News analysis: A detailed look at the promise of new jobs
copyright the Chronicle 3-20-13
by Tena Starr
The Northeast Kingdom has long been Vermont’s Cinderella stepchild — pretty and poor. It’s the region with the consistently highest unemployment rates, lower than average wages, arguably best scenery, and a culture all its own that it’s fiercely clung to.
For decades, it’s cried out for development, and jobs. And it seems likely it’s about to finally get them.
As everyone knows by now, Bill Stenger, Jay Peak Resort’s CEO, plans to invest millions in the region, from Jay Peak to Burke Mountain, with Newport in between. And a Walmart is supposedly coming to the area.
Mr. Stenger has said his investments will create 10,000 jobs, of which between 1,500 and 2,000 will be in Orleans County. And the Walmart that some have so yearned for would supposedly provide about 300 more in Vermont.
But what effect will all that development really have on working people in the Northeast Kingdom?
Jobs are one certain way to measure economic success, and in theory the more jobs the better. At the moment, the Northeast Kingdom economy seems to be holding its own, although it has undergone much change in recent decades, primarily in a gradual shift away from agriculture and forestry.
According to the Vermont Labor Department, the Newport area’s unemployment rate was 8.2 percent in January, down from 9.5 percent in January of 2012. However, that drop in the jobless rate was largely due to a reduction in the size of the workforce rather than the number of people without jobs.
“The unemployment rate didn’t come down because more people were working; over 2,000 jobless workers simply left the labor force,” says a report issued by the Public Assets Institute on Monday. The report is talking about the state as a whole.
“People drop out of the labor force when they get discouraged,” said Paul Cillo, president and executive director of the Public Assets Institute, which looks at financial data and jobs in Vermont with an eye toward developing policy.
“What we’re seeing is slow, steady growth in the Vermont economy,” Mr. Cillo said. “But we haven’t seen that it’s doing much for Vermont workers.”
Mr. Cillo’s organization concerns itself not only with jobs, but also with wages — another economic measure. He said that while a tight job market theoretically drives up wages, in practice there has been no evidence of that for some years.
According to the state’s latest livable wage report, which was issued in January, a living wage in Vermont is $12.48 an hour. That figure, however, is considered to be half what it would take to run a childless household. In other words, the assumption is that $12.48 per hour is a livable wage if there is another person in the home also making at least that amount.
“The Vermont Livable Wage is defined in statute as the hourly wage required for a full-time worker to pay for one-half of the basic needs budget for a two-person household with no children and employer-assisted health insurance, averaged for both urban and rural areas,” says the report, which is prepared by the Vermont Legislative Joint Fiscal Office.
“The livable wage is different from the wage for a single person because it accounts for the economies achieved by multiple-person households,” the report says. “This figure does not, however, include all potential household expenses because it is for families without children.”
The livable wage for a rural single person is $15.74, according to the report. For a single parent with one child, it’s $23.41; for a single parent with two children, it’s $28.03. For a household of two adults with two children and one wage earner, it’s $30.12; and for a home with two adult workers and two children, it’s $18.72.
The urban livable wage differs by a few cents.
The most recent figures available from the U.S. Department of Labor, from the fourth quarter of 2011, show an average weekly wage in Orleans County of $668 ($16.70 an hour for a 40-hour week) and $809 ($20.23 an hour) for Vermont as a whole.
Mr. Cillo said the Public Assets Institute has been considering what other factors would be indicators of the economy, particularly in the Northeast Kingdom.
The Northeast Kingdom economy is slightly different from that of other parts of the state, he said. In general, Vermont has transitioned from farming to more of an income-based economy. That matters, he said, because when you’re on a farm big expenses like childcare tend to not be an issue, since the family is at home.
“It’s a different way of life, and I think the Northeast Kingdom tends to have more people still living that kind of lifestyle,” Mr. Cillo said. “As soon as people leave the farm they have child care costs, clothing — those things cost money. I think that makes it hard to use statistics to understand the economy of the Northeast Kingdom. We have all these numbers, but they don’t really tell the story.”
It’s encouraging that agriculture is experiencing something of a revival in the Northeast Kingdom with young entrepreneurial farmers finding ways to prosper, Mr. Cillo said.
Steve Patterson, executive director of the Northeastern Vermont Development Association (NVDA), is also encouraged, both by successful agricultural models, the revival of Hardwick around local food and agricultural ventures, and by Mr. Stenger’s development plans for Orleans and Caledonia counties. That development will occur rapidly but not all at once, he said.
The 10,000 jobs figure that’s been tossed around is perhaps misleading, Mr. Patterson said. That does not necessarily mean there will be 10,000 new, permanent jobs, he said. Some, such as construction, will be temporary, that being the nature of construction work. Others will be created indirectly. For instance, he said he gets at least one phone call a week from someone who would like to supply Jay Peak with something or other.
“The big issue is the indirect impact this will have,” Mr. Patterson said. “It’s sort of like Hardwick, success breeds success.”
“Newport is just exploding with opportunity,” he said. “The spinoff from Burke hopefully will generate more interest in the St. J area as well.”
Mr. Patterson said that he and members of the group that is trying to evaluate and meet labor force needs are working on salary schedules for the jobs that Mr. Stenger’s development will provide.
Penne Ciaraldi, who works for Community College of Vermont and is a member of the workforce group, said that, generally, wages for those employed by the developments look to be decent, although a full profile hasn’t been worked up.
“Construction will be a big one,” she said about future demand for jobs.
By some estimates, about 5,000 construction jobs will be created.
According to the Vermont Labor Department, the average wage of a construction manager in 2011 (the latest figures available) was $39.25. A construction laborer’s average wage was $14.51; a carpenter’s, $20.08. Plumbers averaged $20.54, and electricians $19.28.
On the other end of the scale, Walmart’s wages are nothing to write home about. Walmart itself says its average national wage for a full-time employee is $12.40.
However, that does not account for its part-time employees. CNN says a typical Walmart employee is paid $22,000 a year, just below the federal poverty line for a family of four.
Glassdoor, an online site that looks at wages and working conditions, says an average Walmart sales associate earns $8.84 an hour and a cashier earns $8.45.
The hourly wage for a Vermont worker averaged out to $16.36, according to the state’s labor department. The mean was $20.71.
Not surprisingly, the highest wages are in the medical professions, with anesthesiologists having an average hourly rate of $117 and surgeons $104. The rate for physicians was $79; for psychiatrists, $65; and for general practitioners, $75.58.
The average Vermont wage for food preparation and serving related occupations was $11.99; for waiters and waitresses, $12.58; for maids and housekeeping cleaners, $10.83; amusement and recreation attendants, $9.88; cashiers, $10; retail salespersons $12.42; office and administrative support occupations $16.03; dishwashers, $9.60; hotel, motel and resort desk clerks $11.77; secretaries and administrative assistants (except legal, medical and executive) $14.44.
According to Mr. Stenger’s figures, 260 employees will be needed for the new Marina Hotel in Newport. Of those, 60 are needed for retail; 50 for administration; 75 for food and beverage service; 25 for operations; and 50 for hotel operations. Hiring would start in October of 2015.
At Burke Mountain, two hotels are scheduled to open in November of 2014. They would employ 25 people in administration and sales; 75 in food and beverage services; 100 in operations; and 25 in maintenance. Two more hotels, set to open the following year, would employ the same number of people in approximately the same professions.
Back at Jay, the Stateside Hotel is expected to employ 225 people and open in December of 2013. A new medical facility at Jay would hire four administrators, five registered nurses, and three doctors.
At AnC Bio in Newport, 250 people are expected to be hired. — 34 percent in manufacturing, 33 percent in research, and 33 percent described as “masters +.” The facility’s “clean room” is planning to hire another 250 employees, 20 percent in administration, and the remaining 80 percent in jobs requiring higher education.
Menck Windows in Newport plans to hire ten people in administration, five in management, and 125 in manufacturing.
While there is some concern that the Northeast Kingdom might end up with an economy that relies heavily on service jobs, which tend to be low paying, Mr. Cillo said that not all service jobs are dead ends.
“Some service jobs are fine,” he said. “You just don’t want to have a disproportionate number of them.”
contact Tena Starr at [email protected]