NCPA - National Center for Policy Analysis


July 16, 2010

Throughout this new millennium, the cities of the plains -- from Dallas in the south through Omaha, Des Moines, and north to Fargo -- have enjoyed strong job growth and in-migration from the rest of the country.  North Dakota boasts the nation's lowest unemployment rate -- 3.6 percent in May, compared with the national average of 9.7 percent -- with South Dakota and Nebraska right behind it, says Joel Kotkin, a Distinguished Presidential Fellow in urban futures at Chapman University and an adjunct fellow with the Legatum Institute in London. 

According to data analyzed by economist Michael Shires for Forbes and 

  • Based on employment growth over the last decade, the North Dakota cities of Bismarck and Fargo rank in the top 10 of nearly 400 metropolitan areas.
  • Much of that growth has come in high-wage jobs; in Bismarck, the number of high-paying energy jobs has increased by 23 percent since 2003, while jobs in professional and business services have shot up 40 percent. 

The primary drivers of this new growth, says Debora Dragseth, an associate professor of business at Dickinson State University, are basic industries like agriculture and energy.  Salaries may be low by coastal standards, but so are living costs.  And the prices of commodities like beef, soybeans and grains have generally continued to rise, due in large part to growing demand from China, India and other developing countries. 

But the biggest play by far is in energy, including coal, natural gas and oil, which exist in prodigious quantities from Texas to the Canadian border.  Besides the vast reserves of oil that have made it the country's fourth-largest producer, North Dakota possesses significant deposits of natural gas and coal, as well as huge potential for wind power and biofuels.  These industries are drawing hundreds of skilled workers from places like California and Michigan, who are moving to Bismarck, the state's capital, and towns to the west, says Kotkin. 

The energy boom has placed states like the Dakotas and Texas in an enviable fiscal situation.  Oil and gas revenues are filling up their coffers, allowing them to eschew the painful cutbacks affecting most coastal states: 

  • North Dakota has a $500 million surplus, and next year the cash gusher could rise to more than $1 billion.
  • That could go a long way in a state with barely 600,000 people. 

Source: Joel Kotkin, "The Great Great Plains," Newsweek Magazine, July 12, 2010. 

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