VT Forced 1 in 4 Businesses to Close 1+ Days in 2020, more than 46 States

If you had to predict which state’s businesses were most likely to rebound post-Covid, you would be hard pressed to bet on Vermont. Vermont business owners (especially a certain 6,067 of them) are burdened with a state government that has been exceedingly more cautious than other states in allowing businesses to operate.

Vermont’s government temporarily shut down a higher percentage of businesses than any other New England state in 2020. Only 3 states in the US have shut down a higher percentage of businesses: Michigan, Pennsylvania and Washington. The benchmark includes any businesses that been shut down for at least 1 day in 2020.

The Bureau of Labor and Statistics (BLS) created the "2020 Business Response Survey” as a way to gauge how US businesses have been impacted by government-enforced closures due to Covid-19 precautions. The vast majority of such closures are due to state government action, as the federal government functioned more in a support role.

6,067 closed Vermont businesses works out to 26.5% of all businesses, or 1 closure per 3.8 businesses. Many of whom are still closed and will never re-open.

Massachusetts is the only New England state anywhere near us, at 23.1% closures, or 1 closure per 4.3 businesses. The other New England states, (Connecticut, Maine, Rhode Island and New Hampshire) all have a similarly low rate, of about 1 closure per 6 businesses.

As Vermont’s budgetary black hole beckons, our legislators and Gov. Scott will soon be forced to reckon with their choice to close more businesses than average. Closed businesses mean less money for the core of government functions and legislators’ pet projects. Perhaps if legislators are forced to give up those projects, they will begin to respect the Engine of the Vermont Economy more the next time around: Vermont Business.

View the Business Response Survey here: bls.gov/brs/2020-results.htm

David Flemming is a policy analyst at the Ethan Allen Institute.

Reactions

Please check your e-mail for a link to activate your account.

Enter Comment Here:

  • Christian Matthews Matthews
    commented 2021-01-10 05:37:02 -0500
    Unfortunately the BLS "2020 Business Response Survey” does not include how long businesses were actually closed for. We also don’t have the number of businesses that have permanently closed due to government-mandated closures.

    According to the latest Statistics of US Businesses from 2017, these six New England states have a similar percent distribution of businesses by industry type (https://www2.census.gov/programs-surveys/susb/tables/2017/state_naicssector_2017.xlsx). Because of this, while the data is a few years old, Vermont’s higher percentage of establishments that experienced a government-mandated closure is most likely not because Vermont’s businesses are disproportionately located in industries affected by government-mandated closures. Indeed, it looks like Vermont enacted broader government-mandated closures. Whenever 2020 data is published we will be able to confirm this.

    Where it gets interesting is looking at unemployment. In Table C (https://www.bls.gov/news.release/laus.nr0.htm) you can see from November 2019 to November 2020 (preliminary) that not only does Vermont have the lowest unemployment rate in the country with 3.1%, but that the increase from 2019 of 0.7% was also the lowest in the country.

    In sum, I think the rebound statement in paragraph one is premature without taking into account the additional closure information and the unemployment data. Additionally, the last paragraph posits that “Vermont’s budgetary black hole” is a result of the “choice to close more businesses than average”. However, the actual comparison of “Vermont’s budgetary black hole” to other states’ and comparing this to each state’s percentage of establishments that experienced a government-mandated closure was never done.
  • David Flemming
    published this page in EAI Blog 2021-01-04 12:34:01 -0500