• Molly Walsh
• Ethan Bechtel

Ethan Bechtel sank into a caramel-colored leather chair in his Burlington office. He wore a flannel shirt, jeans and fashionable stubble as he explained why he chose Vermont as the home base for his mobile app startup, OhMD.

Bechtel, 34, is the sort of entrepreneur economists and politicians want to attract to Vermont. Many of them, including Gov. Phil Scott, bemoan the state's stagnant population and wring their hands about the need for more young workers.

Bechtel, who grew up in Shelburne and graduated from the University of Vermont, launched his company in New York City. He moved back with the business in 2015 to satisfy his craving for the outdoors and to escape Manhattan, which was wearing thin. "It's nothing like Vermont — no skiing, no lake," he said.

Bechtel wants to stay. "I think if you understand what Vermont is, and you're that type of person, then it's an amazing place to land."

Convincing people who leave to come back — and to bring their friends — must be a priority, Scott suggested to lawmakers during his January 23 budget address.

"A shrinking workforce creates a downward spiral. With fewer workers we have less revenue, and the state becomes less and less affordable ... We must act now," the newly-installed Republican governor proclaimed.

He echoed a January Vermont Chamber of Commerce report that said the state should add 10,000 people to the workforce annually for the next two decades.

Vermont's population dirge is an old and familiar tune. Wyoming is the only state with fewer people than Vermont. At various times in the state's history, political leaders have pushed for population growth. In the 1890s, after a steady influx of Catholic immigrants from Ireland and Québec, the state agriculture commissioner recruited Protestants — primarily Swedes — to revive abandoned Vermont farms.

A few came, but not hordes. Population growth was modest continuing well into the 1900s. A back-to-the-landers surge in the 1960s and 1970s brought many flatlanders from more crowded states.

And now? Vermont's population dropped two-tenths of a percent between 2010 and 2016, from 625,745 to 624,594, according to the U.S. Census Bureau's latest estimates.

That's a dip, not a plunge. But it's compounded by uneven shifts: The population is growing in Chittenden County, Vermont's economic engine. Yet it's shrinking in many more rural reaches of the state, from Rutland County in the south to Essex County in the north.

There are consequences. Home values are appreciating in Chittenden County, where the average home sale price rose from $247,000 in 2010 to $270,000 in 2015. During the same period, values in Rutland County dropped from $148,000 to $140,000, according to the Vermont Housing Finance Agency.

And while school enrollment has been declining statewide for 20 years, the trend is often felt most acutely in small towns such as Proctor, near Rutland. The town's marble curbs and sidewalks speak of its history as a quarrying center that once attracted many immigrants. These days, new arrivals are few and so are children. Last year, the senior class at Proctor Junior/Senior School had just 18 students, down from 42 in 2003.

Vermont has one of the lowest birth rates in the nation and plenty of baby boomers heading into retirement. These trends have some businesspeople and economists worrying that the state's workforce could shrink.

There's disagreement on the gravity of the problem.

"The demographics right now are operating in a direction that isn't helpful," said Jeff Carr, who has long forecasted revenues for the state as president of Economic & Policy Resources, a private consulting firm in Williston. "It's a big lift to reverse these trends," he said.

David Bradbury, president of the Vermont Center for Emerging Technologies, which funds startups and oversees coworking spaces, is also worried.

"I do think population decrease is a problem, and what causes that is really the issue. I think it is an issue of affordability," Bradbury said, pointing to the cost of housing in particular.

Generally accepted economic theory views population decline as a brake on the economy, explained Matthew Barewicz, an economist with the Vermont Department of Labor.

"The fewer people you have promoting and encouraging economic activity, the less of it there's going to be," he said.

But traditional models often don't take into account indicators such as happiness, Barewicz noted. And more than a few Vermonters might view population decline with a smile if it means fewer traffic jams and shorter lines at the grocery store.

Paul Cillo, president and executive director of the nonprofit Public Assets Institute, a think tank based in Montpelier, is concerned, but not alarmed, about the population trends.

"I don't think population decline is a good thing in general," Cillo said. But the bigger conversation is about the nuances within the trend, he added.

Almost everyone who talks about the issue produces data — some solid, some not. For example, there's the not-so-scientific study by United Van Lines, a moving company that reported that in 2016, Vermont was second in the nation for most move ins (67 percent) compared to move outs (33 percent).

The problem: It's a survey of United Van Lines customers only, not a representative sample of the Vermont population. The survey was based on just 277 moves for Vermont, when thousands of people came and went.

In-depth studies paint a different picture. Carr, who presented the state revenue forecast for 2017 to 2019 to legislators last month, noted in the report the "obvious concern" associated with the possibility that recent declines in Vermont's population might continue. That "could limit the ability of the state's labor force to grow — to the long-term detriment" of Vermont's future economic growth, Carr's report states.

Vermont's low unemployment rate — 3.1 percent in December — means some companies already can't find workers, and that's bad news, Carr said.

"If you don't have people that are available to take the jobs that are needed by the economy ... the potential performance of the economy goes down," he said.

Public Asset's studies, using Internal Revenue Service data, show that during the last two decades, about 15,000 to 16,000 people have come and gone from Vermont every year — with a few more going than coming in recent years. People who move in tend to earn more than people who move out, the data show.

Some of the movement, or "churn," could be related to economic factors, including the cost of housing, childcare and availability of high-paying jobs, Cillo speculated. But some of it is also people being young and restless.

Still, thousands of people move to Vermont. State leaders should pay attention to the reasons why, with the hope of expanding that pool, said Cillo.

"It's still a significant number of people that are choosing Vermont. I think that's important because they could supposedly choose any place, and they choose to be here," he said.

Take Matthew Gardner. The 23-year-old left New Jersey to attend the University of Vermont and stayed. He graduated with an engineering degree in 2015 and said he is already earning $50,000 a year at an engineering firm in Williston.

The outdoors is a big draw, and winter weekends often find him riding a chairlift. He's already notched 20 days on his season pass to Stowe Mountain Resort. His girlfriend, a UVM grad from Baltimore, lives in Burlington, and they join a pack of friends on weekend adventures. "Skiing and snowboarding and mountain biking, rock climbing, ice climbing," Gardner said. "We kind of all do those things together."

His shared Burlington apartment costs him $650 a month — less than it would be in many big cities, Gardner said — and it's close to the Winooski line, so he can walk to that city's bars and restaurants.

Bechtel found a similar bargain when seeking space for his small company. It's a VCET coworking office space on Burlington's Main Street in the FairPoint Communications building. Despite a drab exterior, the building's third floor is a hip space with a Silicon Valley vibe: cowhide rugs, shag-carpet pillow covers, funky glass light fixtures, cartoon wallpaper and a green ping-pong surface that doubles as a conference room table.

The rent is $100 a month per person. "This place is amazing; it's a steal," said Bechtel.

His company is small, with 4.5 full-time positions including his. Two employees work remotely — one in Dallas and one in Brooklyn.

Bechtel's goal is to gradually expand the business, which sells secure mobile texting services to doctors and health care professionals who must comply with privacy laws governing patient information.

Bechtel wishes it were easier to find programmers, he said. He suggested Vermont leaders should do more to get college students into internships or "co-op" work before they graduate. "There's plenty of students around," Bechtel said. "The thing is, are they equipped with the skillset they need to help a growing tech company?"

VCET launched the coworking space with help from UVM and other organizations. Dozens of people work there, including remote employees for Twitter and Google and online gaming entrepreneurs such as Marguerite Dibble.

Dibble, 26, grew up in southern Vermont's tiny Landgrove, graduated from Champlain College and launched her company, GameTheory, shortly afterward. Today she has seven employees.

She hired three people from the same Champlain College computer gaming program she completed. Many other local tech CEOs struggle to find the right talent, Dibble said, but so far she's managed.

Sometimes, she loses a worker — often because his or her partner gets a better job elsewhere, be it Boulder or Austin.

"There's just more [population] density. You can get higher salaries, faster growth, horizontally and vertically," Dibble said. "There's just more opportunities where there's more people."

For her, Vermont has its own appeal. After work, Dibble often goes home to Starksboro and unwinds with a walk in the woods. She said the scale and beauty of Vermont should be front and center in any campaign to recruit more people to the state.

She said, "I think Vermont really needs to own its own identity."