December Numbers Help Bring 2014 Job Picture Into Focus
Over the course of last year the Vermont unemployment rate bumped up and down quite a bit from month-to-month, and the December figure of 4.2 percent is actually higher than it's been most of the year.
University of Vermont economist Art Woolf says the current employment and job figures are preliminary, but once they are revised the bumps should flatten out and show a positive downward trend.
“The unemployment rate is going down and its going down for good reasons,” he says.
One reason Woolf is referring to is the growth of the labor force.
Prior to last summer there was evidence that unemployment was going down largely because some people simply gave up job-hunting.
They weren’t counted as part of the labor force.
But based on current numbers, the labor force has now grown for four consecutive months.
The proof that that people are finding work is that despite the fact more people are looking for work, the unemployment rate has stayed relatively steady over that period.
"I think that will be the story of 2014; that the labor force is increasing but there are also more jobs." - Economist Art Woolf
“I think that will be the story of 2014; that the labor force is increasing but there are also more jobs,” Woolf says.
He is concerned, though, about the kinds of jobs being created.
The job information for the last six months of the year is still preliminary, but Woolf says it appears there’s been an increase in lower paying hospitality industry jobs and a decline in some better paying jobs.
“Jobs are a nice measure, but really what we’re looking for is, ‘how’s the average family doing in terms of their income,’” he explains.
That’s the $64,000 question, which minus a little bit, is what Woolf expects the average Vermont family income to be in 2014.
It would mean a growth rate of a respectable 2 percent annually, similar he says, to the growth in 2013.
But now we begin to slide down a slippery statistical slope: Which figures do we use, what do they mean and how reliable are they?
Woolf’s family income figures come from the tax department and include 61.5 percent of Vermont households. They’re based on taxpayer filings.
But the other 38 percent – the non-family households – are often lower wage earners.
In its most recent report on the State of Working Vermont, the Public Assets Institute uses figures based on U.S. Census Bureau surveys that include non-family households.
"The question is, are most Vermonters making enough money to live and the answer is that fewer Vermonters are making a livable income." - Paul Cillo of the Public Assets Institute
Using those figures, the picture isn’t as bright.
“Jobs is one thing, but then the question is are most Vermonters making enough money to live and the answer is that fewer Vermonters are making a livable income,” says executive director Paul Cillo.
Cillo says the apparent growth in labor force and job numbers in 2013 is good, but they are still below what they were before the recession.
“This has kind of been the trend over the last several years, which is things are getting better but very slowly getting better," he says.
Cillo says he’s concerned that too many people aren’t benefiting from the state’s economic growth.
Whether Vermont can return to peak labor force numbers is an open question. It will depend on whether younger workers enter the labor market in greater numbers than retiring workers and how many discouraged workers drop out.
This story was updated at 6:30pm on Wed. 1/28 to reflect the following correction: An earlier version stated, "Woolf’s family income figures come from the tax department and include 75 percent of Vermont households." The actual figure is 61.5 percent.