Vermont workers aren’t receiving the fruits of their labor

Most Vermont workers’ pay has not kept pace with the growth of their output. From 2000 to 2024, productivity—total income generated in the economy per average hour of work—grew 47 percent in Vermont. But compensation—measured by the median hourly wage and benefits for production and nonsupervisory workers—rose by just 34 percent.

Vermont is doing better than many other states, and in the early 2000s the growth in Vermonters’ compensation tracked more closely with the growth in productivity. But the gap widened after the Great Recession, which started at the end of 2007. U.S. productivity grew 45 percent from 2000 to 2024, a bit below Vermont’s pace. But nationally, compensation for production and nonsupervisory workers, who make up about 80 percent of the workforce, grew less than half as fast—only 21 percent.

As a recent report by the Economic Policy Institute explains, the gap between compensation and productivity has widened in recent decades because more of the gains have flowed to corporate profits, executives, and shareholders.