Vermont’s per capita income remained above the U.S. average last year, which makes 2017 the ninth consecutive year that Vermont has surpassed the national income level. Before 2009 Vermont’s income had never been higher than the U.S. average — and the numbers go back to 1929.
Per capita income is simply the total income earned by Vermont residents from all sources — among them wages and salaries, dividend and interest income, pension income, Social Security and unemployment payments, and profits — divided by total population. Vermont’s total personal income amounts to about $32 billion, or $51,100 on a per capita basis, about $700 above the U.S. average.
Today’s contrast with Vermont’s past is striking. Before the Great Depression, Vermont was relatively prosperous, with a per capita personal income at 90 percent of the U.S. average. That was our high point for quite a while. Vermont did not get back to that level until the late 1980s.
Beginning with the Great Depression of the 1930s, Vermont’s income, relative to the U.S., fell steadily for the next two decades, with a decline interrupted only by a brief upturn in the late 1930s and again during World War II. That means the Great Depression was even worse for Vermonters than it was for the nation as a whole.
By the early 1950s Vermont’s per capita income had fallen to only three-quarters of the national average, about where West Virginia, the second poorest state in the nation, is today. Vermont was so poor that only 10 states, all in the South, had incomes below ours.
The early 1950s was Vermont’s low point. By the late 1960s, Vermont’s relative income had just about returned to where it was three decades earlier. But that peak was short-lived. When oil prices tripled in the mid-1970s and then doubled later that decade, Vermont’s energy-dependent manufacturing sector was hard-hit, and Vermont’s economy suffered.
But the state’s economy was resilient and adapted to higher energy costs, growing faster than the nation during the 1980s. By the end of that decade Vermont’s inflation-adjusted per capita income was twice what it had been in the 1960s, three times higher than it was in the early 1950s and, compared to the U.S. average, higher than it had been at its previous peak in 1930.
The deep New England recession of the late 1980s and early 1990s led to a long period of comparative stagnation, with Vermont’s income stuck at about 92 percent of the national average. But beginning in about 2000, Vermont’s income began to grow faster than the nation’s. Surprisingly, Vermont per capita income also outperformed the U.S. during the Great Recession of 2007 to 2009. By 2009, Vermont’s income exceeded the U.S. average for the first time in history.
The story is a different one when we compare Vermont to our New England neighbors, all of which, except for Maine, have higher per capita incomes than Vermont. Vermont’s income was only two-thirds of the regional average in the 1930s, but by the 1960s Vermont had made up a lot of the difference between its income and the New England average, rising to almost 85 percent of the regional income level.
Vermont lost ground against our neighbors during the late 1970s but for the last three decades it’s been stable at about 80 percent of the New England average. We are an above-income state compared to the nation, but we still the poor cousins in a rich region.
Connecticut and Massachusetts have the highest per capita incomes in the nation and New Hampshire ranks seventh. At nineteenth highest, Vermont has a long way to go to catch up, and we’re unlikely to see that happen. Ever.