Key Facts & Figures: 11. Vermont Wages and Wage Growth

The Wealth of Nations - Adam Smith

About 309,000 Vermonters work as employees for some entity in the private sector or government.  The salary or wage they earn is one of the most important factors determining the quality of the lives they lead.  This article provides a detailed assessment of prevailing wages and wage growth in Vermont.

The information below is from the Vermont Department of Labor and/or the US Bureau of Labor Statistics.  Inflation data is from the Federal Reserve Bank of St. Louis.

Historical Wage Growth

 From 1997 to 2007, average wages in Vermont grew at a compound annual growth rate of 3.8%, reaching $36,323 in 2007.  During this same period, the average inflation rate, as measured by the Consumer Price Index, was 2.5%.  Wages were growing at a much faster pace than inflation, resulting in attractive growth of real incomes and purchasing power.  This was a pretty good decade.

Following the financial crisis of 2008, wage growth in Vermont slowed.  From 2007 to 2016, the compound annual growth rate of wages was only 2.2%, with average Vermont wages reaching $44,126 by 2016. The average inflation rate during this period was 1.7%.  The difference between income growth and inflation rates narrowed considerably, so the growth of real income was greatly reduced.  During this decade, people were working just as hard, but their purchasing power wasn’t growing very fast.  This decade didn’t feel so good.

Vermont vs. USA

 Average wages in Vermont have been below average US wages for a long time.  In 2007, Vermont’s average wage of $36,323 was $8,039 less than the US average wage of $44,362.  By 2016, this gap had widened to $9,389, when average US wages were $53,515 compared to Vermont at $44,126. Basically, it took Vermont nine years to catch up to 2007 US average wages!

In New England, only Maine has a lower average wage than Vermont.  All the other New England states have higher average wage levels.

Current Wage Trends

 Since 2016, wage growth in Vermont has accelerated nicely.  From 2016 to 2017, average wage growth was 2.5%, reaching $46,126. In the first quarter of 2018, this growth rate increased to 3.0% and in the second quarter reached 4.1%. The most recent data covering the third quarter showed year-over-year growth of 2.7%.

Vermonters must be welcoming this return to meaningful real income growth.

Regional Differences

 Vermont may be a small state, but average wage levels vary widely on a county- by-county basis.  Indeed, the average wages on the top earning county exceed the lowest county by 34%. The table below shows 2017 average wages by county, ranked from highest to lowest.

                                            2017 Average Wages ($)

County Average Wage
Chittenden 52,416
Washington 50,336
Addison 45,949
Franklin 45,806
Windsor 44,586
Rutland 42,751
Bennington 41,785
Windham 41,053
Caledonia 39,735
Orange 39,556
Lamoille 38,520
Orleans 36,574
Essex 36,327
Grand Isle 34,620
Vermont Average 46,186

Source: Vermont Department of Labor, Economic and Labor Market Information

Wages and Employment

Income and wages also differs depending on who the employer is.  The Vermont Department of Labor tracks average wages for every type of job and profession you could think of.  Looking at all these professions is well beyond the scope of this article.  However, all employment falls under four big categories: private ownership, federal government, state government and local government.  A quick summary of these major categories is quite interesting, as follows:

2017 Average Wage by Employment Sector ($)

Sector Average Wage % Civilian Employment
Private Ownership 45,207 82.9%
Federal Government 74,992 2.2%
State Government 57,779 5.3%
Local Government 41,513 9.6%
Vermont Average 46,186 100%

Source: Vermont Department of Labor, Economic and Labor Market Information


Vermont would appear to be a low wage state.  The average Vermont wage is 17% below the US average.  No single county in Vermont has an average wage as high as the US average and six Vermont counties have average wages 25% to 37% below the US average.

More recently, the news has been more encouraging.  The overall economy continues to grow, Vermont’s labor market is tight and wages are now growing at the fastest pace in over ten years.  Long may this last!

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