(12/03/20 10:57am)
Addison County could see a population decline of up to 7% as well as a stagnating economy over the next decade, according to World Data Lab projections. These declines can be attributed to gaps in housing, childcare services and employment opportunities, according to state representative Robin Scheu (D-Middlebury) and Professor of Economics Paul Sommers.
Scheu believes that housing is a primary contributing factor. Rep. Scheu moved to the county 28 years ago with her family and has been in Middlebury ever since. “Starter homes for starter jobs are many of the homes we need,” Scheu said, and starter homes are hard to find in Addison County.
Scheu spent nine years as Executive Director of the Addison County Economic Development Corporation before representing Addison County in the Vermont General Assembly. During her time with the corporation, she found that people were able to find work in Addison County but unable to find homes.
“They ended up not taking the job that they were offered because they couldn’t find a place to live that met their needs for their family,” Scheu said.
Median house prices have been rising in Addison County and are among the most expensive in Vermont, which could indicate that it may be difficult to find starter homes. However, such a significant decline in population is unlikely to be caused by housing alone.
Scheu also points to a lack of childcare in Addison County as a possible reason for population decline. Addison County is projected to see a decline in families in the next 10 years, with forecasts suggesting that adults aged 30–65 is the demographic that will see the largest population decline.
“As a working family, you don’t only want to have [quality] education … childcare is a really big thing,” Scheu said.
Other economic trends could also play a role in demographic shifts. Professor of Economics Paul Sommers associated the decline in the workforce demographic to decreased employment opportunities in Addison County. The workforce is projected to decline from 64% of the population in Addison County to 58% by 2030.
Per capita spending in Addison County is also projected to fall behind the state’s in the next decade, although it had tracked the state’s closely before the pandemic. After a slight recovery in 2021, Addison County’s spending power will remain around 4.5% lower than it was in 2019, while Vermont spending power is expected to be around 2% higher than 2019 levels. But the news isn’t all bleak. In fact, the pandemic has resulted in a wave of immigration into Vermont, according to University of Vermont researchers. A third of survey respondents — many of whose jobs have been moved online — also said that they plan to stay in the state after the pandemic. In catalyzing a shift to remote work, the pandemic may have also created new opportunities for a state grappling with its issue of population decline.
(10/01/20 10:00am)
Figure 1: Spending power and Population
The economic shock of Covid-19 will stifle consumer spending in Addison County this year, and it is projected to remain below pre-Covid levels through the next decade. Continued population decline in the county is likely to exacerbate this decrease in spending.
This summer, businesses in Addison County grappled with months-long closures due to the Covid-19 pandemic. Business owners reported that sales dropped as stores shifted to online operations and offered curbside pick-up or takeout. Although Vermont’s relatively low case count has allowed the state to reopen more successfully than others, financial recovery remains a far-off goal for many businesses.
Becky Dayton, owner of the Vermont Book Shop on Main Street, closed her storefront to customers on March 16 and shifted to an all-curbside delivery model. With the statewide shutdown, many of Dayton’s employees were unable to come in to work. “It was impossible for us to keep up with the business [with a reduced staff],” Dayton said.
Parts of downtown Middlebury were also closed for 10 weeks this summer due to construction of the tunnel for the Middlebury Bridge and Rail Project, which also may have contributed to decreased spending.
“My business has been down anywhere from 40% to 55% since March, and we have had to make really significant adaptations, but it's hard to put my finger on what of that was the pandemic and what of that was construction,” Dayton said.
Sales have slipped further with customers still reluctant to spend time in public spaces. Dayton said that she expects the shop’s sales to remain low for some time.
Still, economically, Addison County is managing the Covid-19 pandemic better than the rest of the United States. According to World Data Lab, a data company that produces spending and demographic forecasts, Addison County will see a 7.3% decline in consumer spending in 2020, slightly less than the 8.0% the US will see overall. While these numbers suggest that Addison county has done well with managing the Covid-19 crisis, the total spending power in the county will decrease significantly over the next decade.
If current trends continue, Addison County is projected to lose $800 million over the next 10 years, according to the World Data Lab forecasts. In 2020, Addison County residents will spend $125 million less than in 2019. Thereafter, the loss will level off at $73 million less per year compared with 2019 spending levels. This substantial and sustained decrease in expenditure could reasonably be accompanied with businesses shutting down in Addison County, smaller profit margins and revenues for businesses — or both.
While total consumer spending in the U.S. will recover by 2024, the projections suggest that Addison County will not see a recovery in the next 10 years. At least part of this decrease can be attributed to the broader trend of population decline in the county.
Vermont has implemented policies at the state and local levels to address the declining population and fill vacancies at Vermont businesses. The New Worker Relocation Grant Program offers people who move to and work-full time in Vermont grants of up to $7500 for relocation expenses such as first month’s rent, closing costs on a primary residence, shipping, hiring a moving company and more. Immigration and affordable housing advocates have also pushed for policies that encourage more people to settle in the state.
Figure 2: Spending power per capita in Addison County
According to World Data Lab, Addison County will recover from this recession in 2026 when spending power per capita reaches pre-Covid numbers. Furthermore, spending power per capita will increase by 3.3% from the recovery in 2026 to 2030.
When comparing the spending power per capita and the total spending power numbers for Addison County, it is evident that Covid-19 has and will continue to have a big impact on the county. However, a more lasting problem is the rapidly declining population.
Addison County’s population is among the top 10% of fastest declining populations in the US, with a projected 7% decline from 37,000 today to 34,000 by 2030. While the population in Addison County has been constant for the last 20 years, it will likely see a sharp decline in the next 10 years and drop to its lowest numbers since 1994. This decline in population is why total expenditure in the county is projected to broadly stagnate for the next 10 years.
Addison County has been able to sustain a low number of Covid-19 cases, but this pandemic may have triggered the stagnation of consumer spending over the next decade. The decline of the population will ultimately be the reason that Addison County is projected to lose $800 million over the next decade.
Although on an individual level, people in Addison County will be better off in 2030 compared to 2019, the county itself will not see a full recovery. With less money being spent in the county over the next 10 years, it seems inevitable that businesses, particularly small businesses, have a difficult era ahead.