Assets Institute is a nonprofit, nonpartisan organization in Montpelier that promotes sound state budget, tax, and economic policies that benefit all Vermonters. More information at www.publicassets.org

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