High-tech firm leaves Vermont because it’s just too nice a place

The news of a local employer leaving our green and pleasant land is, I’m sure, warming the cockles of conservative hearts. Huber + Suhner, a Swiss-owned manufacturer of radio frequency cables (well, somebody has to do it), will leave its current location in Essex Junction, and move its assembly operations to New Jersey and its management offices to North Carolina.

H+S employs 63 people, so it’s not exactly an IBM situation. But I’m sure the likes of El Jefe General John McLaughry and Vermont’s Loudest Economist Art Woolf are already drafting their opinion pieces: See, Vermont is business-unfriendly! We’re chasing good employers away!

And at first glance, it looks like they have a point:

“Obviously, the cost of doing business here and the tax perspective is a significant reason why we’re moving,” [H+S President Andy] Hollywood said. “For the most part, (North Carolina) is a lower overall tax implication to the company.”

“AHA!!!” comes the cry, rolling down from the Ethan Allen Institute and the Republican leadership. But wait, there’s more:

A spokesman for the firm, Joe Choquette of the Burlington-based law firm Downs Rachlin Martin, said that lower real estate prices in North Carolina contribute greatly to reduced property tax liabilities.

Huh. Well. So North Carolina’s “lower overall tax implication” has more to do with property values than tax rates. In other words, land in Vermont (and particularly in the Burlington area) is much more valuable than land in North Carolina.

Darn! Vermont’s just too nice!

The company also cited a bunch of other reasons that have nothing to do with Vermont’s tax or regulatory environment, like a shortage of qualified administrative applicants (an argument for boosting education, not cutting government), better and more numerous transportation options (not much we can do about that), and a “competitive salary environment.” In other words, in North Carolina we can pay peanuts and get away with it.  

So, when the business types and conservatives start howling about Shumlin “losing another employer,” just remember that they’re only telling the part of the story that fits their preconceived narrative.  

33 thoughts on “High-tech firm leaves Vermont because it’s just too nice a place

  1. One of the issues H+S states why they are leaving VT is:

    “Hollywood also reflected on growing difficulty filling administrative positions, saying the number of qualified applicants for open positions has declined in the past five years. That’s been particularly true for positions outside of manufacturing, such as human resources, finance, customer service and some engineering positions, he said.

    Choquette indicated that a wider workforce in North Carolina would improve hiring options.

    With about 775,000 people, Charlotte’s population exceeds that of the entire state of Vermont by nearly 150,000, according to 2012 U.S. Census estimates.”

    It should be noted that as of August 2013, unemployment rates are as follows in states mentioned:

    Vermont: 4.6%

    North Carolina: 8.7%

    New Jersey: 8.5%

    VT’s unemployment is much better than the other two states, which is good,  but there is a downside to that. Some theorize that when unemployment is below 4%, those people  are “unemployable.” This can be for a variety of reasons such as they are not qualified because they lack the  particular skills sets necessary for employment, or do not have the physical or mental capacity to do the job.

    Many employers try to get around this by recruiting people from out of state but many are reluctant to come to VT because if their job falls through, it will be difficult to find another similar job, with similar pay, in VT.  In additon, the cost to move, buy a home here, cost of living, etc., can be higher than most other states. It can be a gamble for people to relocate to VT.

    Clearly NC and NJ have much larger populations and thus a far larger labor pool to choose new employers.  Like the transportation issues that you say there is not much VT can do anything about, VT is hard pressed to snap its fingers and boost its population.  

    I believe the points that I have raised go to the heart of the employment/hiring issues.  Your stated conclusion that “…in NC we can pay peanuts” is a bit of an oversimplification of the issue at hand.  The fact is , the labor pool is far more competetive is other states than in Vermont.  That is a cold hard fact.

  2. As noted, the article said that the company has had difficulties filling administrative jobs. A larger applicant pool and a higher unemployment rate should help, but there is one more factor not yet discussed here.

    That is, wages. Some assume wages are lower in NC, but a comparison of salaries between the Charlotte, NC and Burlington, VT metropolitan areas shows just the opposite. For managers (marketing, sales, financial, HR, etc.), the median annual salaries are higher in Charlotte; in some cases quite a bit (data from BLS 2012 Occupational Employment & Wage Survey).

    Economic theory (and common sense) tells us that if the company offered higher wages in VT, it would likely attract more applicants. Unfortunately, we don’t know what the salaries are at this particular company.

  3. Search terms:

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    – Sr. Software Engineer / Developer / Programmer

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    Country: United States | Currency: USD | Updated: 25 Oct 2013 | Individuals Reporting: 10,030

  4. New Jersey Manufacturing Technician I Salaries

    Within New Jersey there is a lot of variation in Manufacturing Technician I Salaries.

    These variations depend on on a wide range of factors from population to general competitiveness in the market. Below is a map displaying a few key cities in New Jersey and surrounding states, click on any one to find Manufacturing Technician I Salaries for that area.

    Source: HR Reported data as of October 2013

    Not mentioned directly is the fact that there is a widely ranging socioeconomic status, primarily in different areas of the state — Princeton ain’t Camden.

    A wide range of clickabe resources is included within the results — makes accurate search/navigation easier:

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  5. in Vermont, too.  One bedrooms in Charlotte NC can be had for $500.  Studios in Burlington run twice that.  

    Off the grid, high COL, gloom and snow are not for everyone.  And, If you are an engineer with a specialty there is usually just one game in town for you if you take the plunge and go to Vermont.

    Having run high-tech consultancy businesses and wireless infrastructure businesses in the past, I attended some of the various high-tech forums and meetings in Burlington.  Despite Vermont’s alleged progressivism, I was struck by the paternalistic attitude of many of the employers there, which in many ways is a good thing, but in many ways not.  Places like Dealer.com require you to drink a whole lotta Kool-aid, and with paternalistic employers, several hours over-time per week is just you being a good grateful child/employee.

    Burlington is a lifestyle that I miss sometimes (February not being one of them), but I especially wouldn’t want the unhappiness of dealing with a lousy supervisor or capricious management and having to hang on by my fingernails because I’ve tied my life to an area with no other jobs.  

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