Vermont saw the nation’s highest increase in median household income last year, and economists say it’s tough to pinpoint the exact reasons for the jump.
New U.S. Census data shows that median household income in Vermont rose by 9.8% between 2022 and 2023, more than double the national average and the largest year-over-year increase here in at least a decade.
Mathew Barewicz, director of labor market information at the Vermont Department of Labor, said a rise in wages accounts for a portion of the increase.
“Particularly back in 2023, the number of open jobs estimated across the Vermont economy was very big, the supply of labor has been quite low for the last couple of years … ultimately leading to competition for labor, therefore increasing the hourly wage,” he said this week.
But at 3.7%, Barewicz said, wage growth alone doesn’t account for the gains in household income, which stood at 5.4% after adjusting for inflation.
“Everything has to put into context too — it’s not like everyone feels 10% richer over that time period because of historically high inflation rates,” he said.
Barewicz said it’s also important to note that much of the growth was concentrated in Chittenden County, which saw median household income rise last year by 13.7%.
“So we have an issue here where potentially the economic gains are not being realized equally across the state,” he said. “You know, is everyone getting the same seat at the economic buffet, so to speak.”
This one indicator doesn’t contain all the nuance of what a family is experiencing.Steph Yu, Public Assets Institute
Steph Yu, executive director of the Public Assets Institute in Montpelier, said other factors for the rise in household income could be people working more hours, or more members of a household joining the labor force. She said increases in investment income could also be at play.
Yu said median household income is an important economic metric and that the increase in Vermont is “a good sign.” But she said Vermont still ranks in the middle of the pack nationally. And she said the increase doesn’t necessarily reflect the financial reality experienced by many Vermont households.
“This one indicator doesn’t contain all the nuance of what a family is experiencing,” Yu said. “If you’re a family that depends a lot on driving, and gas prices are high, then that’s going to hit you harder than somebody else. If you’re a renter, you’re getting hit particularly hard, versus if you’re somebody who … has a fixed, 30-year mortgage.”
Have questions, comments or tips? Send us a message.
_
