Currently viewing the category: "Unemployment"

Two days ago I posted the June 2014 employment/unemployment data except South Dakota wasn’t available and I didn’t want to wait. South Dakota released their data today so I have completed the tables.

They are in the posting just below this one. Of course North Dakota, Minnesota and Montana are the same.

As for South Dakota, it is time to say a little more. North Dakota has been written about again and again as the state with the best unemployment rate and the increase in jobs, as a percentage increase has been phenomenal.

However, as I always write, the devil is in the details, and the detail is this, considering South Dakota has no gift like oil in North Dakota their unemployment rate of 3.6 % compared to North Dakotas 3 percent, and Minnesota and Montana’s rates of 4.6% in both cases is impressive. They must be doing something right, and North Dakota and the other two states should pay close attention to what they have done through “The Great Recesssion”.

Also, I showed in a recent posting that North Dakota’s job numbers grew nearly 19 percent from 2000 to 2014. In South Dakota that percentage increase from 2000 to 2014 was over 9.5 percent, about one half of its’ sister state, but again bear in mine that there has been no oil boom there.

The nation should pay attention to North Dakota, but they should pay good and close attention from a business stand point to South Dakota. If the rest of the nation had been doing as South Dakota maybe they would have called these past years “The Sort of Slow Down”. If only…If only.

 

The South Dakota data is not available yet. I am going to post this and when I can add that data I will let you know.

As for the other state listed here, first North Dakota: Unemployment is up slightly as is expected at the beginning of the summer. That is because of all the college students looking for summer jobs. The interesting statistic is that there are 11,600 more people employed in June 2014 than in June 2013.

That is a good increase, but it does also show the maturing of the oil boom. The boom is still occurring as we can see by the number of drilling rigs, etc. However, the numbers have stabilized based on the people available to work the rigs, do the fracking, etc.

As I showed in my comparison posting last week the northern plains economy is improving. North Dakota is still the “best” economy, but the other states included (Minnesota, South Dakota, and Montana) are improving, and I think at rates better than the average around the nation.

So, just look at these and see that things in the plains are continuing as we expect. What I intend to show in the near future is that the new “Great Transformation” is continuing. That is, the new agriculture technology is continuing to empty the plains. Every acre will still be farm, in fact more intensely than it has in the recent past, but it will take fewer people, both on the farms and in the towns. In less than a quarter of a century we will not recognize the plains states.

At the start of the settlement of the plains the technology of the railroad meant a town every six miles. Before the middle of this century there will only be a town every fifty miles, or so. And that’s the truth.

 

All of the data you see here have been published in previous posts is some format. In some cases the dates have been changed. For instance, in the first table on the left the Employment data was published recently, but it covered from May 2000 to May of 2014. This posting is May 2013 compared to May 2014, a shorter time. I did that because most of the other postings were of that time. That is, covering one year only.

I wanted to be able to show my readers a similar time comparison involving the same cities. I have-sort of. As best I can, here is what happened over the past year in the larger towns in North Dakota. Of course that has to include Fargo as the largest town in the state, and it needs to include the changes coming about because of the oil boom, especially Williston and Dickinson.

It also should show what the larger farm towns outside of the oil patch are doing. As I expected, places like Jamestown, Wahpeton, and even Carrington, Langdon and Grafton, while jumping around based on the farm economy of the year demonstrate those dramatic changes occurring in farm technology.

That is. sometimes the economy in those towns goes up when the ag economy is good, but the population and employment continues down as the technology shows people are being replaced by machines-huge machines with huge price tags.

Agriculture is in a boom time, but unlike oil successful ag means fewer people. Fewer farmers, fewer service people for those fewer farmers. Service people mean fewer bankers, now called financial experts, and fewer mechanics, now called technicians. There maybe is only half the machinery dealers, but they are huge5 What cost maybe $120000 less than a decade ago cost $400,000 today. Then a good day the machine covered 120 a day. Today it is 250 acres in a day. The first sprayer I used had a boom width of less than 50 feet. Today with 1500 plus gallon tank the boom width is about 140 feet. Eight and one half rounds to cover a quarter section and taking time to fill only once with that 1500 gallons. Push a couple buttons and take your hands off the steering wheel. Fewer people, fewer farms. You have to look two miles to see the closes neighbor. That is the only way to make it work. No more 400 to 800 people towns, and the 4000 population town is now 1875 people. And the ride is just starting. Hold on.

So, look at these figures. We will get more specific over time, but this is our future. Every acre will still be farmed, more intense. but you won’t recognize the farm. There might not be anyone in the machine. They will be back in the control center watching the screen and reading all the gauges. Of course they won’t adjust the settings, that will be done automatically.

Imagine what North Dakota would look like if Harold Hamm hadn’t developed fracking. Imagine the wealth that would just be sitting in the rocks at 10000 feet below the surface. Where would the money have come from.

A Minnesota paper carried an article about the railroad union agreeing with the railroad company to allow “freight trains” in the near future to run with only one person. I assume that person would be the engineer, but maybe not. What do you call that person? What does our life become as I watch a science program about scientist in South America looking for that fish that will feed the world. What a terrible world with no Red River Valley potatoes. What a boring life that will be.

 

I know some don’t like it and it is not over yet; the increase in jobs in North Dakota I mean. Who does like the increase in crime, broken pipelines and the other negatives the western part of the state has put up with. On the other hand, remember, before this started a decade ago we were a poor state. People like the Poppers said we shouldn’t have been. Magazines like National Geographic sent a photographer out here to find an old farmstead with the front door of the farm home blowing in the wind. The eastern elite wanted to turn us into their playground.

Following several years of declines in the number of jobs in North Dakota, and in the states population the oil boom has finally turned that around. Now the elite in North Dakota are in Fargo. Their press, printed and electronic, write pontificating stories about farming and about energy development. Even the oil patches own write absurdities. One daily blamed a police failure of a major crime investigated by both the local and state police on the oil boom. Said there was just too much to do.

Some think that other areas of economic growth at least contributed to the increase, but I don’t think that is true. It may be that the increase in manufacturing, particularly ag manufacturing, and in certain areas like Microsoft and less well known computer software and hardware firms slowed the decrease down, but I don’t think any were large enough to make up for the decrease in farming population and the secondary jobs farming brought to small towns.

I am talking about all the small town lumber yards, hardware stores, machinery dealers and car and pickup dealerships now gone. Go to Grafton, Carrington, Lamoure, any little town outside of the oil patch. It is sad. And it is the truth.

On the other hand, in a half dozen or so shopping center towns there was some growth. Look at the table above, in the classification of city, of MSA, of MiSa (micropolitan statistical area), it was only Jamestown and Wahpeton which lost jobs, and population.

Then we do take the positive like growth in manufacturing and add it to the oil boom and North Dakota over the past four to six years has had an increase, a large increase, in the number of jobs and in population.

I won’t repeat the data, but just say that without the oil boom our job numbers would be down substantially over this time. I will also say that when the oil boom is built if something else, possibly another energy development doesn’t happen we will drop from our peak. However, we will still be larger than we were in 2000.

In the meantime, ain’t this great, or so I think.

 

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.