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

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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

Rank
Period
% Increase
1
December 2008 - January 2009
27.3
2
March - April 1997
14.3
3
April - May 1976
12.5
3
April - May 1997
12.5
5
February - March 1998
11.5
6
March - April 1980
11.4
7
May - June 1980
10.4
8
November - December 2001
10.3
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

Rank
Period
% Increase
1
July 1979 - July 1980
55.6
2
August 1979 - August 1980
52.8
3
March 1976 - March 1977
45.5
4
September 1979 - September 1980
44.7
5
April 1976 - April 1977
43.8
6
June 1979 - June 1980
43.2
7
January 1976 - January 1977
40.6
7
February 1976 - February 1977
40.6
9
January 2008 - January 2009
40.0
10
November 1981 - November 1982
37.8
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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73 Months and Counting

January's preliminary Bureau of Labor Statistics numbers show Minnesota's unemployment rate of 3.7 percent was once again lower than Wisconsin's 5.0 percent. That marks the 73rd consecutive month in which Minnesota has boasted a lower jobless rate than its neighbor to the east dating back to January 2009 including each of the last 67 months by at least one point. The Gopher State has now edged Wisconsin in the employment border battle for 204 of the last 216 months dating back to February 1997. Wisconsin only managed a lower unemployment rate than Minnesota for the 12 months of 2008 during this 18-year span.


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