Vermont labor report reveals rising unemployment rate


BENNINGTON -- The Vermont Department of Labor report for the month of July revealed a continued shrinking labor force and rising unemployment rate, both statewide and in Bennington County.

The statewide unemployment rate rose to 3.7 percent in July, a sharp increase from March, April and May.

The Vermont Republicans released a statement on Thursday, calling the labor department's release bad economic news for small business. The party blamed a shrinking labor pool on the Gov. Peter Shumlin administration and a Democratic-led state assembly.

The state party affiliate used the news to advocate for a new direction and proposed that if Republicans gained control of the state, they would unveil an economic development plan.

Since a spike in unemployment at the beginning of the nationwide recession in 2008, the unemployment rate has been lower mid year every consecutive year. In 2012, the rate declined from 6.7 percent in January to 5.9 percent in July in Bennington County alone. In 2013, the county rate declined from 6.1 percent to 5.0 percent along the same timeline. This year, the 4.5-percent January county unemployment rate rose to 4.8 percent by July. Although 2014 has thus far shown a different pattern, it is hardly necessarily indicative of an administration that has been active since 2011.

There are multiple factors that contribute to changing labor force participation and unemployment rate, which make it difficult to pinpoint any particular cause. After a gradual decline in the unemployment rate after 2008, the past couple years have actually been somewhat stagnant.

The unemployment rate is calculated by dividing the number of unemployed individuals by the number of people in the labor force. The numbers are determined by the state's unemployment insurance data.

Bennington County's labor force was estimated at an average of 20,700 people in 2008. The labor department estimated the county's July 2014 labor force at 19,500.

Because the labor force has declined, the number of available jobs for those in the labor force is greater, meaning that generally more people in the labor force are employed. However, the number of employed individuals can hit a ceiling.

"The piece that we run into is that unemployment and job availability don't always play hand in hand," said Michael Harrington, Bennington's community development director. "So, sometimes it's hard for us to compare whether an increase in unemployment means there are less jobs."

It is likely that 2014 has witnessed a different trend because the unemployment rate and labor force are beginning to level out. Both the Town of Bennington and the department of labor attribute the declining labor force to an aging population and stagnant population growth.

Those who postponed retirement during the recession are now leaving their jobs. Also, Vermont is beginning to attract different kinds of businesses than industry and manufacturing.

"While there are (less), at least in the manufacturing sector, our manufacturing jobs are just becoming more skilled, and require more education at a higher skill level," Harrington said. "The hard part for companies is making sure that when they are looking to fill spaces that there are those kinds of people available and looking for work, but also come with the skills that they need."

Harrington said the whole state's labor landscape is being altered. The recession caused many companies to consider ways they could lower cost and make manufacturing more efficient, which is why companies such as Plasan Carbon Composites and TE Connectivity made the decision to leave Bennington to make their operations more streamlined closer to headquarters or major trade areas.

The town's small business loan program is lending to smaller two- to three-employee operations. There are many business start ups. There just aren't many large manufacturers knocking on the door of the town office to move to the area, because it doesn't have the demographics or infrastructure needed for those kinds of jobs.

Harrington said the appeal for new start ups in Bennington isn't in industry, but that the appeal is in a place that food service, health and fitness and new product-based start ups would be more likely to succeed.

"There are certainly benefits to the small business market. My feeling is that there always must be some strategic advantage to doing business in whatever location We need to focus on marketing Vermont as a real ‘home-grown state:' A place where people can grow business connections, whereas it might be tougher to do that in a larger city," he said.

Although a statewide economic development plan and incentive packages wouldn't hurt, the unemployment rate isn't a strong indication that it would help. If it isn't suitable for industry to move into Vermont, then they won't, according to Harrington.

Because the unemployment rate is also not a good indication for the number of available jobs, Harrington said it is important that the town, county and state market the Vermont brand to bring jobs in that are suitable for its demographics.

Contact Tom Momberg at Follow him on Twitter @TomMomberg


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