Businesses Struggle To Find Workers As Vermont Labor Force Hits Historic Lows
Vermont’s labor force in April shrank to its lowest size in nearly 30 years, and the loss of workers is affecting operations at businesses across the state.
On the Mountain Road in Stowe on a recent afternoon, the tourist traffic was as thick as a powder day in mid-winter. But Mark Frier’s restaurant, called The Bench, was closed.
“We’re sitting in a restaurant that traditionally was open seven days a week,” Frier explained.
These days, he’s down to five days a week.
It isn’t business that’s lacking for Frier. It’s the staff he’d need to cook for and serve hungry customers. And while he’s raised starting hourly rates for new employees, and even purchased cars and given out loans to existing staff, Frier said he can’t maintain the numbers he needs to keep operations flowing.
“We have to have a certain amount of people in this building or we don't open, and so that’s our problem right now, is that we just close, and we close a lot,” Frier said.
In 2009, Vermont’s labor force hit a peak of about 360,000 people. In April, it was down to 315,000 — the same size it was in 1994.
Much of that decline has come over the past 18 months, when Vermont saw the number of the people in the labor force drop by nearly 28,000.
Economists like Mat Barewicz, who manages the economic and labor market information division at the Vermont Department of Labor, have been trying to figure out why.
“So an economist is interested in scarce resources. That by definition is the study of economics,” Barewicz said. “A lot of people associate economics with money. Money is an example of a scarce resource.”
But so is labor Barewicz says, and time. And the main reason that fewer Vermonters are using their time for labor, he says, is they’re getting older.
“The story is basically demographics,” he said. “This is very much America’s story. Vermont is a little bit on the leading edge of this story, because our age profile of Vermonters does skew a little higher.”
While baby boomers aging out of the workforce might explain steady losses over the past decade, Barewicz says data on hand at the Department of Labor doesn’t entirely explain why 28,000 people left the Vermont labor force during the pandemic.
Frier thinks housing a big factor: He’s lost workers due to a shortage of affordable housing in the area.
But for other people, it might be lack of access to child care, or something as simple as transportation.
“And ultimately at the individual ... level, these are all very difficult decisions, and very nuanced for their own particular circumstances,” Barewicz said.
Cary Brown, executive director of the Vermont Commission on Women, has also spent a lot of time thinking about labor trends recently.
A study by the Vermont Commission on Women found that women in Vermont were more likely than men to go on unemployment during the pandemic. According to national statistics, they’re also leaving the workforce at higher rates than men.
“We’ve really thought a lot about that question of, ‘why?’ And I don’t have an easy answer to that,” Brown said. “I will that say that finding out why is a much bigger, more complicated question to answer than the a lot of the data that we have available to tell us.”
While Brown may not have any empirical data that answers the question of why so many women have left their jobs, she says the commission has some educated guesses.
“Is it lack of childcare? Is it lack of flexibility with work? Is it that they have vulnerable people at home that they need to take of? These are all things that can be true,” she said.
“Is it lack of childcare? Is it lack of flexibility with work? Is it that they have vulnerable people at home that they need to take of? These are all things that can be true.”
One factor that’s not contributing significantly to the decline in the labor force is the $300 weekly bonus that’s been added to jobless Vermonters’ unemployment checks. That’s because if you’re on unemployment, you’re counted as part of the workforce, with one pandemic-era exception: self-employed Vermonters collecting benefits from the Pandemic Unemployment Assistance Program are not included as part of the labor force.
Dustin Degree, deputy commissioner of the Vermont Department of Labor, said the shrinking labor force has reframed the way policymakers view economic development.
He says state policies used to focus heavily on finding anchor businesses to create jobs.
“Everybody was lamenting when IBM left, and you want Ben & Jerry’s to expand here, and everyone’s upset that Koffee Kup closed and Energizer closed in Bennington, and we’ve always kind of looked at jobs being the economy,” Degree said.
But in fact, he said, it's the workers themselves that allow local economies to flourish.
“The reality is that the workforce itself is what allows those jobs to exist," Degree said.
He noted that many workforce development initiatives got sidelined during the pandemic. But as Vermont emerges from COVID-19, Degree says finding ways to replace or reclaim the workers who’ve left will be labor force will be a top priority for the Scott administration.