Heading (North) West, Young Man? Not So Fast, Minnesota

What with Minnesota’s unemployment rate and per capita 2010 budget deficit the largest in the entire Upper Midwestern region, one wonders if Gopher State residents will soon look to the purportedly thriving Dakotas to find economic shelter during these trying times.

North Dakota’s booming oil business received a lot of ink last year when the price of a gallon of gas flirted with $4, and South Dakota was the public relations beneficiary of TCF Financial’s recent decision to relocate the bank’s headquarters from the Twin Cities to Sioux Falls – taking advantage of what the company views as the Mount Rushmore State’s more favorable lending regulations and tax-friendly environment.

But before you pack your Minnesota Twins duffle bag and head out West, Dakota-bound, be aware that both of the Gopher State’s western neighbors are also suffering through some of the worst economic news they have experienced in generations.

Smart Politics recently documented how South Dakota, like Minnesota, is also in the midst of its worst short-term (1-month) and medium-term (1-year) jobs crisis.

Today, a news story circulated how a corporate computer customer call center in Minot, North Dakota was closing because it cannot find enough workers to hire.

“So few people applied for the Minot jobs that the Tampa-headquartered company will have to close the call center on May 10 — a cutback by Sykes that will result in 200 people losing their jobs.”

The narrative of the story was that North Dakota was largely bucking the national economic trend with a fiscally strong state government, a strong economy, and low unemployment. While it is true the State is not experiencing state budget deficits, North Dakota is, in fact, experiencing record job loss rates.

From December 2008 to January 2009 North Dakota experienced its largest seasonally adjusted month-to-month proportional jobless increase on record. At a rise of 27.3 percent (from 3.3 to 4.2 percent), the monthly jump in unemployment nearly doubled the next largest increase (14.3 percent, from March to April 1997). Only 8 of the past 397 months dating back to 1976 have witnessed a double-digit month-to-month proportional increase.

Largest Monthly Proportional Increase in North Dakota Unemployment Rate, 1976-2009

Note: table compiled by Smart Politics with data from the Bureau of Labor Statistics, U.S. Department of Labor.

North Dakota is also in the midst of one of its top 10 worst year-to-year increases in unemployment. The 40.0 percent rise in jobless claims from January 2008 to January 2009 is the 9th worst in state history. (The worst being from July 1979 to July 1980 when there was a net increase in unemployment of 2.0 points, rising 55.6 percent over one year, from 3.6 to 5.6 percent).

Largest Proportional 12-Month Jobless Increase in North Dakota, 1976-2009

Note: table compiled by Smart Politics with data from Bureau of Labor Statistics, U.S. Department of Labor.

And while it is true that the Peace Garden State’s January unemployment numbers are 3.4 percentage points less than the national average of 7.6 percent, this only ranks as the 37th largest difference on record. Moreover, the difference is shrinking – North Dakota’s December 2008 unemployment rate of 3.3 percent was 3.9 percentage points less than the national average of 7.2 percent – good for the 13th largest difference in state history.

Finally, before packing that bag, take heed of the parting shot left by the news article on Minot’s inability to field enough applicants at the Sykes call center:

“Parts of North Dakota, including the northwest where Minot, a city of about 40,000, is located, can be as cold as Alaska during winter months.”

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