Vermont’s lowest-in-the-nation unemployment rate doesn’t tell the whole story

Vermont has the lowest unemployment rate in the nation, but some able-bodied Vermonters still are not joining the workforce for a variety of reasons — including fear of losing welfare benefits.

The state’s unemployment rate for October was just 2.2 percent, the same as the month before, and lower than the 2.6 percent rate from October 2018. The Green Mountain State compares favorably to the national average of 3.6 percent.

However, the recent report by the Vermont Department of Labor indicates that the state added fewer new jobs than was expected.

“Demographics continue to be Vermont’s biggest challenge,” Acting Labor Commissioner Michael Harrington said in a written statement announcing latest numbers. “This month’s Jobs Report shows a continuation of the unprecedented low unemployment rate, prolonging the struggle for employers. Because of this, it is critical for the Department of Labor to engage with employers and jobseekers early to be able to link skill with need.”

Wikimedia Commons/Alex

WORKERS NEEDED: Vermont’s record-low unemployment numbers sound good on the surface, but some able-bodied workers still are not engaging in the workforce for a variety of reasons.

Despite the low unemployment, there are more potential workers out there for employers to seek than the report suggests.

The U-3 metric for reporting unemployment is the official unemployment rate, but it counts only workers who are actively seeking employment. That statistic ignores part-time workers who would like full-time work, and it also excludes “discouraged” unemployed persons who have quit looking for a job.

An alternative measure of unemployment, the U-6 rate, tells a different story. The U-6 rate counts both underemployed individuals and also discouraged unemployed persons who aren’t actively seeking a job.

In Vermont, the U-6 unemployment rate is  5.3 percent.

According to Mathew Barewicz, Vermont’s Economic and Labor Market Information chief, that includes Vermont’s 8,200 “involuntary part-time workers.” Some of these people are part-time because they are not being offered more hours, and others are working part-time for “economic reasons,” Barewicz told True North.

The U-6 number also includes about 500 “discouraged” Vermonters — unemployed people who have stopped looking for a job.

“They believe that there’s no work out there for them and so they’ve given up looking,” he said. ” … That could be maybe because they are in a remote part of the state, and maybe they don’t have transportation.”

Another alternative metric, the U-5 rate, counts total unemployed, plus discouraged workers, plus all other marginally attached workers. This statistic includes about 2,600 people, including the 500 discouraged Vermonters who have given up looking for a job.

“This means there are about 2,100 people who are marginally attached to the workforce and are basically saying they haven’t been looking for work recently, they might not be able to accept work if offered,” Barewicz said. “These are people potentially with barriers to employment.”

He said these people may be single parents, those taking care of the elderly, or people with health issues.

“There’s something that would put them in this basket where they, in essence, want work but they cannot accept work,” he said.

But another factor affecting who looks for work is welfare. Vermont’s welfare spending ranks fourth in the nation. The Green Mountain State spends $2,842 per capita, and $1.77 billion in total. How this impacts unemployment has to do with “benefits cliffs,” or situations in which gaining employment or additional pay results in losing one’s welfare benefits.

A 2017 UVM study explains how Vermont attempts to deal with this challenge.

“Vermont has been taking strides to smooth the benefits cliff, so that recipients of social assistance programs — Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), Medicaid, and Unemployment — have the supports necessary to gradually lessen their reliance on public assistance, while increasing their income and wage-earning hours,” the study states.

Barewicz says his office doesn’t have data on how the benefits cliff affects unemployment data, but he said it’s a real issue.

“It’s difficult for a federal survey to collect information from people who’d be willing to share that, but having worked at the Department of Labor, I’ve heard the commissioner in conversations with employers who have said some similar things where an employer was willing to promote or offer more hours and the individual refused,” he said.

He added that he can’t be sure if such individuals are refusing jobs or more hours because of how it would affect their welfare benefits.

“It really comes down to the mindset — is that an economic reason in their mindset?” he said.

Labor Commissioner Harrington states he’d like to see more Vermonters get back to work through involvement in the State Registered Apprenticeship Program. There are at least 28 registered apprenticeship programs with more than 350 employers, and more than 2,000 apprentices were enrolled in the past year.

“If you are an employer with open positions, please consider one of our existing programs or creating your own registered apprenticeship program, and if you are looking for work, there is no better time than now to expand your skill base,” he said.

Michael Bielawski is a reporter for True North Reports. Send him news tips at bielawski82@yahoo.com and follow him on Twitter @TrueNorthMikeB.

Image courtesy of Wikimedia Commons/Alex
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9 thoughts on “Vermont’s lowest-in-the-nation unemployment rate doesn’t tell the whole story

  1. Bit of actual history:
    In HS Springfield, graduated 1957. Upon graduation I had my journey machinist rating sanctioned by the state and have the papers. The HS had a Cooperative Machining course, best and only one like it in the nation. The teachers and administration fully supported and had free rein to provide the best for the students, none of the NEA stuff of today.

    After HS we were hired immediately into each (about 5) companies in Spfld (Gear Shaper, Bryants, J&L, Lovejoy, Parks & Wilson, Great Eastern). Spfld had many good companies, world respected. Windsor had Cone & Blanchard. The area was known as Precision Valley I made a whopping $0.50 an hour. The course required 5 weeks in the shops learning a different machine operation (diff departments) and then 5 weeks in HS.

    In that time it was known the area was on Russia’s top 10 list to bomb. We had drills about surviving the A-Bomb. Spfld also was a key manufacturer of war items during WW2.

    My HS machining experience provided a base to launch onto my various careers including getting a BSME, and engineering business for 26 years. I don’t think I could have done it all without the Spfld experience. Also with 4 years in the Air Force, you get responsibility real fast being around the KC-135’s (refueler’s) and B-52’s with nukes, flying on both some at 24 hrs at a time, airborne alerts. Dangerous times in the late ’50’s and early 60’s.

    Some contrast as today’s situation is controlled by the Flatlander Libs in Montpelier. In ’57 the ratio of student to staff was about 100:5. Today it’s 3:1 and the kids are failing and families are moving out of state to better places.

    My two cents. VT gave me a lot back then, but I applied myself.

  2. Told to me first hand. landscaped co. hired a young man, first in his extended family to EVER hold a job. Great worker, rai$e, – he lost one welfare benefit, another raise, another benefit gone, promoted to crew chief- lost most welfare, Another raise, and the employee had to quit. He loved his family with 4 kids – and that raise would keep him from getting a 3 bedroom welfare apartment his family really needed, but couldn’t possibly afford.

    Gov’t mandates makes housing unaffordable, and work unprofitable. THE WELFARE TRAP

  3. Forgotten are John McClaughry’s 2013 findings:
    “Vermont ranks eighth in pretax wage equivalent of the welfare benefit package, at $42,350. This number, representing what the household would have to earn to pay for the benefits after taxes, has increased by $10,770 since 1995, by far the largest increase of any state.”

    That was almost 7 years ago.

    Who would want to work (above board that is) when benefits are so lucrative.

  4. You see they want the benefits cliff, they are purposely trapping people in generational poverty, it is their true intent!

    You ask why would anybody want to do that? It doesn’t make sense. All true, but then you need to follow the money, as my friend says.

    Peolple have very good high paying careers with massive benefits for keooping people In these programs. Our housing night mare which is socialist housing, rowing from the state, state subsidizing rent is making people stinking rich! They have millions into this program, grants for all those connected. Think they want to change that gravy train?

    In socialist countries, those connected to government love the system, sound familiar. The people living in the socialist countries, not so much. Apparently some are more equal than others. Too funny, Vermont needs to shed our socialist shackles, they are hurting us.

  5. An individual can receive higher state provided aid than he or she can earn by working? If there ever as no brainer, that’s surely one. Is it possible that the low unemployment number is an indicator of those who are able but unwilling to work (welfare) are not counted as unemployed or because many potential job seekers have left the state because there are few if any high paying jobs available. If Vermont were more business friendly, it is reasonable to suggest that companies needing highly qualified employees would settle here and cause our youngest and brightest to either stay home or return home. Just a thought.

    • Not positive here but employed ppl are counted as employed if receiving benefits. Benefit receivers must have minor children and are on the Reach Up program which provides an incentive but it can’t be much and can include school or training programs.

      I think minimum wage in VT is like $10/hourly? So 20-30 hrs would be approx $200-$300? Would be difficult to believe anyone collecting that or more unless there’s lots of kids. SNAP and fuel are not that much either.

      Biggest problem is our Democrat-controlled one-party reign of terror…businesses cut hours to save…when slackjawed teens are making $15/hr to bag groceries everyone will be partimers.

  6. There are plenty of jobs out there but many net more money off from welfare than working at even 15 dollars an hour in this State. People drawing Vermont subsidies should only be allowed to receive the benefits for a year or less if they are able bodied to work.
    Everyone should to work for self pride alone.

  7. I don’t blame them for not looking for a job when the Government will pay you for doing
    “nothing” all you need to do is apply, some bleeding heart will sign off on you.

    Who in their right mind would wants to go out and work in the Cold & Snow, Sun & Heat
    or even in the Rain ?? Well, that would be someone with a little “Pride and Dignity”.

    If you’re an able-bodied male and say you can’t find a job that’s pure BS, I see signs every
    day, especially the Armed Forces, with pay, clothing, three square meals and a place to
    rest your head.

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