Compared to the national unemployment rate, North Dakota’s staggeringly low rate of 3.3 percent seems like a dream. While at first glance it seems like a utopia, it was really just a series of smart decisions and a dash of good luck. Good financial systems were put in place early in the state’s history, and due to the relatively low population, job competition is lesser than in other states. Contrary to popular belief, the largest industry in North Dakota is actually agriculture. Of course, finding a giant oil reserve never hurts.
The North Dakota Oil Boom
North Dakota experienced an explosion in the production of oil in the 1950s and has been coasting on that ever since. As of this writing, North Dakota is the second largest producer of oil in the United States, which is quite surprising for one of the states with the smallest populations. In recent years, technology has improved to allow oil to be more easily extracted from the ground, and has increased job growth accordingly. Working with the oil business is a lucrative venture and North Dakota’s low unemployment rate is proof of that; most of the recent economic growth in North Dakota has been due to the oil boom in the Bakken formation.
North Dakota State Bank
After the 2008 banking crisis, North Dakota was the only state to have a surplus every year since. This is in part due to the only statewide bank in the U.S., the Bank of North Dakota. The bank serves as a state version of the Federal Reserve, acting as a central bank to other smaller banks in the state. This gives North Dakota its own credit line, which was huge during the banking crisis. Because of this, banks in North Dakota were still able to receive credit from the state bank and give out credit to the average consumer. This kept businesses alive during the crisis and is helping them thrive while moving out of the recession.
A Smaller Population
Another significant contributing factor for North Dakota’s low unemployment is the relatively low rate of population growth. Not many people live in North Dakota; with a population of approximately 700,000 people, it is the 48th lowest in the country. Not many people move to North Dakota for reasons other than the oil business. This is in stark contrast to places like south Florida and central California, to where people are constantly relocating. More people mean more competition for jobs, and while this eventually evens out, a system cannot simply create new jobs overnight. In North Dakota, businesses have a chance to fill the gaps of the growing population, allowing for slow change in actual employment.
North Dakota has historically been a place with low unemployment, and will probably continue to be one for the foreseeable future. With a growing oil business, low population growth, and a solid financial system, there is no reason to expect otherwise. While the relative isolation may not be to everyone’s taste, it is a great place to work if you value job security. There are always jobs in the oil business, and the oil is not expected to run out any time soon.
Randall Gregerson is a well-versed author on the oil and gas industry; he frequently writes about recent developments and employment opportunities within the field of gas processing plants.