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North Dakota’s economic boom draws Minnesotans

Betsy Sundquist//September 28, 2009//

North Dakota’s economic boom draws Minnesotans

Betsy Sundquist//September 28, 2009//

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You know all those jokes that Minnesotans have made for years about North Dakota?

North Dakota is exacting its revenge.

As Minnesota, along with most of the rest of the country, struggles with high unemployment rates, massive budget deficits and a generally sluggish economy, North Dakota sits with its $1.2 billion budget surplus and a (figurative) smug look on its face, attracting job seekers from all over the country.

The numbers tell the story:

• In the last year, 3,269 Minnesotans visited the North Dakota Department of Commerce’s relocation program website, (The relocation program helps job seekers from all over the country with job searches and relocation assistance.)

• During Experience North Dakota’s first year of operation, between July 2008 and July 2009, 132 Minnesotans registered with the program.

• According to the North Dakota State Data Center in Fargo, 10,170 new tax filers — people with new North Dakota jobs — moved into the state in 2007 and filed taxes in 2008, and 34 percent of them had moved there from Minnesota.

• In 2008, 2,318 Minnesota residents who registered on the Job Service North Dakota website earned wages in North Dakota in subsequent quarters.

“We’re a magnet,” Richard Rathge, North Dakota’s state demographer, says. “And we’re enjoying that while the economy is still robust.”

While Minnesota struggles with an 8 percent unemployment rate (as of August, the latest number available), North Dakota is at the top of the heap when it comes to residents with jobs, ranking above all other states for August with 4.3 percent unemployment. (The national unemployment rate in August was 9.7 percent.)

And North Dakota has energy development to thank for its ongoing good fortunes.

“The energy development activity, especially in the western part of the state, has a significant impact on economic opportunities,” Rathge says. “And those carry with them some very good jobs in terms of earnings.

“That’s having a significant draw, especially from the region, where the economy isn’t as robust as other states.”

North Dakota has become the fifth-largest oil producer in the nation. Couple that with massive coal reserves in the western part of the state — and an abundance of wind, the latest energy source to be tapped by the state — and you have a pretty good explanation for North Dakota’s robust economy in the face of gloom almost everywhere else.

“They’re doing very innovative work with energy development activities and have been successful in finding bigger oil fields, so that opportunity is expanding,” Rathge says. “That, along with the global economy, suggests that the need for fossil fuels isn’t going to decline anytime soon.

“Barring some unnatural event, such as the oil embargo days in the 1970s and early 1980s, [North Dakota’s] economy should stay robust for the foreseeable future.”

A new study by moving company Mayflower Transit ranked North Dakota one of the top five U.S. destinations (along with West Virginia, Rhode Island, Kansas and Montana), with 8.5 percent more “inbound moves” (people moving to the state) in the first eight months of 2009 than for the same period a year earlier.

At the same time, the Mayflower study ranked Minnesota first in destinations that are decreasing in popularity (ahead of Washington, Utah, Mississippi and Nevada), with 8.3 percent more residents leaving the state in the first eight months of 2009 than the same period in 2008.

The study found that in 2009, only 20 percent of Mayflower customer moves were for personal or health-related reasons; the remaining 80 percent were job-related, including 37 percent for new jobs, 16 percent for company transfers and 26 percent because of retirement.

Rathge points out that when you look at the number of people moving to North Dakota because North Dakota has jobs, you need to consider population figures: North Dakota’s current population is about 640,000, while Minnesota’s is 5.2 million.

“If you compare our population change with Minnesota’s, for example, we’re a much smaller populated state,” he says. “So the impact of a number of families moving into our state will be much more visible here than it would be in Minnesota.”

There is, however, at least one cautionary tale in all this sudden elevation of North Dakota as a paragon of economic stability.

Earlier this month, Democratic New Jersey Gov. Jon Corzine, currently locked in an ugly re-election battle with Republican challenger Chris Christie, dismissed a group of unemployed New Jerseyans with a flippant remark: “If you want … a real low unemployment rate, go to North Dakota.”

That political misstep has cost Corzine percentage points in the polls and has subjected him to ridicule and criticism. “One thing is clear,” Christie’s campaign proclaimed. “Come November, Jon Corzine will be the one moving to North Dakota in search of a new job.”

The moral: Make fun of North Dakota at your peril, because one way or another, it will come back to haunt you.

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