Vermont bad business numbers don't add up

As if it were an organized campaign (though surely it is not) a small but devoted corps of Vermonters has been hard at work trashing the state.

Call them members of the Vermont counter-promotion corps, a self-selected army of scribblers who produce a steady stream of columns, letters to the editor (many apparently mailed to every newspaper in the state, quite a few of which run them) and other screeds with one common message: Vermont is one of the worst, if not the very worst, state to own a business in the entire universe.

Vermont businesses "find themselves at a competitive disadvantage to like businesses in other states and other countries," said Craig Newton, president of Phoenix Feeds and Nutrition, in a recent "My Turn" column in the Burlington Free Press.

"Small Business passed away today in the state of Vermont," began another such column by someone from South Ryegate. And in a letter to the editor, a reader from Stowe warns that Vermont is in danger of emulating France, where government policies have "driven employment into neighboring countries, to the extent that France's economy is now in desperate straits." Quelle horreur! (Or maybe not. Based solely on the economic data, a case can be made that that the typical Frenchman/woman has a higher quality of life than the typical man/woman anywhere else. ) Nor does this chorus of complaints come solely from independent citizens and businesses. On its website, the Vermont Republican Party highlights a report that a business magazine called Chief Executive ranks Vermont only 39th out of 50 states as a good place to own a business.

Then how is it that in the last six months private sector employment in Vermont has risen at a relatively healthy clip, according to the latest data from the Bureau of Labor Statistics? How is it that (according to those same BLS figures) Vermont's civilian labor force is inching up even as it falls elsewhere? Maybe because Vermonters are getting jobs at a faster rate than Americans in other states. The state's unemployment rate - already one of the lowest in the country - just went down again.

And remember, those jobs are in the private sector. Governments at all levels are shedding jobs. It's Vermont businesses that are hiring. They must be doing OK.

Not that Vermont businesspeople don't have real problems and perhaps some legitimate complaints. But the evidence that Vermont is or is about to become a uniquely horrible place to run a business is well, it isn't.

According to some accounts, Vermont's "business climate" must be superb. An analysis of federal figures by Startup America found that Vermont had one of the highest rates of business startups in the country over the last six years.

The state doesn't do all that well based on official government data. But it doesn't do that poorly, either. The Small Business Administration's figures indicate that Vermont is in the middle of the pack when it comes to business success and/or failure. So do the decidedly pro-business Kauff man Index of Entrepreneurial Activity, and Fast Company magazine, which rates Vermont the 21st best state when it comes to business innovation.

Actual evidence, then, as opposed to impressionistic griping, shows that Vermont is about as good a place to start and run a business as any other state. Yes, there are states where business success is more common. But just as many where that success is harder to come by.

One reason businesses often thrive in Vermont is that Vermonters have more money to spend than most Americans. Disposable income per capita in the state in 2013 was $46,000, higher than the national average, higher than it was in 31 other states. Very little is better for business than customers with money in their pockets.

Vermont, in short, has a relatively strong economy. Nothing is better for business than that.

So why all the complaining? Well, first let's note that Vermont's quasi-official business establishment - the Chambers of Commerce, Associated Industries of Vermont - are not joining the "worst-in-the-nation" chorus. The leaders of these groups have their gripes, but they know that trashing the state is, among other things, bad for business.

Instead, those asserting Vermont's place at the bottom of the business totem pole are independent freelancers echoing a venerable (if rarely successful) political slogan.

But just for a moment, take a look at the situation from their perspective, which is valid, if confused. Here their complaints are understandable, even if not justified.

Some (though by no means all) upper-income Vermonters (and businesspersons tend to be upper income) pay more taxes than do their counterparts in other states. Not that this year's legislative session raised their taxes. But there was talk about doing so, talk that probably dismayed those whose tax bills might have been affected.

And the Legislature did raise the minimum wage. Businesses will have to pay those higher wages, and it's not unreasonable for them to be unhappy about that.

Of course, that higher minimum means many Vermonters will have even more disposable income to spend at local businesses. But it's natural for people to gripe more about a cost than to be pleased about a benefit.

It's kind of like Vermont's relatively strong environmental regulations.

They are both a cost and a pain in the neck to developers and other businesses. They also lead to cleaner air and water, more open space, more intact forests. Good for business.

Besides, people don't like to be told what they may and may not do.

Government mandates, which is what Greg Newton of Phoenix Feeds and Nutrition was complaining about, make him feel as though he is "covered with leeches," his "blood is being sucked out." It's not surprising that he's angry about the costs government imposes on him.

And not really surprising that he seems oblivious to the benefits it bestows on him. According to its website, his company's biggest customers include dairy farms. Dairy farming is perhaps the most government-protected, government-subsidized industry in the history of the world. Absent government, Mr. Newton might well be notably less prosperous.

But the main reason these folks are complaining is - folks complain.

Kvetching has become the real American National Pastime. Not just as individuals, either. The American complainer gripes not only that "they're all out to get me," but "they're all out to get me and mine, me and the people like me." What seems curious - at least at first glance - is that the loudest of these complaints these days come not from the poor and weak, but from the rich and powerful.

Again, there is a plausible explanation. All this talk about inequality sometimes degenerates into a simplistic attack on the rich, just for committing the sin of being rich.

Which is not a sin, just a condition.

An enviable condition, to be sure, but nobody likes to be told that his condition - often deserved - is a sin.

The complaints of some Vermont businesspeople, then, are not hard to understand, even if their numbers don't add up.

Jon Margolis is VTDigger's political columnist.


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