STATE of WORKING VERMONT 2015 - Public Assets Institute · And figures released in December 2015...

STATE of WORKING VERMONT

2015

TABLE OF CONTENTS

Introduction

Incomes at the top are growing

The middle class is losing ground

The poor are left behind

Vermont’s labor market

Vermont’s workers

Recommendations

Glossary

1

3

8

12

15

19

24

25

11

Vermont’s economy began to grow again after the recession, but has since cooled off. Even before the recession, real economic growth was slow. And figures released in December 2015 show that Vermont’s gross state product—the value of goods and services produced in the state—was essentially the same in 2014 as it was in 2011, after adjusting for inflation.

Vermont’s labor market also faced challenges. Although employers finally replaced all of the jobs lost in the Great Recession, total employment in 2014—which counts farm and nonfarm workers as well as the self-employed—lingered below the 2006 peak and fell for the third year in a row. And while Vermont had the 5th lowest unemployment rate in the country, many Vermonters were underemployed or had given up looking for work.

Among the states, Vermont had the 14th highest percentage of working-age population in the labor force—either working or actively looking for a job. But there were fewer younger people in the labor force, due primarily to a smaller number of 35-to-54-year-olds in the population than prior to the recession. The labor force was more balanced by gender than in other states. However, unemployment for men remained higher than for women.


2015

2

Since the bottom of the recession, as the benefits of economic growth have flowed primarily to those who were better off, the middle class has been struggling, and too many Vermonters, especially children and single mothers, have been living in poverty. In 2014:

• Rising costs coupled with lower incomes made it harder for middle-class families to make ends meet. • Vermonters had not saved enough for retirement. • Many more families were relying on food stamps than before the recession. • More than half of Vermont’s most vulnerable families—single mothers with young children—were living in poverty. • Poverty increased for children overall; nearly 3,000 more children lived in poverty than in 2008. • More Vermonters were homeless.

Economic expansion alone will not solve Vermont’s problems. Policy changes over the last 35 years produced stark disparities in wealth and income between those at the top and everyone else, and new policies are needed to reverse that trend.

Reducing the income gap1 and making public investments in infrastructure and education would strengthen the economy, which in turn should boost employment again. Getting more people into good jobs and leaving fewer in poverty would not only better Vermonters’ lives but also help resolve some of the state’s perennial budget problems. While Vermont can’t exert much influence on the national economy, it can adopt policies that move the state in the right direction.

Policies that increase wages and reduce the income gap, make health care and child care more affordable and accessible, and ensure that all children have the skills they need when they graduate from high school can help to make Vermont a state works for everyone. In the long run, Vermont will be better off when all Vermonters are better off.

1 Standard & Poor’s, “How Increasing Income Inequality is Dampening U.S. Economic Growth, and Possible Ways To Change the Tide,” Aug. 5, 2014,

State of Working Vermont 2015—created in conjunction with the Economic Policy Institute in Washington, D.C.—highlights how Vermonters and their families are faring in the current economy. It shows how economic conditions have changed, for better or worse, in recent years, to help policymakers focus attention and resources on the problems Vermonters face. The charts in this report use 2014 data, with additional data from previous years providing context or revealing trends. In two cases we have used available 2015 data because they present a more accurate picture.

https://www.globalcreditportal.com/ratingsdirect/renderArticle.do%3FarticleId%3D1351366%26SctArtId%3D255732%26from%3DCM%26nsl_code%3DLIME%26sourceObjectId%3D8741033%26sourceRevId%3D1%26fee_ind%3DN%26exp_date%3D20240804-19:41:13

https://www.globalcreditportal.com/ratingsdirect/renderArticle.do%3FarticleId%3D1351366%26SctArtId%3D255732%26from%3DCM%26nsl_code%3DLIME%26sourceObjectId%3D8741033%26sourceRevId%3D1%26fee_ind%3DN%26exp_date%3D20240804-19:41:13

3

SWVT 2015

Incomes at the top are growing

While the economy has grown, not everyone has benefitted. After adjusting for inflation, the gross state product has grown since 2010, with a slight dip in 2013. But the rewards of Vermont’s recovery concentrated at the top of the income scale, while everyone else lost ground. In the decade since 2004 median household income fell from $58,328 inflation-adjusted dollars to $54,166.

-‐15.0%

-‐10.0%

-‐5.0%

0.0%

5.0%

10.0%

FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Vermont's Economy Grew, But Income Didn't for Many Households Change in Vermont gross state product and median household income, 2004-‐2014, adjusted for inflaGon

Income change from 2004 GSP change from 2004

Vermont’s economy grew, but most incomes did not Change in Vermont gross state product and median household income, 2004-2014, adjusted for inflation

10%

5%

0%

-5%

-10%

-15%

Data source: U.S. Bureau of Economic Analysis; U.S. Census American Community Survey, 2014, 1-year estimates©2015 Public Assets Institute

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

+6%

-7%

GROSS STATE PRODUCT CHANGE FROM 2004

INCOME CHANGE FROM 2004

Incomes at the top are growingSTATE of WORKING VERMONT 2015

44

The gap between those at the top and everyone else has grown. Between 1980 and 2013, the share of Vermont’s total income going to the top 1 percent nearly doubled, and the bottom 99 percent were left sharing a smaller portion. Incomes at the top grew substantially. In 1980, the 1 percent’s total income was nearly $700 million, adjusted to 2014 dollars. By 2013, that amount had increased more than threefold, to $2.4 billion, again in 2014 dollars.

Top 1 percent increased their share of income Share of total income going to the top 1 percent, 1980-2013

20%

15%

10%

5%

0%

Data source: Mark Frank, Estelle Sommeiller, Mark Price, and Emmanuel Saez, “Annual Top Income Shares by U.S. State, 1917-2013”©2015 Public Assets Institute

1980

1984

1988

1992

1996

2000

2004

2008

2013

0%

5%

10%

15%

20%

1980

1984

1988

1992

1996

2000

2004

2008

2012

1% of Taxpayers Received Nearly 14% of Income Share of total income received by the top 1%, 1980-‐2013, with trend line

THE TOP 1% GOT 13.4% OF VERMONT’S TOTAL INCOME IN 2013

http://www.shsu.edu/~eco_mwf/inequality.html

http://www.shsu.edu/~eco_mwf/inequality.html


5

If the economic expansion were shared fairly with all workers, median household income growth would more closely track economic growth. Had this been true in the current recovery, as it was in past expansions, median household income would have been nearly $62,000 in 2014—$7,680 higher than it was. Instead, after adjusting for inflation, the median Vermont household earned about $4,000 less than it had a decade earlier.

$40,000

$45,000

$50,000

$55,000

$60,000

$65,000

$70,000

FY2004 FY2005 FY2006 FY2007 FY2008 FY2009 FY2010 FY2011 FY2012 FY2013 FY2014

Vermonters Would Have More to Spend if Incomes Kept Pace with Economy Actual median household income vs. growth that tracked Vermont gross state product, adjusted for inflaEon

Actual Income Projected Income

Vermonters’ incomes would be higher if they grew with the economy Median household income, actual vs. projected at gross state product growth rate, adjusted for inflation, 2004-2014$70,000

$65,000

$60,000

$55,000

$50,000

$45,000

$40,000

Data source: U.S. Census, American Community Survey, 2014 1-year estimates; U.S. Bureau of Economic Analysis©2015 Public Assets Institute

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

PROJECTED INCOME

ACTUAL INCOME

$7,680

WHAT COULD AN EXTRA $7,680 BUY?

$7,680


6

In earlier periods of economic expansion, gains were more fairly distributed. From 1949 to 1953, the bottom 99 percent enjoyed 96 percent of income growth. As recently as 1979, the bottom 99 percent laid claim to 92 percent of income growth.

Since the 1982-1990 expansion, however, those at the top have reaped more and more of the rewards of growth. In the current recovery, 2009 to 2012, the bottom 99 percent have received only 57 percent of income gains, while 43 percent went to the top 1 percent. According to the latest data on the distribution of income in Vermont, the top 1 percent of taxpayers averaged $717,000 in income, while the bottom 99 percent averaged just under $47,000.

2009-2012

Data source: Mark Frank, Estelle Sommeiller, Mark Price, and Emmanuel Saez, “Annual Top Income Shares by U.S. State, 1917-2013”©2015 Public Assets Institute

-‐10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

110%

1949-‐1953 1954-‐1957 1958-‐1960 1961-‐1969 1970-‐1973 1975-‐1979 1982-‐1990 1991-‐2000 2001-‐2007 2009-‐2012

In Decades Past, Everyone Shared in Economic Growth Share of Vermont income growth going to top 1% and bo?om 99% during periods of economic expansion

bo0om 99% top 1%

Recent expansions rewarded the havesShare of Vermont income growth going to top 1 percent and bottom 99 percent during economic expansions

110%

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

-10%1949-1953

1954-1957

1958-1960

1961-1969

1970-1973

1975-1979

1982-1990

TOP 1% GOT MORE THAN

HALF OF ALL INCOME

GROWTH

1991-2000

2001-2007

TOP 1%BOTTOM 99%

ECONOMIC EXPANSION PERIODS


7

Vermont’s income tax system is one of the nation’s most progressive— meaning higher-income people pay a higher rate. But the overall tax structure remains regressive: Lower-income people pay a greater share of their income in taxes. Totaling all state and local taxes—including sales, excise, property, and income—the top 1 percent pay the smallest share of their incomes in taxes.

MIDDLE-INCOME HOUSEHOLDS PAY THE HIGHEST PERCENTAGE OF INCOME IN STATE AND LOCAL TAXES

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

Lowest 20%

<$19K

Second 20%

$19K-‐$38K

Middle 20%

$38K-‐$58K

Fourth 20%

$58K-‐$88K

Next 15%

$88K-‐$172K

Next 4%

$172K-‐$391K

Top 1%

$391K+

CHART 5: State and Local Taxes Favor the Highest Incomes Shares of household income paid in taxes (non-‐elderly filers) 2015 TOP 1%

PAYS THE LEAST

State and local taxes favor the highest incomes Shares of household income paid in taxes (non-elderly filers), 2015

12%

10%

8%

6%

4%

2%

0%

Data source: Institute on Taxation and Economic Policy, “Who Pays?” ©2015 Public Assets Institute

Lowest20%

Less than $19,000

Second20%

$19,000-$38,000

Middle20%

$38,000-$58,000

Fourth20%

$58,000-$88,000

Next15%

$88,000-$172,000

Next4%

$172,000-$391,000

Top 1%

$391,000+

HOUSEHOLD INCOME

8

The middle class is losing ground

SWVT 2015

Income shrank, costs roseChange in income and costs, inflation adjusted, 2004-2014

Data source: U.S. Census, American Community Survey, 2014, 1-year estimates; U.S. Department of Housing and Urban Development; Joint Fiscal Office, Vermont Department of Children and Families, The Commonwealth Fund, Vermont Student Assistance Corp.©2015 Public Assets Institute

NOTE: Child care data is for 2006-2014, health insurance data for 2003-2013.

-20% 0% 20% 40% 60% 80%

Median Income

Rent Statewide

Child Care

Health Insurance

University of Vermont

Excluding Burlington area

Preschool age, licensed center

Employee share, family plan

Annual tuition, room & board

-‐20.00%

0.00%

20.00%

40.00%

60.00%

80.00%

University of Vermont

Employee Share Health Insurance -‐ Family

Child Care Preschool Age Licensed Center

Rent Statewide (excluding Burlington area)

Median Income

Costs Are Rising, Income Is Shrinking Income and Costs, Adjusted Dollars 2003-‐2014

Except for those at the very top, Vermonters lost ground over the last decade. Adjusted for inflation, the costs of child care, housing, health insurance, and college increased by double digits from 2004 to 2014, while median household income shrank 7 percent. The cost shift of health insurance onto employees was particularly significant over the decade, increasing nearly 70 percent for a family.

CHILD CARE COSTS GREW 20% DURING THE SAME PERIOD THAT MEDIAN INCOME SHRANK 7%

The middle class is losing groundSTATE of WORKING VERMONT 2015

9

Most people think of themselves as middle class, and that tends to include a sense of self-sufficiency—being able to cover expenses with a little left over. But with rising costs and falling incomes, a family of four with median income had 58 percent less at the end of the month after covering housing, health care, child care, food, and transportation in 2014 than it did in 2004. There was little left to save for retirement, college, or a rainy day.

Data source: Joint Fiscal Office; U.S. Census, American Community Survey, 2014, 1-year estimates©2015 Public Assets Institute

A ‘middle-class’ family had less to spareBasic needs budget compared to median income for a family of four, 2004 and 2014

2004 2014FOOD

HOUSINGTRANSPORTATION

HEALTH CARECHILD CARE

PERSONAL & HOUSEHOLDTAXES

REMAINDER

2004 Food

Housing

Transporta0on

Health care

Child care

Personal & household

Taxes

Remainder

2014 Food

Housing

Transporta0on

Health care

Child care

Personal & household

Taxes

Remainder

17%

5%


10

Every other year, the Vermont Legislature’s Joint Fiscal Office calculates a Basic Needs Budget based on family size. The Vermont minimum wage was technically enough to keep a single parent with one child out of poverty in 2014—but it fell short of the amount needed to cover the family’s basic needs. According to the most recent report from the Joint Fiscal Office, a single parent with one child needed a little over $51,000 to meet basic needs. In 2014, that was more than the median family income for Vermont single fathers, and more than twice the median family income for Vermont single mothers.

Many single parents couldn’t afford the basics Median income for single parent families vs. poverty, minimum wage, and basic needs, 2014

$60,000

$55,000

$50,000

$45,000

$40,000

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0

Data source: Joint Fiscal Office, Vermont Department of Labor, U.S. Department Health & Human Services, U.S. Census, American Community Survey, 2014, 1-year estimates ©2015 Public Assets Institute

Single mother with children

Single father with children

BASIC NEEDS BUDGET FOR SINGLEPARENT WITH ONE CHILD

ANNUALEARNINGS FOR FULL-TIMEMINIMUM-WAGEWORKER

FEDERAL POVERTY LEVEL FOR SINGLE PARENT WITH ONE CHILD

$24,346

$43,880


11

Increasing household costs and shrinking income have diminished families’ ability to save. Nationwide, nearly half of all private-sector workers did not have any retirement savings. Four-fifths of households in the bottom 20 percent had nothing saved for retirement.2

Those who have saved have not saved enough, and Vermonters are socking away even less than Americans overall. Average total savings in Vermonters’ defined contribution plans—such as IRAs—ranked lowest in the nation in 2012: just under $20,000, compared with a U.S. average of $30,345. Retirement experts recommend a nest egg of at least eight times income by age 67, which for the median one-person household in Vermont would be about $217,000 in 2014.

2 Christian E. Weller, Nari Rhee, and Carolyn Arcand, “Financial Security Scorecard: A State-by-State Analysis of Economic Pressures Facing Future Retirees,” National Institute on Retirement Security, 2014

Vermonters’ nest eggs were far too small Average retirement savings for Vermont and U.S., 2012; and recommended Vermont savings, 2014

$250,000

$200,000

$150,000

$100,000

$50,000

$0

Data source: National Institute on Retirement Security ©2015 Public Assets Institute

Vermont U.S. Recommended $-‐

$50,000

$100,000

$150,000

$200,000

$250,000

Vermont US Savings Needed VT

Many Vermonters Haven't Saved Enough for Re8rement Average Vermonter's savings compared to U.S. average and recommended re8rement savings amount

$216,792

By age 67,a typical

Vermonter’snest egg

should be at least

12

The poor areleft behind

SWVT 2015

The distribution of benefits in this economic recovery is hurting middle-income Vermonters. But the poor are even worse off. While 2014 saw a slight dip in the trend, poverty—along with homelessness and food insecurity—has been rising in Vermont. More than 73,000 Vermonters were living in poverty in 2014, compared with 54,000 in 2004—an increase of 35 percent. Poverty rates were also higher in 2014 than at the official end of the recession in 2009.

2014Poverty threshold

by family sizeOne person $11,670 Two people $15,730Three people $19,790Four people $23,850Five people $27,910

14%

12%

10%

8%

6%

4%

2%

0%

Poverty plagued 1 in 8 Vermonters Annual poverty rate with 10-year trend line, 2004-2014

Data source: U.S. Census, American Community Survey, 2004-2014, 1-year estimates; U.S. Department of Health and Human Services©2015 Public Assets Institute

2006

2007

2008

2009

2010

2011

2012

2013

2014

2004

2005

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

The Share of Vermonters Living in Poverty Has Been Rising Steadily Annual Poverty Rate with 10-‐Year Trendline

The poor are left behindSTATE of WORKING VERMONT 2015

13

More than half of Vermont’s single mothers with young children lived in poverty in 2014. For single mothers the poverty rate was more than three times the state average. The poverty rate was even higher for single mothers with young children—more than four times the state average.

53% SINGLE MOTHERS

WITH CHILDRENUNDER 5 LIVING

IN POVERTYIN 2014

Single mothers were worst off Vermont poverty rate for selected categories, 2014

60%

50%

40%

30%

20%

10%

0%

Data source: U.S. Census, American Community Survey, 2014 1-year estimates©2015 Public Assets Institute

65 andolder

AllVermonters

Children under 18

Single mothers

Single mothers

with children under 5

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

65 and older

All Vermonters

Children under 18

Single mothers

"Single mothers w/children under 5

Poverty Was Higher Than During the Recession Percentage of Vermonters in Poverty by Category

2014

The poor are left behindSTATE of WORKING VERMONT 2015

14

The number of Vermonters with no place to live dropped a bit in 2015, but homelessness remained higher than it was at the end of the recession. According to the latest annual homeless count by the U.S. Department of Housing and Urban Development, the number of homeless Vermonters fell 2.3 percent this year, to 1,523. But that was a 25 percent increase since the official end of the recession in 2009.

In the four years leading up to the recession, an average of 47,000 Vermonters received food stamps through the state’s 3SquaresVT program. Since the official end of the recession, that average has nearly doubled. In 2014, the number of 3SquaresVT participants started to decline. Still, nearly 1 in 7 Vermonters needed assistance to put food on the table.

Nearly 1 in 7 Vermonters needed food stamps Annual average of total 3SquaresVT recipients, 2004-2014

120,000

100,000

80,000

60,000

40,000

20,000

0

Data source: Vermont Department for Children and Families©2015 Public Assets Institute

2006

2007

2008

2009

2010

2011

2012

2013

2014

2004

2005

0

200

400

600

800

1000

1200

1400

1600

1800

2007 2008 2009 2010 2011 2012 2013 2014 2015

Homlessness Grew More A.er the Recession Vermont's annual January homeless count, 2007-‐2015

Homelessness grew faster after the recession Vermont’s annual January homeless count, 2007-2015

1800

1500

1200

900

600

300

0

Data source: U.S. Department of Housing & Urban Development©2015 Public Assets Institute

2015

2007

2008

2009

2010

2011

2012

2013

2014

15

VERMONT’SLABOR

MARKET

SWVT 2015

Net fewer Vermonters at work since 2006 peak1

Employers replaced the jobs lost during the last recession, but the number of Vermonters working in 2014 was

still below the peak in 2006. In April of that year, Vermont employment hit its highest level ever: just over 344,000 people at work. At the end of 2014, employment lagged nearly 10,000 behind that number.

Vermont has seen deeper recessions than the last one, the Great Recession. But this slump was followed by the slowest recovery in at least 40 years. Employers shed jobs for 18 months, and then it took until the middle of 2014—nearly five years—before payroll jobs returned to pre-recession levels. In the recession of the early 1990s, a greater proportion of the state’s jobs disappeared. But that recovery took just over three years.

The number of Vermonters working dropped between 2009, the official end of the recession, and 2014. But not all areas of the state lost ground. In Chittenden County, with more than a quarter of the state’s labor force, the number employed rose nearly 8 percent. Franklin and Washington were the only other counties where employment increased.

9,808

2009 - 2014

ONLYCHITTENDEN, FRANKLIN & WASHINGTONCOUNTIESSAW NETGAINS IN EMPLOYMENT3

1 U.S. Bureau of Labor Statistics, Jeffrey Thompson, Political Economy Research Institute2 Vermont Department of Labor3 U.S. Bureau of Labor Statistics

MONTHS TORECOVER

JOBS

1981recession 61990recession 372001recession 292007recession 57

LATEST

SLUMP,LONGEST

CLIMBOUT2

Vermont’s labor marketSTATE of WORKING VERMONT 2015

16

Vermont enjoys one of the lowest unemployment rates in the country. For 2014, just 4.1 percent of the labor force was officially unemployed. But that doesn’t tell the whole story, because the official jobless rate counts only people who actively looked for work in the previous four weeks.

The U.S. Bureau of Labor Statistics (BLS) uses alternative measures of unemployment that provide a broader picture of the demand for jobs. Through its regular household surveys, the BLS also tracks discouraged workers, those who have sought work some time in the past year, and those who have looked more actively but not in the past four weeks. Another category, sometimes referred to as “underemployed,” comprises people working part time who would rather have full-time jobs. Including these alternative measures, Vermont’s unemployment rate in 2014 was 8.8 percent.

Official jobless rate doesn’t count all who want work Official unemployment rate (U3), plus alternate measures of unemployment (U5 and U6), 2004-2014

14%

12%

10%

8%

6%

4%

2%

0%

Data source: U.S. Bureau of Labor Statistics©2015 Public Assets Institute

2004

2005

2006

2007

2008

2009

2010

2011

2013

2014

2012

PART TIME, BUT LOOKINGFOR FULL TIME (U6)

OFFICIAL UNEMPLOYMENT RATE (U3)

DISCOURAGED OR NOT ACTIVELYLOOKING FOR WORK (U5)

UNDEREMPLOYED AND DISCOURAGED WORKERS PUSHED “REAL” JOBLESS RATE HIGHER


17

The nature of work has changed in Vermont, as it has throughout the country. Fewer people have jobs where they’re making things or selling goods, and more are paid to provide and deliver services. In the decade ending in 2014, Vermont lost 6,000 manufacturing jobs—more than 1 in 5. In the same period, it gained 9,500 jobs in education and health services, with nearly all the gains in health services. Between 2004 and 2014, Vermont netted 6,900 new jobs.

-‐9,000

-‐6,000

-‐3,000

0

3,000

6,000

9,000

12,000

Educa/on & Health Svcs

Professional & Business Svcs

Governm

ent

Leisure & Hospitality

Manufactured Non-‐Durable Goods

Other Svcs

Transporta/on & U/li/es

Wholesale Trade

Financial Ac/vi/es

Inform

a/on

Construc/on & Mining

Retail Trade

Manufactured Durable Goods

Job Growth Has Been in the Service Sectors Change in jobs by sector, 2004-‐2014

New jobs clustered in the service sectors Change in jobs by sector, 2004-2014

12,000

9,000

6,000

3,000

0

-6,000

-9,000

Data source: Economic Policy Institute analysis of Current Population Survey©2015 Public Assets Institute

Educa

tion &

Hea

lth S

ervice

s

Profes

siona

l & B

usine

ss S

ervice

s

Govern

ment

Leisu

re & H

ospit

ality

Manufa

ctured

Non

-Dura

ble G

oods

Trans

porta

tion &

Utili

ties

Who

lesale

Trad

e

Financ

ial Acti

vities

Inform

ation

Constr

uctio

n & M

ining

Retail T

rade

Manufa

ctured

Dura

ble G

oods

Other S

ervice

s

BAKERSBREWERSWINEMAKERSSUPERMARKET EMPLOYEES

CONSTRUCTION WORKERS ELECTRONICS MAKERSPOSTAL WORKERS PRINTERS

2004-2014Jobs lost and gained


18

-‐8.0%

-‐4.0%

0.0%

4.0%

8.0%

12.0%

10th 20th 30th 40th 50th (Median)

60th 70th 80th 90th

Lowest Paid Workers Saw the Biggest Wage Drop Change in Vermont hourly wage from 2009 to 2014, adjusted for inflaEon, by percenEle

Data source: Economic Policy InsFtute analysis of Current PopulaFon Survey data

Lowest-paid workers saw the biggest wage drop Change in Vermont hourly wage from 2009 to 2014, adjusted for inflation, by percentile

12%

8%

4%

0%

-4%

-8%


HIGHEST WAGES,

GREATEST GAINS

10th 20th 30th 40th 50th

(Median)60th 70th 80th 90th

Since the official end of the recession in 2009, wages for the lowest-paid workers dropped the most. Adjusted for inflation, wages for workers at 10th percentile fell by more than 5 percent from 2009 to 2014.* Most other workers also saw a decline in their real hourly wages, but not as much as the lowest paid. The highest wage-earners—those at the 90th percentile—saw their wages increase by over 7 percent.

* Ten percent of workers are paid less per hour than the 10th percentile and 90 percent are paid more.

19

VERMONT’SWORKERS

SWVT 2015

Vermont’s labor force differs from the country’s as a whole. Nearly half of the state’s labor force in 2014 were women, higher than the rest of the U.S. A greater share of Vermont’s workforce was over 55—in part because the state’s population is older than the nation’s—and more working-age Vermonters held a bachelor’s degree or higher. In 2014 Vermont’s workforce was the whitest in the nation—over 95 percent white, compared with less than 65 percent nationally. As percentages of their labor forces, the U.S. had 10 times more African-Americans and 4.5 times more Asian/Pacific Islanders than Vermont did.

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Mal

e

Fem

ale

16-‐2

4 yr

s

25-‐5

4 yr

s

55 y

rs a

nd o

lder

Whi

te

Afric

an-‐A

mer

ican

Hisp

anic

Asia

n/Pa

cific

isla

nder

Less

than

hig

h sc

hool

High

scho

ol

Som

e co

llege

Bach

elor

's or

hig

her

Gender Age Race / ethnicity EducaMon

Vermont's Labor Force Was Less Diverse than the Na6on's Share of labor force by demographic characteris6c, 2014

Vermont U.S.

Vermont’s labor force was whiter than the nation’s Share of labor force by demographic characteristic, 2014

100%

80%

60%

40%

20%

0%


U.S.VERMONT

AGEGENDER RACE/ETHNICITY EDUCATION

Male

Female

16-24

25-54 55

+W

hite

African

-Ameri

can

Hispan

ic

Asian/P

acific

Islan

der

Less

than

high

scho

ol

High S

choo

l

Some c

olleg

e

Bache

lor’s

or hig

her

VERMONT’S LABOR FORCE CONTINUES TO BE OLDER, WHITER, AND BETTER EDUCATED THAN THE NATION’S

Vermont’s workersSTATE of WORKING VERMONT 2015

20

Northern New England’s workforce has long been homogeneous. In 2014, three of the four states with the highest percentage of white workers were in New England. Vermont had the highest share of white workers in the labor force, Maine was second, and New Hampshire ranked fourth.

Thirty-five years ago, all of the New England states had predominantly white labor forces—more than 90 percent. Since then Connecticut, Massachusetts, and Rhode Island have grown more diverse. Whites made up less than 80 percent of workers in those states in 2014.

The mix of people in the workforces has changed even more rapidly in other parts of the country. In California, Texas, and New Mexico less than half of the labor force was white. In Hawaii, only 1 in 5 workers was white.

Southern New England’s workforce grew more diverse Percentage of white workers, 1979 and 2014

100%

80%

60%

40%

20%

0%


VT ME NH RI MA CT U.S.

20141979

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

VT ME NH RI MA CT US

Southern New England Labor Force Has Grown Less Homogenous Percentage of white workers, 1979, 2014

1979 2014


21

At the depths of the recession, men’s unemployment exceeded women’s—and during the recovery women’s bounced back faster. By 2014, unemployment among women was down to 3.6 percent, about where it was before the recession. But for men, the rate was about a percentage point higher than women’s, and higher than it was before the economic collapse.

The drop in unemployment in recent years hasn’t been matched by a corresponding rise in employment—for men or women. The total number of Vermont women employed has dropped since 2009. For men, the total number employed started falling in 2012.

MEN’S 2014 ANNUAL UNEMPLOYMENT RATE: 4.6%

WOMEN’S 2014 ANNUAL UNEMPLOYMENT RATE: 3.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014

Men Were Hit Harder by Recession and Recovery Has Been Slower Annual Vermont unemployment rate by sex, 2006-‐2014

Male Female

The downturn was worse for men than for women Annual Vermont unemployment rate by sex, 2006-2014

8%7%6%5%4%3%2%1%0%


2006

2007

2008

2009

2010

2011

2012

2013

2014

MEN WOMEN


22

More Vermonters over 65 were employed in 2014 than before the recession, but there were fewer people ages 35 to 54 in the workforce. During the same period, 2007 to 2014, the number of Vermonters 65 and older in the labor force increased by 60 percent.

Since the recession Vermont has gained older workers and lost the middle-aged Number in the labor force by age group, 2007 and 2014

100,000

80,000

60,000

40,000

20,000

0

Data source: U.S. Census, American Community Survey, 2007, 2014,1-year estimates©2015 Public Assets Institute

16-24 25-34 35-44 45-54 55-64 65-74 75+

20142007


23

Throughout the U.S. young adults were the most likely to move across state lines. According to IRS data from 2011 to 2012, tax filers under 35 were more than twice as likely to move as those over 35. While Vermont saw a higher proportion of young tax filers move out than many states, more young tax filers also moved into Vermont than most states. From 2012 to 2013 roughly 3 percent of the total population turned over. In every age group, the number of tax filers immigrating was comparable to the number emigrating—and the net effect was minimal.

Data source: Internal Revenue Service©2015 Public Assets Institute

65 and over

55 to 64

45 to 54

35 to 44

26 to 34

under 26

2012+-2013+-

-3,50

0-2,

500

-1,50

0-50

0 03,5

002,5

001,5

00500

PEOPLE IN PEOPLE OUT

Adults under 35 moved out of—and into—Vermont in biggest numbers Tax filers who migrated in and out of Vermont in 2012 and 2013, by age group

ADULTS UNDER 35 WERE THE MOST LIKELY TO MOVE INTO AND OUT OF VERMONT

24

SWVT 2015RECOMMENDATIONS

24

The slow growth of Vermont’s economy and the falling standard of living for many of its residents should inform policymakers that the path they’ve been following is not leading to prosperity for all.

This report should also be a warning to look beyond positive indicators, such as a low unemployment rate or a new business announcing job openings, to see how Vermonters are faring in the slow climb out of the Great Recession. Trends like increasing poverty, especially among children, and homelessness and decreasing middle-class financial security mean that Vermont needs to set a new policy direction.

The state can make investments that increase opportunity for those in poverty, support the middle class, and level the playing field for Vermonters. Policymakers should:

• Invest in infrastructure and education both to boost the state’s economy now and prepare Vermont for the future. • Increase Vermonters’ net wages, especially for those at the bottom, by bringing up the state’s minimum wage at least to the level of a livable wage and reforming Vermont’s tax system to make it more progressive and more responsive to the economy. • Enact state budget reforms that build on the 2012 reforms obligating elected officials to balance fiscal responsibility with the state’s duty to meet Vermonters’ needs. • Continue to work toward universal, affordable health care and child care to help low- and moderate-income Vermont families.

With these changes, Vermont would move closer to a state that works for all.

25

SWVT 2015GLOSSARY

25

Dollar amounts are adjusted for inflation to reflect their real value. Inflation changes the purchasing power of a currency over time, so in order to compare dollar values from one period to another, they are converted from nominal (“current”) dollars to constant (“real”) dollar values. To adjust for inflation this report uses the Consumer Price Index-Urban-Research Series (CPI-U-RS), except for the gross state product, which is adjusted based on the quantity index from the Bureau of Economic Analysis.

Total number of people working, including farm workers and the self-employed, as reported on a monthly survey of households by the U.S. Bureau of Labor Statistics.

A group of two or more people who reside together and who are related by birth, marriage, or adoption.

The market value of goods and services produced by labor and property in a state. GSP is used as a main indicator of economic growth.

All the people who occupy a housing unit as their usual place of residence.

Nonfarm payroll jobs reported in a monthly survey of employers by the U.S. Bureau of Labor Statistics.

The total number employed plus the total number of unemployed as measured by U-3.

The income amount that divides the income distribution into two equal groups, half having incomes above that amount, and half having incomes below it.

Defined by the set of money income thresholds issued annually by the Department of Health and Human Services, accounting for family size and composition. Although there are alternative measures, these are the thresholds on which eligibility for aid programs are based, so they are used in this report.

A tax that takes a larger percentage from the income of high-income individuals than it does from low-income individuals.

A significant decline in activity across the economy, lasting longer than a few months. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s gross domestic product (GDP). The most recent Great Recession officially began in December 2007 and ended in June 2009.

A tax that takes a larger percentage from low-income people than from high-income people.

Adjusted for inflation

Employment

Family

Gross StateProduct (GSP)

Household

Jobs

Labor Force

Median Income

Poverty

Progressive tax

Recession

Regressive tax

PO Box 942Montpelier, VT 05842

802-223-6677

www.publicassets.org

© 2015 by Public Assets InstituteThis research was funded in part

by the Annie E. Casey Foundation. We thank them for their support

but acknowledge that the findings presented in this report are those of

the Public Assets Institute and do not necessarily reflect the opinions

of the Foundation.


2015

http://www.publicassets.org

STATE of WORKING VERMONT 2015 - Public Assets Institute · And figures released in December 2015...

Documents

Transcript of STATE of WORKING VERMONT 2015 - Public Assets Institute · And figures released in December 2015...