by Robert Zulkoski Why do we wait until a pig is dead before we cure it? Vermont recently lost its longstanding triple A bond rating with Moody’s Investors Service as the influential credit rating agency factored in the state’s slower-than-average economic growth, aging population and high pension obligations as a reason. The financial cost of this downgrade may not (yet) be devastating, but the message to Vermonters should be. Crisis is not coming, it’s here. Wake up and deal with it. Stop Cussing the Mule and Load the Wagon!
On the farm, there are always dirty jobs that no one is eager to do. Simple errands, important duties, and critical and difficult special projects can stack up over time. Sometimes we lock horns with a chore or project that, without doubt, we absolutely, positively don’t want to tackle.
When we run up against these tasks, we have to stop cussing the mule and start loading the wagon. In other words, stop fussing and start working. The garden won’t wait for water, animals can’t wait for feed, crops won’t wait until you clear your schedule to harvest them, and slower-than-average economic growth, aging population and high pension obligations don’t solve themselves without acting and making hard-choices.
The United States economy is now in its longest expansion in modern history. Yet, Vermont’s economy is barely holding on, and, beyond perhaps panicking over our various rising tax bills, most Vermonters have been lulled by the State’s slow decline and don’t realize a crisis has been building around us.
Three months after completing a huge merger, Keurig Dr Pepper announced 118 Vermont job losses, most of them at its Waterbury location. Losing more manufacturing jobs is a continuing blow to the State, it has been noted that many Vermont employers are reporting that a shortage of such workers is holding back potential growth.
Don’t get fooled by statistics like the unemployment rate of 2.8% (which is lower than the national average of 3.7%). This low rate is not solely a result of jobs filling faster than they are created, but rather because we’re losing our population, especially younger workers, before living wage jobs can be created for them.
This unfortunate demographic-curve reality is also a main driver to the other two issues highlighted in the Moody’s downgrade – below average economic growth and soon-to-be crippling pension obligations (according to the State, in approximately three years we will have more pensioners than workers).
According to the Vermont Futures Project – an amazing data-driven initiative to help secure Vermont’s economic future – the most recently reported number of mid-sized firms in Vermont (20 to 499 employees) declined by 15% year-on-year, and the share of our total population of 25 to 44-year-olds has declined by more than 5% since the year 2000. And for me, the standout statistic is we need to add almost 11,000 new workers each year beyond what we are already adding JUST TO STAY EVEN.
This column is too short to go into macro and micro economic issues in depth, but over the next several months I will talk about big-picture issues pertaining to our growing talent gap, investment funding shortfall, the lack of productive/constructive connections to investors and mentors from outside the State, and how the more time we spend thinking of reasons why we can’t rally to the task of bending our demographic curve in a more promising direction, the greater pains we will have to endure to do it and the longer it will take to finish it.
Robert Zulkoski is one of the founders of Vermont Works Management Company (www.vermontworks.co), who’s objective is to deliver capital, mentorship, and connectivity to Vermont’s innovation ecosystem. Vermont Works’ goal is to ensure that Vermont is a full participant in the emerging, technology-enabled “new economy”. Vermont Works sees the dynamic changes sweeping the country and the globe as an achievable opportunity for Vermont to create large numbers of livable wage and sustainable jobs that help retain and attract talent and innovation, while staying true to the “Vermont Brand” and what it represents to the citizens of Vermont. Mr. Zulkoski is also a founding shareholder and Director of Impact Investment of The Conduit (www.theconduit.com), which connects thinkers, leaders, and innovators in social change, business, and the arts to create impact for the greater good.