A couple of pieces of data we found last week point to Vermont's approach to economic growth as the best strategy for economic survival.
According to a monthly analysis of economic conditions across the nation by the Associated Press, Vermont placed as the fourth least economically stressed state in the country. Only North Dakota, South Dakota, and Nebraska ranked higher.
The five most economically stressed states? Nevada, Michigan, California, Florida and Arizona. According to the AP, more than 20 percent of Nevadans were either unemployed, owned a home that was in some stage of foreclosure, or had filed for bankruptcy.
The AP based its rankings on unemployment, foreclosure, and bankruptcy rates. In all three areas, Vermont does much better than the country at large. Vermont's unemployment rate as of July is 6.0 percent, significantly lower than the national rate of 9.6 percent. Windham County's unemployment rate comes in slightly under the state average at 5.8 percent.
The collapse of the housing-value bubble that led to the current recession is a primary reason why Nevada, California, Florida, and Arizona are in such dire economic straits. By comparison, Vermont ranks low in terms of mortgage delinquencies (46th) and foreclosure starts (48th), according to the Mortgage Bankers Association's rankings as of the end of August.
That too, reflects the Vermont way of doing business. Lenders in the state acted far more prudently than their counterparts in the boom states, and the so-called subprime mortgages were virtually nonexistent.
Besides resisting the seduction of the housing-bubble hype, Vermont has one very big thing going for it - an economy that's focused on tangible things.
Vermont has a fair balance between the knowledge economy, the manufacturing economy, the service economy, and the agricultural economy. Vermonters have an appreciation for what is real and a healthy distrust for what isn't.
True, we're not as wealthy as the rest of the nation, but we enjoy strong communities and a quality of life that many parts of our nation wish they had. We have labor, land, and capital, as well as the creativity and ingenuity to use these resources sustainably.
Not that everything is rosy here. A report released last week by Vermont Sen. Bernie Sanders shows that low-wage jobs will provide the biggest share of Vermont employment growth through 2018.
Sanders cited the decline in manufacturing jobs and other occupations that once supported middle-class families as a primary reason why 44 percent of the jobs projected for the next eight years are classified as “low-paying.”
As defined by the Vermont Department of Labor, that's any position that earns less than $15.73 an hour, or $32,720 per year. The greatest projected job demand will be for cashiers and home-health aides, both occupations that pay roughly $10 an hour.
This trend is not unique to Vermont.
“The structure of job opportunities in the United States has sharply polarized over the past two decades, with expanding job opportunities in both high-skill, high-wage occupations and low-skill, low-wage occupations, coupled with contracting opportunities in middle-wage, middle-skill white-collar and blue-collar jobs,” wrote MIT economist David Autor in his recent report, The Polarization of Job Opportunities in the U.S. Labor Market.
Despite the economic turmoil that rages beyond the state's borders, Vermonters should retain confidence in the future because the people of this state are strong, resilient, and resourceful.
But Vermonters also need jobs that pay a living wage. Our old-fashioned values, coupled with new-fashioned creativity and innovation, can help this state build an economy that others will seek to emulate.