She’s Leaving Home. Or Maybe Not

If you believe the official reports and anecdotal kvetching from some in the business community, Vermont is in the midst of a demographic shift of seismic proportions. This shift goes by many names: “youth flight,” “the gray wave” and — least flattering to those who still live here — “the brain drain.” This phenomenon, which underpins Governor Jim Douglas’ “affordability agenda,” [1] is driven by some data that are troubling, though not surprising. They show that the Green Mountain State — like the rest of New England — is experiencing the double whammy of lower birth rates and a net out-migration of its citizens to other regions, mainly the South and West. This trend is expected to continue for another two or three decades, possibly longer.

Some economists, business leaders and state officials express serious concerns about the future viability of Vermont’s labor force. Without a talented and well-educated pool of young workers, the state will find it increasingly difficult to attract and retain well-paid jobs in the high-tech, knowledge-based and “green” industries Vermont finds so desirable. This, in turn, could have serious repercussions for the state’s capacity to raise tax revenues and pay for essential services. Simply put, the argument goes that if nothing is done to tip the demographic scale the other way, businesses will move elsewhere to fill their ranks.

Commerce and Community Development Secretary Kevin Dorn [2] cites NSK Steering Systems-America, in Bennington, as but one example of a Vermont company that expanded its operations in the South rather than in Vermont. “And we’re hearing this all across the state.”

But others challenge such doom-and-gloom predictions. They contend that, while some young people are leaving Vermont for greener — or at least warmer — pastures, calling it an “exodus” doesn’t tell the whole story. Perhaps it’s perfectly natural, even beneficial, for youths to move away to get an education, broaden their horizons and gain professional experience. Moreover, all the dire economic forecasts don’t take into account the in-migration of college students and somewhat older earners, who bring with them more knowledge, professional expertise and wealth. Finally, the critics conclude, characterizing this trend as a “looming economic crisis” is just another way for the Douglas administration to portray Vermont as an overtaxed, overregulated and business-unfriendly state.

If the interpretations of the data are debatable, the numbers are not. According to 2000 U.S. Census Bureau figures, published in the Department of Economic Development’s April 2007 report, “Growing Vermont’s Next Generation Workforce,” [3] Vermont ranks at the bottom nationally for the percentage of its citizens between the ages of 25 and 29, and at the top in the percentage aged 50 to 54. The Green Mountain State now has the highest percentage of high school graduates who leave the state for college. And, despite the more than 20,000 young people who flock into Vermont each year to attend one of 24 institutions of higher learning, about 80 percent of those college grads move away within one year of graduation.

“The governor and I view this as an enormous challenge,” says Dorn. “It occupies a very significant part of what this agency does, and what I do.”

Between September 2006 and January 2007, the state surveyed nearly 3000 Vermont alumni living in other states. It found that 93 percent expressed a desire to move back, but said the difficulty of finding affordable housing and high-paying jobs were the biggest barriers. Among young people who stayed, only 33 percent believe that Vermont “delivers on affordability.”

As the 25-to-65-year-old demographic shrinks, Dorn says, an “emerging new paradigm” — that is, more job openings than warm bodies to fill them — is creating a drag on the state’s economy. “And that drag is only going to grow into the future if we don’t bend that curve today.”

Art Woolf is a professor of economics at the University of Vermont who’s written extensively on this topic. He asserts that the graying of Vermont is actually happening faster than expected, with ramifications that simply cannot be ignored. When the labor force doesn’t grow, he explains, neither can the state’s tax base. As a result, only two things can happen: Taxes as a share of people’s incomes must rise, or essential services and spending must be cut.

In response to that impending dilemma, the Douglas administration has spent about $100,000 on its “PursueVT” [4] campaign to bring young, college-educated professionals back to the Green Mountains. PursueVT’s target demographic, Dorn explains, is professional twentysomethings who are from Vermont, have family ties here, and/or left the state to attend college and pursue careers. “The focus is really on people who know the Vermont product,” Dorn adds. “What we’ve found is that the brand identity of those who’ve sampled it is extremely high, and [they find it] very, very desirable.”

But some ask whether the state really needs to market “the Vermont product” to young professionals who’ve “sampled the brand” — as if our way of life were a soft drink. According to those critics, the picture is more complex and requires a detailed analysis of why people move here and why they leave.

Consider, for example, the findings published in December by the Public Assets Institute [5], a progressive Montpelier-based think tank. Jack Hoffman, who wrote the report entitled “Where They Come From; Where They Go,” [6] acknowledges that more people are moving out of Vermont than are coming in. However, recent IRS filings also show that those who migrated in tended to have more income than those who left — about 15 percent more per person, on average. “It would also be good to know who the people are who are moving to Vermont,” Hoffman writes — something that, Secretary Dorn admits, the state hasn’t studied.

Burlington economist Doug Hoffer believes the IRS figures make sense. Young people fresh out of college, as well as retirees relocating to the Sun Belt, typically have lower incomes than those in the 25-to-65 age group, who are in their peak earning years.

For his part, Hoffer is untroubled by the out-migration of Vermont’s youth and calls it much ado about nothing. “If you did grow up in Vermont, who would be surprised that a kid from a small town would want to see the world?” he says. “C’mon! This isn’t 1940.”

Actually, Hoffer finds it interesting that public officials express so much angst about the loss of young, high-tech professionals, whereas “There’s almost no talk about non-high-tech professions.” As he points out, Vermont has an entire business sector — the building and construction trades — where jobs require no postsecondary education. Nevertheless, that work is always needed, pays a livable wage and — unlike tech jobs and manufacturing — can never be outsourced. While Hoffer isn’t arguing that Vermont shouldn’t invest in higher education, he thinks it’s misguided to focus too narrowly on courting the college-educated twentysomethings.

“There is always going to be a percentage of young people who don’t want to go to college or who, after they’re done, would rather do something else,” he adds. “And, frankly, even if there were more good jobs here, an awful lot of them will leave anyway.”

Another critic of the “brain drain” theory is Paul Cook, a political science professor at the Community College of Vermont. He authored a piece in Colchester-based Livin’: The Vermont Way magazine entitled “A Fix in Search of a Problem: Is the Brain Drain Real?” in which he contends that Vermont is actually experiencing a “brain gain.” Cook points out that Vermont now has one of the nation’s highest percentages of adults 25 and older with a high school diploma. Moreover, the portion of over-25 Vermonters with a Bachelor’s degree rose from 29.4 percent in 2000 to 32.5 percent in 2005. “If this is a brain drain,” Cook concludes, “I must have been sleeping through my statistics class.”

A more comprehensive, regional analysis was produced by the New England Public Policy Center [7], a policy-analysis arm of the Federal Reserve Bank of Boston. In its November 2007 paper, “Is New England Experiencing a Brain Drain?” the Center suggests that the picture is “much more nuanced than headlines suggest.” It reports that New England still has the highest share of young professionals relative to its population of any region in the country — and that population remains stable. Additionally, while the decline in young people is often attributed to out-migration, the Center found that at least some of those numbers are due to people “aging out” of the 25-to-39 demographic. “In short,” the Center concludes, “a careful analysis of the data indicates that reports of a major ‘brain drain’ from the region are overstated.”

But Secretary Dorn takes little comfort in knowing that all of New England is experiencing flat population growth in its most desirable demographic. “Just because the other houses on the block are on fire,” he says, “doesn’t make the fire in your house any less tragic.”