Of course growing income inequality and the shrinking middle class have been in the headlines for a couple years but surprisingly Wisconsin and Vermont find themselves sharing a common economic trait. The middle class in Vermont and Wisconsin is declining at one of the fastest rates in the nation.
Gov.of Wisconsin Scott Walker (the man blogger Charlie Pierce accurately tags the goggle-eyed homunculus now employed as the assistant director of employee relations at the subsidiary of Koch Industries once known as the state of Wisconsin) and Gov. Peter Shumlin are both in charge of states with rapidly declining middle class.
The states with the most extreme middle-class shrinkage are Wisconsin — where the share of households that are middle class fell from 54.6 percent in 2000 to 48.9 percent in 2013 — Vermont, Ohio and North Dakota. The state that fared the best was Wyoming, where the middle class only fell from 51.5 percent of the population to 51.2 percent.
Here is a map [interactive version] that PEW’s Stateline blog put together which shows the percentage rate of middle class shrinkage in all 50 states. [Those making between 67 percent and 200 percent of the state’s median income are considered middle class for the purpose of the map.] 
In Wisconsin Governor Walker’s assault on the middle class includes going after wages, benefits and bargaining rights of state union employees. Maybe he’s not yet in Wisconsin’s league, but Governor Shumlin is similarly playing hardball with middle class employee union workers — leveraging more than 300 union layoffs for re-opening existing contract agreements and refusing to consider upper-income tax increases.
As more people slip-slide away from the middle class, high-end income earners in Vermont (and probably in Wisconsin too) continue to do just fine. Vermont was one of 33 states in which the top one percent captured between half and all income growth between 2009 and 2011.
It seems Shumlin’s budgetary triangulation has placed him on Scott Walker’s conservative tangent. Maybe Shumlin is wrong getting so comfortable on a “right” triangle.
The fact is, in a state that aspires to a high quality of life but has an exceptionally small population, the proportion of individuals who will find themselves on the public payroll in order to deliver that quality of life to residents will be much greater than in larger states that provide the same services to a much larger population.
Therefore, when Vermont slashes public service jobs, it cuts to the heart of our middle class while at the same time endangering the quality of life that attracts people to the state and its brand.