Editorial: The local labor market isn’t working

A help wanted sign is posted outside Cyr Lumber in Windham, N.H., Thursday, May 7, 2020. Roughly 33.5 million people have now filed for jobless aid in the seven weeks since the coronavirus began forcing millions of companies to close their doors and slash their workforces. (AP Photo/Charles Krupa)

A help wanted sign is posted outside Cyr Lumber in Windham, N.H., Thursday, May 7, 2020. Roughly 33.5 million people have now filed for jobless aid in the seven weeks since the coronavirus began forcing millions of companies to close their doors and slash their workforces. (AP Photo/Charles Krupa) Charles Krupa—AP

Published: 11-26-2023 4:45 PM

Vermont could be the face of a looming long-term national labor shortage, The New York Times reports.

That is no doubt a distinction that the Brave Little State of Vermont Public media lore would cheerfully forgo. But at least it is one that it shares with its neighbor across the Connecticut River. Despite their political, social and cultural divides, Vermont and New Hampshire are both suffering from a critical shortage of workers to fill available jobs, as multiple stories in the Valley News have documented. This is perhaps nowhere more apparent than in the Upper Valley, where the state boundaries are sufficiently blurred so as to create what amounts to a single labor market.

Vermont’s unemployment rate in September was 1.9%, among the nation’s lowest. And according to the U.S. Chamber of Commerce, New Hampshire is one of the hardest states in the nation in which to find workers; only 41 are available for every 100 open jobs.

It’s all about the demographics. Both states have large aging populations; as the Baby Boom generation finally retires, there are not enough younger people to take up the slack. “The young population is diminishing, and the older population is growing,” Kenneth Johnson, senior demographer at the University of New Hampshire, told the Granite State News Collaborative. “There just aren’t enough Vermonters to meet the needs of our state and our employers in the future,” observed Michael Harrington, Vermont’s labor commissioner.

A bit of context is needed here. Despite what much of the public seems to think, the national economy is thriving and inflation is slowing, creating robust demand for goods and services. It stands to reason that demand for workers would also be great. When the economy cools, the situation may not appear as dire to employers. And there is an upside. Many workers are making real gains in wages, benefits and working arrangements.

Nevertheless, several economists who spoke with the Times expect the nation as a whole to experience a long-term labor shortage, of which Vermont may be a harbinger.

At one point during the height of the pandemic, it appeared that an influx of out-of-staters might help bail out Vermont. New data from the U.S. Census Bureau suggests, however, that the boom was not long-lasting. While the state experienced a net gain of 14,500 people in 2021, the net migration gain for the following year was just under 3,000. While the net population gain for the whole period of 17,500 was more than the previous decade combined, it’s only a small part of the equation.

There’s no quick fix, but both states can help mitigate a chronic labor shortage by adopting smart public policies. The acute housing shortage has to be vigorously addressed. People whom companies want to hire have to be able to find affordable apartments or houses within a reasonable distance of their jobs. Our colleague Patrick Adrian rounded up the status of local housing projects in last Sunday’s edition. While some face obstacles posed by high interest rates, costly materials and the labor shortage, it does appear that enough units are in the pipeline to begin to make a dent. Many more are needed.

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Other ways in which government on all levels can help is to make child care far more affordable and accessible. Parents who want to return to the labor force but cannot because of their child-care responsibilities constitute an existing resource that shouldn’t be squandered.

Young people who grow up in the Twin States only to move away following high school or college graduation present a different challenge. Out-migration of young people is not a recent phenomenon and in some ways it is a healthy one: There is value in testing the wider world after growing up in a relatively isolated corner of it. But for those who want to stay or come home, easing the burden of high student debt is a must. That in turn presupposes greater public investment in higher education and programs of loan forgiveness for people willing to take jobs in critically needed sectors.

And finally, the Twin States and the nation as a whole need foreign-born immigrants, and lots of them, across the board. That, of course, requires federal action, but employers in the Twin States should let Congress know that rabid anti-immigrant animus is an economy killer. In the words of Ron Hetrick, senior economist at a labor market data firm, “We need to start looking at immigrants as a strategic resource, incredibly valuable parts of the economy.” This only states the obvious, but these are times in which the obvious bears repeating.