Monday, December 25, 2017

Vermont Population Trends and Incomes--The Demographic Challenge

Vermont Population Trends and Incomes—The Demographic Challenge

For most all Vermont's 14 the current economic trends driven downwards by senior lower income households doubling over the two decade period 2010-2030 while under-65 households significantly decline.

The latest Census income estimates for Vermont—the five year period 2012-2016—show senior annual median incomes of $32,000 (rounded to the nearest thousand) 30% less than the median for all households, $56,104. These two income numbers become critical when looking at population growth and the Vermont economy.

For all of Vermont counties for the average of the two official state population projections growth of 3.1% is projected overall for the 2010-2030 period. With the state about a third of the way through the two decade projection period Vermont's flat growth is close to the lower projection. This bodes poorly for our overall economic performance as a doubling of senior population from 12% to 24% of total population with a far lower household income than non-seniors means absent other factors overall total income for Vermont declines. Already there are clear signs—even with the current national longest economic growth period since the Depression—that real declines are occurring in spending patterns of Vermont households.

Even the one Vermont county projected for significant overall population growth—Chittenden--is not immune to these trends. Chittenden population projections show monthly decline of 36 under-65 population versus an increase of 81 seniors. While Chittenden County is “growing,” that growth is only seniors while higher income non-senior income population declines. This suggests overall a slow economic decline in real terms for the State's population in terms of total household income and median income—all else being equal—and for Chittenden County a sluggish growth as best.

Statewide the senior population growth each and every year equals the Town of Stowe population and the loss of under 65 population equals a similar decline of population of that group equal to the population of the Town of Johnson—these trends projected to last the 2010 to 2030 period. Today and every day—10 less under 65 population and 12 more seniors.

While this decade clearly represents the best of economic times for Vermont some indicators already show a shifting of spending patterns in what is essentially a fairly flat income picture overall. For example, traffic growth shifted from a pattern of rapid growth in the 1980s to a peak in the early 1990s and on most urban and non-interstate areas a slow decline since the early 1990s. The shift from local retail to on-line buying comes into sharp relief with retail sales numbers for the year ending June 30, 2017 reported by the Vermont Tax Department (Seven Days, December 20, 2017, p 170) with Burlington 0% change, Williston -2% and South Burlington -4%. These numbers occurred during a period of about 2% inflation. These top Vermont retail centers not only reflect the “Amazon effect” of shifting retail sales to the internet, but also the spongy underlying demographics at play here in Vermont. The implications for State budgeting and spending, taxation policy, etc., are enormous. For a century Vermont population from the Civil War through 1960 remained between 300,000 and 400,000. The changes brought on by the interstate highways, the ski industry and baby boomer population growth fueled a population surge of over 50% to 625,700 in 2010 along with increased incomes and investment.  From 2010 Census estimates Vermont population declined just over 1,000 as of 2016, 624,600.  Now growth has subsided again and the composition of Vermont population strongly indicates a relative economic retreat and staid population numbers.