By Hamilton E. Davis
One of the most persistent themes in the Vermont political ether is the Republican claim that the state is a bad place to do business. The tax climate is too onerous, so businesses leave; and there aren’t enough jobs for our young graduates, so they also have to leave. The problem, the GOP says, is the Democrat-dominated Legislature, which just spends and spends. They’re irresponsible, the whole lot of ‘em…
The theme has been out there for years, and our new Republican Governor Phil Scott has made it a centerpiece of his administration. He commonly opens his press conferences by reciting three numbers: six, the number of Vermont employees who leave the state each day; three, the number of kids who drop out of our schools each day; and one, the number of babies born each day to opiate-addicted mothers. The only answer, he says, is rigid budget discipline.
In the light of this political narrative, it was fascinating to read a report published last week by the Wall Street Journal examining the economies of the three northern New England states. Maine, New Hampshire and Vermont all have very low levels of unemployment, yet they have significant structural problems with their economies.
The central problem, however, isn’t the lack of jobs for our young people, the Journal said. The problem is that there aren’t enough people to fill the jobs that are there, or would be if workers were available.
Low unemployment rates can pose a particular challenge for largely rural states that don’t have dynamic, big-city markets to attract young talent… A dearth of qualified job candidates caused Nate Beatty to move his growing tech company three years ago from Burlington, Vt., to New York City... In Vermont, (he) would struggle to find candidates to interview and also had difficulty luring young people from big cities. ‘There just aren’t enough people,’ he said. ‘It’s just a simple numbers problem.’ ”
Another example cited in the Journal report: MyWebGrocer in Winooski uses about 150 tech savvy workers in Romania. The company serves a variety of food supply firms. The chief operating officer, Jerry Tarrant, co-founded the company 20 years ago, and the family has long ties to Vermont, but “Vermont is a particularly hard place in an already competitive market for tech workers,” he told the Journal.
The same dynamic is at work in Maine and New Hampshire, the newspaper said, and the dynamic is not limited to tech workers, although both the Vermont examples happened to be. An example cited from New Hampshire involved a firm that hires large numbers of assembly line workers, typical blue-collar jobs.
The story quotes the president of the Federal Reserve Bank of Boston as saying that the fragile labor situation in the northern states of the region poses an important threat: ‘ “I would say that’s a big enough issue, they’re (many businesses) thinking of moving,’ “ he said.
Okay, that sounds like too tight a labor market is a real threat to Vermont and its two neighboring states. Not a word in the whole piece about tax rates, or government spending proclivities. And it’s not as though the WSJ is some liberal rag.
So, what should we derive from this article?
As far as the lure of big city lights, there isn’t much any of the three states can do. Burlington tips the scales at just over 40,000 people; Manchester at about 110,000 and Portland at 66,000. Portland and Burlington are usually considered particularly attractive small cites, but there’s no way they can stack up against places like New York and Boston.
As for rural areas, you have to like them for their own sakes: lovely scenery, often indifferent schools, patchy communications, cross-country skiing through winter woods. But as for getting enough potential employees there, the Journal and the Federal Reserves economists found, forget about it.
So, it’s worth asking whether the Scott strategy is off the mark. He does talk about getting more money to education, which might produce more potentially hirable high school graduates, but in fact there is little or no new money or available. And even if there were, it is far from clear whether a little new money in schools would be adequate to deal with as tenacious a problem as the tight labor market.
What does seem clear is that ascribing the issue itself to the tax policy of Democrats simply won’t wash.
It also seems clear, however, that something like the Journal article is unlikely to have any serious impact on the quality of political debate in the state. In our brave new world of shattered newspapers, the flight of much of the Republican Party from responsibility, the weak response from Democrats, and the subordination of facts and the truth to partisan mud wrestling, an article like the one I’ve cited, will probably sink without a trace.