(HOST) About 15 years ago, commentator Timothy McQuiston, editor of Vermont Business Magazine, gave a talk to a local business group in one of Vermont’s largest towns. He was surprised by their reaction to an "age-old" question.
(MCQUISTON) In the early ’90s I was asked to speak to a local business organization. My main point was that this community had gotten too old. It needed younger people, especially young families who would bring energy, stability, and, most importantly, economic development to the area. The surest way to economic development to the area. I told them, the surest way to economic development was by simple population growth.
In looking back, I wish "sustainability" had been part of my lexicon, because I would’ve said that population growth on the younger side would lead to economic sustainability. Think of it. Young families don’t want to move. They buy a lot of stuff. They buy houses, and then bigger houses, and their household incomes grow with their kids.
None of this is original thinking, of course. But the response from this group went along the lines of, "Kids drive up school costs and property taxes. We looked at this years ago and rejected it."
I was momentarily rendered speechless by such a curmudgeonly response.
But 15 years later, Vermont is still in need of a youth movement.
Last week, economist Dick Heaps laid out discouraging numbers. Every January, Heaps and his colleague Art Woolf, put on the Vermont Economic Outlook Conference. Over the 17 years they’ve been doing this, the economy has been up and down, but mostly up. This year their projection was one of uncertainty.
In short, Heaps said the Vermont economy tracks the condition of the national economy pretty closely. And the national economic weather forecast is partly cloudy.
But Heaps most forceful point was on Vermont’s demographics dilemma. In 2003 in Vermont, there were as many younger workers as older ones. Before that there were more younger workers. Since then, there have been more older ones. "Old" by the way, is 45 to 64. So much for 50 being the new 30.
The result of this is pretty obvious. Who’s going to be doing all the work and paying all the taxes in the near future? And the numbers suggest that the problem is already upon us.
For instance, the unemployment rate is still relatively low – noticeably lower than the national average. But according to raw numbers, the unemployment rate still looks good only because job creation is virtually at a standstill. Jobs are going begging mainly because the labor force has grown so slowly. Labor force is the denominator in all these things. And this is not an enviable position for the state to be in.
The average Vermont wage still looks good, but in part that’s because of the relative number of older workers, who earn more, and the squeeze on the job market, which is driving up wages.
Of course, not too many businesses have the luxury of just pulling up stakes and moving to a sunnier labor market. But some do. And it doesn’t take too many movers to make it hurt quite a lot.