Vermont labor market strong but shifting: rise in very small ‘‘establishments,’’ southern counties see labor-force declines

Matthew Barwitz, director of the Economic and Labor Market Information Division at the Vermont Department of Labor, told the Senate Committee on Economic Development, Housing & General Affairs on Jan. 21 that Vermont’s job market remains tight even as its composition shifts.

Barwitz said Vermont had an estimated 306,971 covered jobs and a 2023 realized average wage of $61,813, up about 3.7 percent from 2022. “The quarterly census of employment and wages ... is a census, meaning that everyone is required to talk to us,” he said, stressing the QCEW’s comprehensiveness even as it carries a roughly five‑month publication lag that limits timeliness for near-term policy changes.

Why it matters: the QCEW underpins most state labor estimates and sampling frames. Barwitz said the state has seen near‑5 percent growth in the number of registered establishments — a rise he tied to remote employment arrangements in which out‑of‑state firms must register when they hire a Vermont resident. “We now have 1 firm, 1 employee,” he said, noting many new establishments are single‑person or otherwise very small.

Barwitz identified the largest private employment sectors as health care and social assistance, retail trade, accommodation and food services, and manufacturing; together those four sectors account for about 47 percent of covered employment. He said professional and technical services — business‑to‑business services conducive to remote work — have grown and represent many of the small establishments being added.

On regional trends, Barwitz said labor‑force contraction has been concentrated in four southern counties: Bennington (down ~12% from peak), Rutland (~16%), Windham (~15%) and Windsor (~11%). Franklin and Chittenden counties, by contrast, are at or near labor‑force highs. He summarized statewide unemployment measures as roughly 85,100 unemployed residents under the Bureau of Labor Statistics’ standard definition and a U3 unemployment rate of about 2.4 percent, which he noted ties Vermont for second‑lowest nationally.

Barwitz described other reporting products and indicators the Department produces or uses: Current Employment Statistics (monthly, sample‑based estimates), OEWS (annual occupational wage estimates across roughly 600 occupations), LAUS (local area unemployment statistics derived from the Current Population Survey), JOLTS (job openings, layoffs and turnover), and weekly unemployment insurance (UI) reporting. He said JOLTS currently estimates about 15,000 job openings in Vermont, down from pandemic peaks above 20,000.

On UI finances, Barwitz reported the trust fund balance exceeds $300 million and that the state is on its lowest current tax schedule, with the trust fund growing by roughly $15 million a year under present conditions. “We are accruing about $15,000,000 a year in the trust fund,” he said, while cautioning that liabilities (and benefit costs) rise as average wages rise.

Committee members asked for follow‑up data and analysis, including: county and long‑run trend charts for sector employment (manufacturing/durable vs. nondurable), wage breakdowns by county and occupation, state GDP figures, and a sectoral breakdown of current job openings to compare openings with job‑seekers’ skills. Barwitz and committee members discussed data limitations (sample sizes for LAUS and CPS cross‑tabs; QCEW lag) and possible partnerships (UVM Center on Rural Studies, workforce development staff) to gather finer‑grained survey information.

Directives and next steps noted at the meeting include requests that the Department of Labor provide or coordinate: (1) a state GDP briefing or data source recommendation; (2) county‑level wage and 20‑year trend charts for major sectors; (3) a best‑effort sectoral breakdown of job openings and how that aligns with workforce development registrations; and (4) early flags if employers begin reporting many zero‑employee establishments that could indicate remote‑work reversals or declines in in‑state employment. Committee staff and Department contacts named for follow up included Heidi (committee staff), Rowan Hawthorne (Dept. of Labor policy liaison), and Jay Ramzik (workforce development contact).