Archive for the ‘Business & Economy’ Category

Vermont’s Fine Whine

Friday, October 15th, 2010

Peter Shumlin wants to “put Vermont back to work,” because “thousands of Vermonters are struggling to find good paying jobs,” and “Vermont is facing the highest unemployment rate in 30 years.”

So they are and so it is. But Vermont is not alone. In the other 49 states, millions are struggling to find jobs and the unemployment rate is higher than it’s been in 30 years.

In fact, the unemployment rate is lower in Vermont than it is nationally or in most other states. In August, according to the Bureau of Labor Statistics, only four states had lower unemployment rate’s than Vermont’s 6.0 percent, which was more than a third less than the national rate.

Brian Dubie agrees that job creation is vital, and he says jobs are scarce because “it’s harder to start a small business here, harder to earn a good living here, harder for a small business to hire and grow…than in almost any other state in America.”

Dubie has some evidence to support his assertion, a 2009 survey by Forbes Magazine finding that Vermont had one of the least “business-friendly environments” in the country. As evidence goes, though, this survey was decidedly unimpressive, and there are no actual data supporting the claim that small businesses are less likely to succeed in Vermont than elsewhere. Until the Recession began, business start-ups outnumbered business failures in the state, and the success rate was comparable to the rate in other states.

Different though their outlooks may be, Dubie and Shumlin are both acting in accordance with what seems to be Vermont’s real – if unofficial – motto: “Woe is Us.”

Speaking of no data, there are none to prove that Vermonters tend to complain any more than Tennesseans, Kansans, or Oregonians. In recent years, whining has emerged as the national pastime as various regions, generations, and subcultures claim to be more put-upon than everyone else.

To be fair, there is plenty to…well, whining never did any good, but there is plenty to complain about and rail against these days. In many ways, the country is in bad shape. The current Recession is the worst since the Great Depression (unemployment went slightly higher in 1982, but it was a far more manageable downturn). In real money terms, many people earn no more than they did a decade or so ago even as the cost of necessities such as health care and education keep rising. Life in America is not easy these days.

But all these are national (and some cases global) troubles. There is nothing particularly Vermont-ish about them. In fact, for the most part, Vermont is getting through these troubled times better than most states. Depending on who is doing the counting and when, the home foreclosure rate in Vermont is either the lowest or the second lowest in the country. As mentioned, the jobless rate, while higher than before the Recession, is relatively low, as is the poverty rate, and even the much-discussed pending state government budget deficit pales in comparison with many other states.

One reason to suspect that Vermont is whinier than most other states is that Vermonters were kvetching well before the Recession. To some extent, this is one consequence of being a generally liberal state. Complaining – sometimes with good cause, sometimes not – is built into a liberal’s DNA.

But if anything, it has been the state’s conservatives who have voiced the loudest gripes. Led by Gov. Jim Douglas, Republicans and their allies have kept up a steady chorus caterwauling that Vermont’s tax structure and environmental regulations are stifling economic growth.

It’s not impossible that there is some basis to this critique. But it faces one problem at the outset: there really isn’t much evidence that Vermont’s economic growth has been stifled at all.

For the last half century, this state has gotten steadily bigger and richer. In 1960, the Census counted 389,881 Vermonters. That rose to about 445,000 in 1970, some 511,000 ten years later, almost 563,000 in 1990, almost 609,000 ten years ago, and an estimated 638,000 this year. Experts project the population to reach 678,000 by 2025.

As it has grown larger, Vermont has grown richer. One of the poorest states in the middle of the last century, it now has the 21st highest median household income. According to official federal figures from 2007 to 2008 (the latest figures available) Vermont’s Gross Domestic Product grew by 1.7, more than twice the nationwide rate of 0.7 percent.

Vermont does have economic problems, but the evidence suggests that these problems stem less from what Vermonters do (government policies) than with where they do it (on farms and in small towns) and who they are (white, Anglo, educated, relatively affluent).

Vermont is one of the most rural states in the country, with only one official metropolitan area (Burlington and environs). In today’s economy, the advantages go to concentration and consolidation. With rare exceptions, economic opportunity is found in the big cities and metro areas. That’s home to the big economic drivers – the big universities, the health care and research centers, high finance, the arts. That explains why Chittenden County is the most affluent part of the state. It has at least some of all of the above. Considering that the rest of the state has very little, its prosperity is impressive. Somebody is doing something right.

One thing Vermonters are not doing much is having children, so one real concern is that the average age of the state’s residents will progressively rise. But there’s not much that can be done about that. Educated, white, Anglos aren’t having children anywhere in America, all of which is getting older. Nationwide, the share of the population over age 65 is projected to rise from 12.9 percent this year to 17.8 percent in 2025.

Vermont does have challenges. Like the rest of the country – but more than most states in the Northeast – income inequality is growing. The immigrants tend to be affluent retirees or educated folks who come to work at Fletcher-Allen, IBM, or the University of Vermont. The emigrants tend to be the less educated who can not find the jobs in factories, farms, or forests that supported their parents and grandparents.

That’s a real problem. But – again – hardly unique to Vermont. It is a problem that stems from great progress. Oversimplifying just a bit, the prosperous half of the world has solved the production-of-goods problem. People can produce more machinery, food, and fiber with a fraction of the workers needed a few decades ago. Among the functions that need fewer workers are forestry and dairy farming. Milk, wood pulp, and saw logs will continue to be produced here, but by many fewer people. To live decent lives, the rest will either have to get the kind of education needed in the new economy, or go somewhere else (though pretty soon, going somewhere else won’t do much good, either).

For the most part, then, Vermont’s problems are the country’s (and even the world’s). Sure, there are a few things this state could do better, or different. It’s even possible – though hardly proven – that cutting taxes and easing the regulatory process might be among them. Meanwhile, it could be a good idea for both Democrats and Republicans to see if they can avoid grating Vermont the distinction of being the whiniest state in the union.

More About the Money

Monday, July 19th, 2010

The top money man

More politics below, but first an update on a post of three months ago (Non-Union Blues, April 28) about the Douglas Administration’s refusal to accept a Project Labor Agreement (PLA) for construction of the new Lake Champlain bridge.

Under a PLA, construction unions agree not to strike and to accept cost saving concessions such as surrendering premium pay for late shift work. In return, the contractor agrees to accept workers chosen at union hiring halls in the region, guaranteeing local residents some of the good-paying jobs on the project.

Last spring, New York State and the Federal Government agreed to a PLA for the bridge. Under pressure from the state branch of the Associated General Contractors, Vermont did not, so there was no public PLA.

The top money Dem

But according to a news release sent out Friday by the Vermont Building and Construction Trades Council, Vermont and New York unions have reached agreement on a private PLA with the prime contractor, Flatiron Construction of Colorado.

“The PLA will accomplish what Gov. Douglas was sadly unwilling to do – guarantee local residents an opportunity to land a job on this $70 million project,” Vermont Building and Construction Trades Council President Jeff Potvin said in the press release.

It isn’t clear how many workers from the area will get jobs on the bridge project. Potvin acknowledged that Flatiron will “self-perform a large portion of the project,” meaning it will bring its own workers from elsewhere. But it does seem that the more Vermont workers will get bridge jobs with the PLA than would have without it, and that the cost savings will go to Flatiron, not Vermont’s taxpayers.

It will be interesting to see if whoever ends up with the Democratic nomination for governor tries to use this issue in the general election campaign against Lt. Gov. Brian Dubie.

Oh, yes: the governor’s race. Wherein we segue to the significance of the campaign finance reports submitted by the candidates last week.

This significance should not be overstated. The typical voter does not pay attention to which candidate raises more money, being far more interested in which candidate he or she finds appealing.

But neither should the significance be pooh-poohed. First of all, the money itself is important; more is better than less. Second, the reports themselves send signals, however short-lived, that can speed or slow a candidate’s progress. The more money a candidate has, the more seriously he or she is taken by what the eminent journalist Jack Germond called “the political community”—reporters, TV commentators, and, not least, potential contributors, who prefer to bestow their largesse on likely winners.

There is little doubt, then, that last Friday’s headlines provided a boost to Dubie ($943,000 raised, $475,623 cash on hand) and Secretary of State Deb Markowitz, the top collector among Democrats ($523,946 raised, $186,756 on hand).

Also coming out ahead in the perception game were Democrats Matt Dunne ($267,861 and $132,959) and Sen. Peter Shumlin ($418,490 and $207,134.).

The news was not as good for Sen, Doug Racine ($210,158 and $63,097) and it was downright awful for Sen. Susan Bartlett, who reported raising only $70,920 from just 232 contributors, leaving her with only $11,146 in the bank.

As last Wednesday’s post noted, a candidate need not have the most money. She does have to have enough money.

Eleven grand is not enough money.

Bartlett insisted she would not drop out, and there’s no reason why she should. She has nowhere else to go for the next month, and there’s always the possibility of a “miracle,” which in this case would require no supernatural intervention, just a fairly even five-way split in which nobody gets much more than 20 percent of the primary vote on August 24 and anyone could win a squeaker.

But it would take something close to supernatural intervention. That isn’t the way multi-candidate primaries usually shake out.

The situation must be frustrating for Bartlett, who is highly regarded in Montpelier. Even as they pronounce her candidacy hopeless, politicians and legislative onlookers keep noting  that she might be a strong candidate in the general election, and a good governor if elected.

But nobody every claimed that politics was fair, or even rational.

A look behind the raw numbers indicates even better news for Dunne, and perhaps even worse news for Racine, who has only raised $107,742 from 491 contributors in the last year. His total includes the amount he raised before last July’s reporting deadlines. Dunne, who did not announce his candidacy until late last year, raised all his money in the last twelve months from 722 contributors.

That’s not as many as Dubie (an impressive 2,724 contributors in the last 12 months), or  Markowitz (1,070), but substantially better than Shumlin (390) who only kept pace with Dunne by lending his own campaign $150,000.  At the very least, Dunne seems to know how to raise money.

As, obviously, do Dubie and Markowitz. They have also spent the most money. Shumlin actually has a bit more cash on hand now than Markowitz, even after paying for the campaign’s first round of television ads. And while Dubie has far more money in the bank than anyone else, he is also spending it faster than anyone else, much of it on professional fund-raising and other political consulting firms.

All the candidates raised most of their money from, and spent most of it in, Vermont. That may not last. It is not unreasonable to suspect that the big out-of-state fundraising starts now, not reportable until after the election. Some voters, it seems think there is something wrong with raising money beyond Vermont’s borders.

But candidates need money, and have to raise it where they can find it. Asked why he robbed banks, Willie Sutton famously said, “that’s where the money is.” Campaign money is in Boston, New York, Washington, California, and Texas. Dubie has already raised thousands from Texas, and spent thousands there, on Harris Media an Austin political consulting firm serving conservative Republican candidates.

No doubt researchers from all six campaigns are poring over the filings of the other five, hoping to find either a contribution or an expenditure that could prove politically awkward. Two potential entries: Dubie got a $2,000 contribution from the Ely Lilly Co., the Indianapolis pharmaceutical giant. Drug companies are not universally admired these days.

The lieutenant governor also received $1,000 from Dairy Farmers of America of Kansas City, MO, and another $1,000 from its affiliate, Syracuse-based Dairylea Cooperative, Inc. DFA is the milk marketing cooperative that has been the target of several anti-trust allegations, (and at least one continuing investigation) and some Vermont dairy farmers blame it for keeping their prices low.

Random Notes For a Monday

Monday, June 14th, 2010

First, an announcement, and a plea: Four of the five Democratic candidates for governor (Deb Markowitz being the absentee) will meet for a so-called debate, more accurately a campaign forum, at 7PM Thursday at Sterling College in Craftsbury Common.

All are invited.

The host will be Sterling President Will Wootten.

The moderator will be…well, ahem, uh, as long as you asked, the moderator will be the News Guy his very own self.

Please do not throw tomatoes as the moderator. He will be doing the best he can. But he could use some help. What would you ask the candidates for governor if you had the opportunity?

Some of the issues that should be brought up may seem obvious – taxes, schools, jobs, Vermont Yankee. Except that they all seem to agree on taxes, schools, and Vermont Yankee. And it isn’t clear that governor can do much about jobs.

Remember eight years ago when candidate Jim Douglas’s slogan was “Jim =Jobs.” Sounded good, but even before the Recession, private sector job growth under Douglas was pretty close to zero.

Not necessarily his fault. Campaign rhetoric to the contrary notwithstanding, state government policy may be irrelevant to job growth.

Or maybe not. Anyway, if anyone has probing, specific, substantive questions he or she thinks someone should ask one of these folks, here’s your chance to suggest them to someone who is going to do the asking. And who will appreciate the submission whether or not he uses it.

(star break)

MEDIA NOTE—Not censure, this time, but praise. In the continuing discussion about the role of hydro power in the state, Vermont Public Radio did what news organizations are supposed to do – spent some money, sent reporters to cover the news.

VPR reporter John Dillon went 600 miles north of the border who where Hydro-Quebec, from which Vermont utilities just agreed to buy a whole mess of power, has built a huge dam which will divert 70 percent of the waters of the Rupert River to help generate that power.

As Dillon pointed out, the Rupert is just one of three rivers which will be part of a system of four dams, 74 dikes and a new tunnel carved through a mountain, all powering four new generating stations still farther north.

At the same time, VPR’s noon Vermont Edition went to Montreal where host Jane Lindholm presided over a spirited and informed debate between Claude Demers, Hydro-Quebec’s science communicator, and  Daniel Breton, founder of  a Quebec environmental organization.

One angle VPR didn’t deal with, and neither has anybody else. Hydro-Quebec gets criticized from folks on the left side of the political spectrum for those immense dams which have flooded thousands of acres of land, with damaging consequences for both the natural world and the Cree Indians who live in northern Quebec.

Another big corporation abusing the land and indigenous folks in the thirst for profit for the stockholders, no?

No. Hydro-Quebec doesn’t have stockholders. It’s owned by the Province and the people thereof. It is, in short, a socialist institution.

(star break)

More (mostly) good news: Some additional ammunition for the argument made in the post titled Not So Bad (June 4) that life in Vermont is…not so bad.

Maybe even pretty good.

The latest issue of  Kiplinger’s Personal Finance magazine named Burlington one of the “ten best cities for the next decade.” Praised  for its “creativity and entrepreneurship” Burlington was tagged the eighth best city for both living and working over the next several years. Austin, Texas, was first.

In addition, recently released  (or, perhaps more accurately, hitherto ignored) Census figures confirm that Vermont is one of the most affluent states, with a relatively low poverty rate, and one of the lowest rates of child poverty in the country. The statistics are from 2008, the most recent available.

Only eight other states have child (under age 18) poverty rates in the same low category as Vermont: New Hampshire, Massachusetts, Connecticut, New Jersey, Maryland, Utah, and Wyoming.

For the total poverty rate, Vermont was in the second best category, ranked with 13 other states with rates between 10.2 and 13.1 percent (Vermont’s was 10.4). Seven states, including New Hampshire, Massachusetts, New Jersey and Maryland, had lower rates.

As is true almost everywhere, Vermont’s under-18 poverty rate (12.8 percent) is slightly higher than its overall rate.  But not everywhere. Chittenden County’s total poverty rate was 9.6 percent, but the child poverty rate was 9.2 percent.

But that was unusual. In the other 13 counties, the under-18 rate was either slightly or not so slightly higher. Even Addison County, which had the lowest total poverty rate (9.5 percent had a slightly higher rate (10.6 percent, for those under 18.

Both the highest rates and the biggest differences between total and child poverty were in the Northeast Kingdom. Caledonia County had an 11.8 percent total poverty rate, with 17.1 percent of its under-18s in poverty. In Orleans County, the overall rate was 14.3 percent, with a 19.3 percent poverty ate for those under 18.

And in Essex County, the poorest in the state, 14.8 percent of all persons lived below the poverty line, but the under-18 rate was 23.8 percent.

That puts Essex at a level comparable with some of the rural counties of the Southeast and Southwest, the poorest areas of the country.

None of this is a big surprise. But it deserves more attention than it has been getting from either officials or observers. That latter, that’s us. More attention will be paid, starting with maybe a few questions to these candidates at Thursday’s debate.