Business Is Business
How’s business?
Terrible, of course. There’s a recession going on. Workers have been laid off, home prices are down, companies are cutting back. If anything, it’s worse in New England than in most other regions, at least as reported in the last version of the “Beige Book,” the Federal Reserve System’s round-up of what its regional banks are reporting.
But you know where business is…well, not good, but less bad than it is in most other places?
Vermont, that’s where.
A bloc of soft ricotta
Let’s not get too carried away with that employment report that showed Vermont one of only two states (Montana being the other) that gained jobs in May. That could have been a one-month anomaly, especially after the big layoff at the Ethan Allen plant in Beecher Falls last week.
But that was only one indication that Vermont is not suffering from the recession quite as much as most other states. Having avoided the worst excesses of the housing “bubble,” Vermont has not been hit as hard by the bursting thereof. Thanks in part to tighter regulations, the state’s foreclosure rate is just about the lowest in the country.
(Yes, that did say thanks to tighter regulations; sometimes they can be good for business).
In May, despite, the Recession, 38 businesses commenced operations in Vermont, while 20 closed ,according to a report from the Secretary of State’s office. In the first five months of the year, 174 businesses opened, and 133 closed. If that pace continues, slightly more businesses will open in 2009 than in 2008, and just about as many will close.
Then there are all these accounts of specific businesses starting up. As evidence goes, this is anecdotal, and therefore inconclusive. There are also businesses shutting down. Still, under the circumstances, the determination of some entrepreneurs to set up shop (and the willingness of banks to lend them the money to do so) indicates that, at least in Vermont, the “green shoots” or impending recovery may be more than wishful thinking.
Boloco, the regional burrito chain, has one location in downtown Burlington, and according to the Burlington Free Press, owner John Pepper is thinking of opening four more in the state.
This month, the new Fairfield Farms Artisan Cheese company will begin operations at the old , state-owned, Plymouth Cheese Factory, located at the President Coolidge State Historic Site in Plymouth, according to a press release from the Agency of Commerce and Community Development.
It’s an interesting mix of the old and the new. The factory was built by Calvin Coolidge’s father in 1890. The state bought it from Coolidge’s son, John, in 1996. The new owner of Fairfield Farms, Jesse Werner, a native Vermonter educated at Brandeis and in Prague, plans to operate his business as both a cheese retailer and a tourist center.
With, needless to say, interactive facilities. Visitors will be able to ask questions as they watch the cheese being made.
And check Business People Vermont on line., Last month, it reported the openings of Copierworks of Vermont in Colchester, home furnishing store Feathering the Nest in Bristol, a third location of Mendy’s clothing in Middlebury, the new law firm of Walsh and Monaghan in Burlington and St. Albans, Button Professional Land Surveyors in Richmond, a new coaching business called Your Year of Transformation in Shelburne, and several more new enterprises.
These are not big businesses. That new cheese factory will employ four people, and perhaps all the businesses started last month won’t employ as many workers as Ethan Allen just laid off. But there is something close to a consensus among economists that smaller firms with niche markets are the ones most likely to prosper now and in the future. And these new entrepreneurs seem to be more upbeat about doing business in Vermont than many in the state’s business establishment.
“When I look at Church Street, honestly, I see a well-kept secret that the rest of the world doesn’t know about. It’s a real destination,” Boloco’s John Pepper told the Free Press.
No griping about regulations or taxes. It isn’t that there may not be some merit to the gripes. But the younger businesspeople seem to have absorbed a lesson some of their elders may have forgotten: If you make more money, you end up with more money, even where the tax rate is somewhat higher, than you end up with if you earn less money. And because there are people in Vermont with money, you can make money here.
There was another important and encouraging piece of economic news last month, though it was not classified as economic news. Education Commissioner Armando Vilaseca noted that a survey in Education Week magazine by the Editorial Projects in Education Research Center, funded by the Bill and Melinda Gates Foundation, found that Vermont had one of the best high school graduation rates in the country.
The survey found that in 2006, 78.7 percent of the students who had started high school four years earlier graduated on time. The national average was 69.2 percent. Only New Jersey and four states in the Midwestern “Education Belt” – Iowa, Minnesota, Wisconsin, and North Dakota had higher percentages than Vermont. Nebraska was tied.
Jill Remick of the Vermont Education Department said the report used estimates so it could compare the rates by state even though the states use different methods to gauge their graduation rates. By Vermont’s accounting, she said, its four-year graduation rate is 85 percent, though its comparative standing is still about the same because some of those other states probably have higher figures, too. Either way, Vermont’s rate is among the highest.
But why is that economic news? Simply because education is the single most important economic development program ever created. There are many reasons why the United States became the richest country in the world in the last century. But none bigger than this one: Starting in 1910, the U.S. “led all other nations in the development of universal and publicly-funded secondary school education,” as Lawrence Katz and Claudia Goldin point out in Human Capital and Social Capital: The Rise of Secondary Schooling America, 1910-1940, a paper they prepared for the National Bureau of Economic Research.
Remick said education experts are convinced there is “definitely a very close link” between graduation rates and the quality of the work force. But expertise really isn’t necessary. Common sense reveals that students who graduate in four years are more likely than those who do not to come to class every day, on time, having done their homework; less likely to be sent to the principal’s office, held after school or suspended. They are, in short, more likely to be trained, trainable, and reliable.
That’s what employers want in a work force. This recession will end. If the state’s officials know how to exploit that advantage – or, more precisely, if they spend their energies exploiting it instead of whining – Vermont holds the potential to enter into a period of very substantial home-grown prosperity.
Tags: HIgh school graduation
