The Economy of Vermont: A Labyrinth of Opportunities and Challenges
By Shirenomics Staff
In the gilded halls of the University of Vermont’s Dudley H Davis Center, the 2025 Vermont Economic Conference kicked off with a familiar figure —Mat Barewicz, the Economic and Labor Market Information Chief at the Vermont Department of Labor. With more than two decades of experience spanning public and private sectors, Barewicz has earned a reputation as one of the most insightful voices on the intricacies of Vermont's economy.
Economics Beyond Scarcity
Barewicz is redefining a subject that often feels distant or impenetrable to the average person: economics. While traditionally framed as the study of scarcity, he urged a more holistic view, one that includes relationships, community services, and cultural exchanges as part of the economic system. “Economics is about trade-offs,” he noted, “but overemphasizing scarcity risks fostering a scarcity mindset. Our measures of success must extend beyond GDP to ask: Are basic needs being met? Are our communities thriving?”
This expansive view of economics was more than an academic exercise; it was a foundation for discussing Vermont’s unique challenges and opportunities.
The Duality of Vermont’s Labor Market
Vermont’s labor market tells a story of juxtaposition. The state boasts one of the lowest unemployment rates in the country—hovering between 2.2% and 2.4%, tied with North Dakota and second only to South Dakota. However, these numbers conceal a deeper tension: a labor force that is both shrinking and aging.
Over the past two decades, Vermont’s labor force grew steadily until 2010, when the combined effects of the Great Recession and the aging of the baby boomer generation began to exert downward pressure. From 2010 onward, the state has faced a gradual decline in available workers, exacerbated by a demographic reality—deaths outnumber births, and the young are leaving at a rate that outpaces new arrivals.
This has created a paradox. Despite low unemployment, Vermont’s labor market remains tight, with approximately 15,000 job openings—many unfilled due to a lack of skilled labor. “Employers aren’t just competing for talent; they’re competing against time,” Barewicz remarked, highlighting how the aging workforce places additional strain on sectors reliant on institutional knowledge and experience.
The Urban-Rural Divide
Vermont’s population dynamics further complicate its economic landscape. While counties like Chittenden and Franklin continue to see labor force growth, southern and rural counties such as Bennington, Windsor, and Windham have seen double-digit declines. The state’s economic vitality is increasingly concentrated along the I-89 corridor, leaving rural regions to grapple with stagnation.
Barewicz drew attention to the state’s recent population surge during the 2020 Census, which showed an increase of 17,000 residents. But this gain proved short-lived; by 2024, Vermont was once again losing more people than it gained. This ebb and flow underscores the precariousness of relying on in-migration to offset demographic decline.
Remote Work and the Changing Business Landscape
A silver lining has emerged in the form of remote work. Vermont has seen a surge in business registrations, driven largely by remote workers establishing one-person firms. This trend has bolstered professional and technical services, a sector characterized by high wages and low employment density. Yet, as Barewicz cautioned, this growth does not necessarily translate into widespread economic benefits. “The rise in establishments hasn’t meaningfully moved the needle on employment,” he explained. “It’s a sign of a changing economic structure, not a universal remedy.”
Wage Growth and Inflation: A Delicate Balance
Wages in Vermont have grown slightly faster than inflation in recent years, particularly in urban areas like Burlington, where demand for skilled labor drives higher pay. However, the gap between wages and living costs remains a persistent issue, particularly in rural areas. “Wage growth is a marathon, not a sprint,” Barewicz said. “It lags behind inflationary pressures, creating a disconnect that’s difficult to bridge.”
Charting a Path Forward
As Vermont navigates its economic future, Barewicz emphasized three areas of focus:
Investing in Workforce Development: Career technical education, registered apprenticeships, and on-the-job training are essential for equipping Vermonters with the skills needed to thrive in a rapidly evolving labor market.
Addressing Population Decline: Attracting and retaining younger populations is critical. This includes not just job creation but also investments in housing, healthcare, and transportation infrastructure.
Supporting Rural Economies: Policies must prioritize rural regions to bridge the growing divide between urban and rural Vermont. Without targeted interventions, the state risks leaving large swaths of its population behind.
An Economy of People
Barewicz concluded with a poignant reminder: “The economy isn’t just a system of numbers and graphs—it’s people. Businesses that thrived post-pandemic understood this. They prioritized their workers, embraced flexibility, and adapted to meet human needs.”
As Vermont stands at the crossroads of demographic change, economic transformation, and environmental challenges, the path forward will require the kind of thoughtful, people-centric approach Barewicz advocates. The question is whether the state can marshal the collective will to act before time—and people—run out.
