By Rob Roper
Vermont Business Magazine (VBM) wrote about some good news for a Vermont economy that has otherwise been pretty moribund for several years. The bright spot is our tech industry. As the VBM article points out, “Vermont’s tech sector makes up a quarter of the state’s workers and 40 percent of its wages, and generates higher pay and faster job growth compared to the state’s overall economy.”
That’s great, but it’s still a growing slice of a shrinking economic pie. In other news, this week saw the publication of the 9th edition of “Rich States, Poor States,” which ranks Vermont’s economic outlook as 49th in the nation, based on our tax and regulatory environment. Yes, this is just one ranking, but whether it’s “Rich States, Poor States,” Forbes, the Tax Foundation or one of the other ranking organizations, Vermont consistently performs badly in these things. On the other hand, we do extremely well in rankings that score quality of life.
The challenge for our legislature is (or rather should be) to marry that high quality of life with economic policies that foster growth and prosperity. In other words, instead of settling for a Vermont that’s a great place to live if you can afford to live here, we should be striving to be a great place to live that is also a great place to earn a living.
One opportunity to move in this direction would be to pass the Independent Contractor bill (H.867), which passed out of the House Committee on Commerce and Economic Development on a unanimous tri-partisan vote of 11-0. This legislation, in a nutshell, makes it easier for individuals to work as independent contractors rather than as direct employees, and it clarifies the laws surrounding independent contractors so that employers and employees can easily comply with the law without worrying about penalties and fines.
This bill would help bring the state into line with the new realities of the 21st Century economy in which many people are creating their own jobs in rapidly evolving marketplaces. We have all witnessed the rise of the sharing economy with companies like Uber, AirBnB, eBay, Freelancer, etc. These platforms are generating billions of dollars’ worth of economic growth.
Allowing individuals to operate more easily and independently as entrepreneurs is not just a positive economic policy, but also one that caters to lifestyle. Workers, particularly young people, are no longer looking for a forty-year career with a single company. They change jobs regularly, and are more interested in finding jobs that allow them to pursue rewarding lifestyles outside of work. Vermont is (or rather could be, given some imagination and leadership) perfectly situated to take advantage of these trends.
Which brings us back to that good news about Vermont’s tech sector. An industry that is dynamic, constantly changing and exploring new directions is perfect for attracting and growing independent contractors who do coding, graphic design, marketing, accounting and finance for small, start-up companies that are not ready to bring on large numbers of full time employees.
These are well-paying jobs in growth businesses. So why did the Speaker of the House recently declare the Independent Contractor bill essentially dead? The same sclerotic, old-economy special interests that have earned for Vermont that 49th-in-the-nation-for-economic-outlook ranking circled the wagons and killed the bill in the House. But hope still exists for progress in the Senate before this session ends and our incumbent politicians head off to the campaign trail, asking for our votes for what? More of the same economic stagnation?
Here I will confess a guilty pleasure for the Discovery Channel’s show “Naked and Afraid,” in which two people are dropped in some wilderness landscape with nothing but a single survival tool each and the challenge to stay alive for three weeks. Every show features at least one scene in which these folks struggle to build a fire. They work mightily to generate one small ember, nurturing it with all the care imaginable in hopes of turning the small spark into a sustainable flame. Here we have that spark with our tech industry, and the legislature, rather than lovingly blowing on it and feeding it dry grass and twigs, is playing the role of monsoon clouds on the horizon.
The House blew it. Let’s hope the Senate has more sense.
Rob Roper is president of the Ethan Allen Institute (www.ethanallen.org). He lives in Stowe.
