Currently viewing the category: "Employment"

I find it interesting and frustrating when I hear news reporters talking or writing about employment. I suppose in fairness to them I have to admit it is difficult to talk about something as complicated as any sector of economics when the best most journalists have studied is one or two semesters of introductory economics. That is why most professional journals only hire writers who have studied, actually majored in the field they are writing about. That is an economic journal hires those who have studied economics and science journals are written by journalist with some kind of science major.

After all, I would have a difficult time writing about nuclear physics. Of course I wouldn’t try either, and sometimes such as when the government releases the monthly employment report that is “news” and people do want to know if unemployment increased or decreased over the past month.

So, I better be careful and not make any errors when discussing this report.

And here is the type of thing I am talking about. As we began to get deeper and deeper into this most recent economic contraction which society likes to call the Great Recession the increase in unemployment begin to slow down. Many begin to write that we were moving into a recovery. It took those who knew how unemployment counting works to point out that after people have been out of work long enough that they no longer could collect unemployment benefits many simply quit looking for work. Guess what? Those people are no longer officially unemployed. They are simply out there lost in the great statistical world. So, while the announced unemployment rate might have been reported as 9.8 percent the real rate when those no longer counted are included might have been greater than 12 percent, and those more than 2 percent additional were even more hungry than the 9.8 percent.

Beyond the personal problems of those who are not even receiving minimal help, we have to realize that makes the economic activity for the entire economy even worse than what is reported.

How much would take too much room to write about here. Just realize that because this recession has lasted longer than most it really meant that the problems were even greater and deeper than it has been in most recessions.

Of the four states I report on it is certainly Minnesota where this was the most important because it is by far the most industrial state of the four and has the largest percentage and numbers of people who moved into that nether land.

Another situation I would like to expand on is to discuss both the unemployment rate and the numbers of people employed. That is because most assume that if they hear that unemployment dropped a percent they think they can figure that out by comparing the difference in the two employment figures.

In fact, because of what I wrote about above and also because the employed figure changes can be influenced by both immigration and emigration. The history of North Dakota, especially over the past 20 years or so is a very good example of this.

North Dakota never has had a very high rate of unemployment over the past 40 to 50 years. It is not that as farming became more and more mechanized and there were not only fewer farmers but also fewer jobs in all those small towns around the state, and yet the state always had a relatively low unemployment rate. How come?

It is because unless there were severe losses of job opportunities around the nation that North Dakotans were told to move to where the jobs were, or at least should be. That was in other states. Especially Minnesota or Colorado, but even California, or Georgia, or Washington, or where ever the industrial growth was happening.

Now in the more recent past as the economy around the nation has changed the opposite has occurred. That is, North Dakota’s unemployment rate has improved, but really the percentage is not very much. For instance, we brag about it being the lowest in the nation at 2.4 percent in May of this year, but in May 2000 it was 2.6 percent. Of course in May 2010 it had increased to 3.3 percent before we really started to grow from the oil boom.

But this is what counts, from May 2000 to May 2014 the number of employed people in North Dakota had increased by nearly 20 percent. That is huge. That could come about only by people moving into the state.

Minnesota, which brags about having the lowest unemployment rate of any major MSA in Minneapolis/St. Paul barely increased the number of jobs over that same 14 year period by 5 percent.

South Dakota and Montana were both twice the percentage growth of Minnesota, but still barely over one-half of North Dakota. The United States was in the category of only about 40 percent of the growth compared of North Dakota.

All that being said, North Dakota still has the fewest number of employed people, and by quite a bit even compared to South Dakota.

So, which is the best state? Depends on your interpretation. Not so crowded in North Dakota. But not all the opportunities all around the state like Minnesota, or even South Dakota.

 

There is not much to say about this months employment/unemployment table except that all of the northern plains is in relatively good shape.

When I say in relatively good shape the Minnesota unemployment rate has a lot of room for improvement, but compared to much of the nation their unemployment rate is a good improvement over the past three years.

South Dakota, although not as good as their sister state of North Dakota, has a significant improvement over the past few years and usually ranks among the best in the nation. So too Montana, and the oil county I show (Richland) looks like North Dakota.

North Dakota, because of the continuing oil development, remains the best state in the northern plains and the nation in terms of the unemployment rate and the increase in jobs.

That is not just a decrease in unemployment, but a real increase in the number of people working in the state. The other factor different than in most states is that North Dakota continues to have an increase in the average disposable income per capita.

Most states that are back to having the same number of jobs as there was before this recession find that the recovered jobs are paid at a lower rate than the jobs that were lost. In North Dakota, driven by the high wages in the oil patch, essentially all jobs have increased in remuneration. It is probably only those retired on not much more than social security payments whose standard of living has declined. The rest of the population is well ahead from a decade ago.

 

If you read the national and regional news there isn’t much I can add here for the employment report for the northern plains. Well, some detail that most readers probably know, but just to emphasize here it is:

North Dakota is still growing. There is some growth that is explainable, but I am not sure about some of it. For instance, the growth in Fargo, the size of the growth is a little hard to understand compared to the rest of the country. The only thing I would say is that town is continuing to be the Twin Cities furthest northwest suburban area and Minnesota, especially the Twin Cities metropolitan area, and more, has had good growth the past year. I think Fargo and Sioux Falls are benefiting from that growth. Good for North Dakota.

Good for South Dakota, too. Probably it is more accurate to say even “gooder” for South Dakota. Unlike North Dakota, South Dakota doesn’t have those four bigger towns and then a few medium size. Instead, it has one big town (Sioux Falls) and then several bigger towns that have significant economies.

Of course South Dakota doesn’t have the oil boom economy and its growth hasn’t been as dramatic as North Dakota’s, but it has had a good recovery and it shows with the good unemployment rates in those “bigger small towns”.

While the wild growth days of the oil boom in North Dakota is gone (as planned for), but there is still plenty of growth left. There are suppose to be 25,000 plus unfilled jobs still in the state. What happens this fall could create a change if voters take an anti-growth attitude. It will be interesting to see what happens and could give journalist a lot to write about for the next two years. As for me, I don’t expect that, at least to any significant degree.

In the meantime, here is the report for this month, and as I said about the state revenues report last week: “Second verse, same as the first, a little bit….

 

Last year, 2013, the Grand Forks city building permit dollar value totaled just over $212 million. That was a record for the city. This year to date, that is January through April totaled nearly $79 million while in that record last year in the same time period the amount was not quite $24 million. That is, through April the amount is over three times last years figure at the same time.

Now with so many projects already started there is probable fewer projects that the contractors have the time to enter into yet this year, plus we don’t know what the weather holds for us. Still…? Imagine, especially if local contractors can get more help, or if contractors come in to Grand Forks to bid on contracts what this would do for the years totals.

True East Grand Forks is down by about 20 percent, but that was higher than normal last year because of one large commercial project. This year there is nothing there. That is what happens with one project in a small town. East Grand Forks building has been what we should expect as an average on a year to year basis.

Anyway, this is great for Grand Forks, and really the entire metro area. Things like this can go a long way towards making up for the lack of Canadian trade. I think we have a good year coming, or really already started, here in Grand Forks.

 

Well, the northern plains remain what is probably the best area of the country as far as unemployment being a problem is concerned.

Of course when I say that North Dakota remains the best as far as a low unemployment rate. Mostly that is because of the continuing oil expansion. It also has been because a great agricultural period that is now starting to slow down, significantly.

Minnesota has had one of the best employment improvements compared to most of the other states. Their state budget surplus is great and their unemployment rate is among the best in the U.S. South Dakota and Montana are really a little of each.

One thing about the farm states in the past is that when there were not jobs available you simply packed up and moved on to where there were jobs. Of course there were jobs in those other places then. Today, probably not, so when it is time to move on from Jamestown or Devils Lake will there be any place to go? Maybe to a limited degree Fargo and even Grand Forks for the industrial jobs. Maybe Williston, Minot, Dickinson and other towns in the Patch if there still is a demand out there at that time. Otherwise in a generation or two we will become just another state of unemployment.

In the meantime, here we are, still in the good times. North Dakota continues to lead the way in employment growth, personal income, and tax