New data from the Vermont Department of Labor was presented to the Senate Economic Development, Housing, and General Affairs committee this week. The data underscores the urgency of addressing Vermont’s workforce challenges with a coordinated, long-term plan. While Vermont’s unemployment rate remains low, job growth in 2024 slowed dramatically to just 400 new positions statewide, leaving the state nearly 5,000 jobs below pre-pandemic levels.

This stagnation contrasts with national trends. Many states have rebounded past 2019 levels, buoyed by faster population growth and stronger economic momentum. Vermont’s modest gains came almost entirely from the Burlington metro area, where jobs grew by 900. Outside that region, employment is contracting, highlighting growing regional disparities and varied infrastructure and spending capabilities.

Many sectors continue to struggle. Manufacturing lost 800 jobs last year, and administrative support, wholesale trade, and hospitality all experienced declines. Manufacturing employment has now dropped two years in a row, raising red flags for a sector critical to Vermont’s economic diversity.

Complicating the picture is Vermont’s labor force composition. According to the latest Household Pulse Survey, 55.2% of Vermonters not working cited retirement as their main reason, compared to just 46.3% nationally. Vermont also reports more individuals caring for elderly family members, further reflecting the state’s aging demographic profile. While participation rates are rising modestly, the pool of working-age Vermonters is not growing fast enough to meet economic demand.

The data reinforces a clear trend: Vermont’s working-age population is shrinking faster than the national average. Our state cannot afford to approach workforce issues piecemeal. Policymakers must act on what the data clearly show: Vermont’s labor market is under strain from demographic pressures, uneven growth, and emerging economic volatility.

Long-term trends are not the only concern. The 2023-2024 data does not yet account for new economic stressors, including rising tariffs, global supply chain disruptions, and inflationary pressures, all of which are creating new challenges for employers in 2025.

The Vermont Chamber continues to call focus to the cohesive, statewide Economic Action Plan, produced by the Vermont Futures Project, that addresses these realities head-on. As Vermont’s economy continues to struggle, both efficiency and expansion strategies are required to address the need for growth in Vermont’s workforce. While the fragmented measures being taken by the Legislature may aspire to these goals, added scope, scale, and data-informed solutions are necessary to solve the root causes of Vermont’s workforce challenges. This includes investing in workforce retention and recruitment, expanding housing, and aligning education and training systems with Vermont’s current and future economic needs.

These aren’t new conversations, but the data makes them more urgent than ever. Now is the time for a strategy that prepares Vermont not just to recover, but to compete.