WIOA State Plan Common Elements

Vermont is a small state both based on land size and population. It is predominately rural with a high concentration of forest land. Geographically, the state is bifurcated by a mountain range which can make east to west travel challenging depending on the season. The largest population base was established along Vermont’s most prominent water way, Lake Champlain. This area in northwestern Vermont continues to have the highest levels of population density ultimately leading to the highest levels of economic activity in the state as well.

Overall, the Vermont economy is more balanced and diversified than the layperson may realize. Though known for farms and ski resorts, the business composition of Vermont shows a more diversified picture. Based on 2018 data and relative to the United States economy, Vermont has a higher concentration of industry employment in private education (NAICS 61), health care and social assistance (NAICS 62) and (NAICS 31-33). These three industries, plus the often-cited ones of agriculture and leisure and hospitality, offer a wide variety of employment opportunities across the state.

In addition to these private sector activities, government employment is also well represented in the Vermont economy. The combination of an international border (federal government) and dedicated support to public education (local government) add to the stability of the Vermont economy. This overall diversity of industry employment acts as a buffer against the typically wider swings of the United States economy. This is evident during the last economic downtown. During the depths of the last recession, the U.S. economy lost approximately 6 out of every 100 jobs. In Vermont, approximately 4 out of every 100 jobs were lost. This relative moderation is not just on the downside but also the upside as well. During the economic recovery, the U.S. economy’s rate of employment growth exceeds Vermont’s.

While the Vermont economy is not overly reliant on any one industry, there are sub-state areas where high concentrations of industry employment can be found. In 2018, using Career Technical Education (CTE) Center catchment areas, a report highlighting large industries by employment and relative concentration in these sub-state areas was created. Similar to statewide tools, this report was meant to steer discussions of support towards certain well-represented industries as well as identify opportunities by highlighting under-represented industries. From this work, several themes emerged.

Industries in Demand: Growing Industries

Health care and social assistance is a significant employer in many parts of the state. It is projected to grow which will create job openings requiring specialized skills. In addition to growth, many job opportunities will be created by current employees exiting their profession due to retirement or job churn. As such, health care and social assistance, including early care and learning and care for the elderly, are projected to require a large inflow of employees.

Another sector projected to have significant growth is professional and business services, including information technology (IT) and cybersecurity occupations. Though not heavily concentrated in the Vermont, this industry is the future of the American economy. It represents the newest level of specialization and allows individual firms to focus on their core capacities and partner with other firms to handle ancillary business functions. This is a competitive sector and requires talented individuals but once created, firms in this sector can generate significant economic activity by servicing customers around the globe.

Industries in Demand: Projected High Levels of Openings Due to Replacements

As discussed above, health care and social assistance is expected to be hiring due to growth as well as backfilling positions. As a job seeker, knowing where job openings are can be more important than understanding where job growth is. This section highlights industries which are expected to have above average demand for labor not due to growth but due to replacements.

Surprising to many, manufacturing is more highly concentrated in the Vermont economy than the U.S. economy. A traditional generator of wealth for individuals of all skill levels, is not what it used to be. Though still a productive and profitable sector, it no longer requires the employment base once needed. Through new technology, manufacturers are able to produce more products with less labor. The downward decline of employment in over the last 50+ years has led to the incorrect perception that there are not employment opportunities to be had within this industry. This is untrue. Currently in Vermont, employers of all sizes are reporting openings. These jobs require more technical skills than in past decades as the technology has changed. The majority of opportunities do not require four-year degrees. Many entry level positions require a high school education and some post-secondary training. Though the industry is not growing, there are projected to be many job openings in due to the current workforce retiring. 

Similar to manufacturing, construction is not projected to be growing but will be hiring. Again, due to retirements and job churn from the existing workforce, construction will be looking to fill many positions in the next ten years.  Training for these positions, which can include “green” occupations like solar installers and weatherization specialists, can be completed through Career Technical Education Centers or through an apprenticeship. In both options, participants are acquiring the necessary skills at little to no cost to themselves and preparing themselves for solid middle-income careers. construction is an integral part of any economy as it provides valuable services in the creation, remodeling or repairing of houses, buildings and infrastructure.

Regional Distribution

While not specific to any one region, these industry trends are important to the broader state conversation. Local knowledge is key to any discussion about a sub-state area. As eluded to at the beginning, the northwestern area of the state – whether defined as Chittenden County or more broadly as the Burlington-South Burlington Labor Market Area – is considered the ‘economic hub’ of Vermont. The county accounts for over 25% of the state’s population and approximately one-third of all employment opportunities. The LMA (which is comprised of Chittenden County and much of Franklin County) includes one-third of the population and 40% of the state’s employment. Consistent with economic history, economic development follows the placement of natural resources and transportation corridors. As the modern economy has moved away from the reliance on natural resources for employment, the transportation corridors between housing stock and businesses has become more important. This in part explains the overspill of economic activity out of Chittenden County to the north and the southeast via Interstate 89.

Over the last ten years, the ‘89 corridor’ has been a consistent producer of economic activity in part due to or as the result of population recruitment and retention. The three-county area comprised of Chittenden, Franklin, and Lamoille have shown the largest population increases across the state. Washington County is the next county down the corridor and though it has not experienced similar population gains, it does host the state’s capital and as such has produced similar economic gains as measured by employment. In total, these four counties account for 83.7% of the statewide employment gains realized between 2009 (trough of the recession) and 2018. This means over 15,000 of the nearly 18,000 jobs that have been added to the Vermont economy during the economic recovery/expansion occurred in this four-county region.

Conversely, seven counties (Bennington, Caledonia, Essex, Orange, Rutland, Windham, and Windsor) are yet to fully recover from the last economic downturn. Geographically, these counties represent the southern and the eastern part of the state. In the past 11 years (2007 to 2018), these areas are showing fewer jobs and fewer people - a vicious, self-reinforcing economic cycle. In total, 10 out of 14 counties in Vermont have shown population declines (includes the aforementioned seven counties plus Grand Isle, Orleans, and Washington Counties). As a small state, resources – particularly labor – can be scarce. The state has actively been promoting education and career awareness to all students and job seekers. These individuals represent the future of the Vermont workforce.

Employment Demand

In 2019, the Vermont economy faced tight labor market conditions with labor demand exceeding available labor supply. Nearly all occupations in the state are “in-demand” by some measure. The tension was created by contributing factors on each side of the equation. An ongoing national economic expansion drew down unemployment counts to historical lows as businesses hired job seekers. The continued health of the U.S. market has put upward pressure on labor demand. On the flip side, the demographic pressures created by the initial wave of retirements coming from the Baby Boomer generation is decreasing labor supply. Employers across the state, in all industries and of all sizes, are reporting job openings.

To better understand the available employment opportunities in the state, the Vermont Department of Labor contacted employers to ask about posted jobs and which skills were most difficult to recruit for. After thousands of calls, the compiled research showed that the three greatest skills in demand by employers were: show up on time, follow instructions, and work well with others. These soft skills may not yield high wages in all circumstances, but they are key elements of all jobs. As represented in the “Employers’ Hierarchy of Needs” illustration, these three soft skills are in greatest demand (quantity). Employers need these the most to handle all aspects of their day to day operations. While specialized and technical skills (elements of quality of labor) are important and lead to higher wages, they are not required for all positions. By better understanding employer needs (labor demand), it was easier to understand the opportunities at the margin to improve individual outcomes (labor supply).

This understanding lead to the creation of the “cello diagram” which overlays labor supply and labor demand. The name “cello” comes from the perceived shape of labor supply. It details the employment outcomes of individuals across the economy. Through qualitative research and discussions with partner organization, it was determined that there was a large segment of the population with low skills who could benefit from upskill training thereby gaining them access to the middle skill job market. Apprenticeships, Career Technical Education, post-secondary programs with short-course formats are going underutilized though they are the pathway to economic independence.

It was also identified that there was a noticeable percentage of the population with less skills than would be necessary to be successful in any job. While these individuals may have one or more barriers to employment, the upshot is: in a workplace setting these individuals have difficulty consistently demonstrating the three key employment elements identified by employers --- show up on time, follow instructions, and/or work well with others.

Lastly, from a pure employment perspective, there was also a recognition that certain individuals had more education than was demanded by the labor market. Though education for education sakes is important, if the end goal of school is work then additional information needs to be consulted. This is how labor market information can be so valuable in the hands of those making education or career decisions. By not incurring unnecessary student costs and by targeting training which yields specific employment outcomes, students and job seekers reach the economic self-sufficiency quicker and more affordably.

Occupations in Demand

Now in its third iteration, the Vermont Department of Labor has maintained a partnership with the McClure Foundation to produce physical and online resources to assist students and job seekers in Vermont. The Pathways to Promising Careers brochure is distributed to schools, Vermont’s American Job Centers (including regional Career Resource Centers), public libraries and other partner organizations that provide direct service. The brochure highlights a myriad of employment opportunities in the state as well as the educational attainment level necessary for each. Online resources allow someone to research the Vermont based education and training providers that offer the necessary course work to meet these educational attainment levels. The brochure highlights 62 occupations based on a wage threshold and ample number of projected openings.

For a comprehensive assessment of employment opportunities in demand, an online publication summarizing the statewide ten-year occupational projections is more helpful. By grouping occupations by education attainment levels and sorting them by both growth rates and projected openings, a job seeker can quickly understand low-barrier points of entry into the labor market as well as assist in informing long-term career goals. One take-aways from the long-term statewide projections is that there are many jobs which do not require four-year degrees. In fact, most employment opportunities require less. These jobs tend to pay less than jobs which require higher education. Examples of where this is not the case include Social Workers and Substance Abuse Counselors. In both cases, these occupations typically require an advanced degree, but the pay is less than other occupations requiring less training.

Another long-term trend in the Vermont economy is the large growth rates projected to STEM occupations. Though not a large part of the current economy, technical and scientific occupations are growing faster and will become increasingly important. These occupations require specialized skills and typically earn high wages. The advancement of the Vermont economy is going to depend on the ability of the Vermont labor force to create or leverage technology towards economic gains. The jobs requiring less education are in direct competition with technology. Increased computing power, predictive and scanning software, and user interfaces are just some of the ways employers are looking to technology to improve business performance. These “advancements” can come at the expense of certain occupations. Through training and education, individuals can acquire modern skills to best prepare for tomorrow’s economy.