Unemployment USA: Moving America To North Dakota

Millions of out of work Americans may wish that they lived in North Dakota, no matter how harsh the winters can be. The state had an unemployment rate of only 4.2% compared with the 9.5% national figure. It is easy to dismiss the North Dakota job success as a by-product of the state’s low population, but unemployment in Rhode Island is 12.4% and in Oregon it’s 12.2%. Michigan and California do not have a monopoly on hard times.

North Dakota has a job base that makes it a rational template for what the Administration views as the future of the American economy. The July report on jobs from the President’s Council of Economic Advisers said that the great portion of employment growth between 2008 and 2016 would be in the health care industry. The analysis projected that over three-quarters of the jobs added in the economy during that period would be in hospitals and nursing homes and among doctors, nurses, dentists, and other health care providers.

A large number of the biggest employers in North Dakota are health care companies. MeritCare in Fargo is the largest with a total of 6,400 workers. Ten of the twelve largest employers in the state are hospital groups, clinics, hospitals, or benefits firms. The other two on the list are North Dakota State University and the University of North Dakota. The workers at those institutions are employed by the state.

The Council predicts that construction employment will rebound strongly in the next decade. The largest employer in North Dakota that is not in the health care or higher education business is Bobcat, which makes small loaders, excavators, and industrial vehicles all of which are used at some construction sites. Another of the large employers is LM Glasfiber, which makes wind power infrastructure components. Infrastructure investment is one of the more prominent goals of the stimulus package. The high tech disk company Imation is among the top twenty-five employers in the state. This list is rounded out by Nabors, which makes drilling equipment for geothermal, gas, and oil exploration and production.

North Dakota, with only 640,000 people, is as close as a state can come to being a perfect picture of what the federal government believes that the future of employment will be.

The population of North Dakota is homogeneous. Almost ninety-two percent of the people living there are white. Less than 2% are Hispanic and only 1% is Black. That should only matter if the Council of Economic Advisers believes that the jobs recovery will only be among white Americans, which is not the case.

The largest single difference, aside from the racial composition of the North Dakota population, between the statistics about the people living in the state and the people in the balance of the country is household income. The national number is $50,740. North Dakota’s figure is $43,936. The state’s unemployment may be low, but so is the average income, and, presumably, so is the cost of living.

North Dakota is a picture of the good and the bad of the future of employment in the US, if the Administration’s forecast about the growth and composition of the work force is right. The Council is not projecting huge increases in the number of manufacturing jobs or jobs in the financial sectors.  National unemployment is close to 10% so the odds are that new jobs that replace the old jobs will not pay as well.  The best paying manufacturing jobs in the US may be gone forever. Medical and health care jobs may only pay modest wages, at least among workers who are not doctors or other professionals. The Council expects improvement in construction jobs, but this industry is not at the top of the national pay scale as a number of service and financial sectors are. The balance of the significant job growth the Administration expected between now and 2016 in is the restaurant and bars sector. There are a limited number of six figure salary jobs in those businesses.

North Dakota may be a job utopia of sorts. Health care and government work support a great deal of the state’s population. Everyone works, no one makes much. For those who can live through the winters, the air and water are clean.

Douglas A. McIntyre