The Self-Correcting Outmigration Problem
This is my column for this month's issues of the Dakota Beacon which should be arriving for subscribers some time next week.
Outmigration.
It's a term North Dakotans have come to hate. It represents a pessimistic view of our state's future. A view that includes our communities dwindling in size and dying as well as our children moving to pastures perceived as being greener. Both images are enough to send a shiver down the spine of any citizen of this state.
We are told that outmigration is caused by a lack of opportunity and a lack of good paying jobs for our younger generations. Is that true? I think it is to some extent. I think some outmigration is caused by the draw of the bright lights from bigger metropolitan areas (always an attractive lure for the young), but the lack of opportunity/low wages argument does have some merit.
The problem I have with people complaining about outmigration is that many of them feel that we can use government programs/legislation to fix the problem. That we can somehow take tax dollars and use them to manufacture jobs to provide the opportunities that will keep young North Dakotans in the state. That's a foolish opinion to have.
To understand the outmigration problem we must first look at what has caused it.
North Dakota's economy has always been based largely on agriculture. According to the United States Department of Agriculture even as late as 2005 more than half of North Dakota's population – 340,372 people - lived in the rural areas of the state. The trend, in recent years, has been for this rural population to decrease while the urban populations in the state increase, but the fact that well over half of the state's citizens live still live out in the country proves just how dependent this state is on agriculture both in the past and present. You can bet that the jobs those citizens in rural communities work are either in agriculture or dependent on serving the needs of those who are working in agriculture.
So what does agriculture have to do with outmigration? Plenty, given that our economy is driven by agriculture. There have been many advances in the agriculture industry in recent years. Advances in machinery, seeds, fertilizers, growing techniques, weather analysis, etc. have resulted in allowing more land to be farmed with less labor. Even working a small farm thirty or forty years ago took a farmer, his wife, all of his children and often several hired hands. These days - thanks to advances in the science of agriculture, better technology and bigger and better equipment – farmers can work more land with less manpower.
Unfortunately, there is only so much land out there to farm. So while these technological advances have made life easier for farmers they've also resulted in driving many people out of the agriculture industry as it now takes fewer people to grow, harvest and transport to market the crops produced on the land. Slowly but surely the number of people employed in agriculture here in North Dakota has shrunk. People have been laid off, but more importantly for the topic at hand many of the agriculture jobs that were available to one generation are no longer available to the next.
This has forced younger generations to train for jobs outside of the agriculture industry. Jobs that aren't always necessarily available in North Dakota. Once these kids finish their training they're forced to start their careers elsewhere.
That, my friends, is outmigration in a nutshell.
So what do we do to solve this? Nothing, in my opinion. I think it's a self-correcting problem.
Job markets are like any other market in that they are driven by supply and demand. When there is a large supply of workers but little demand for them from employers wages tend to be low. When there is a large demand for workers but only a small supply of potential employees wages tend to be higher as businesses compete for qualified employees.
Outmigration is simply this basic economic fact at work. As the agriculture industry has employed fewer and fewer people the available labor pool for other areas of employment has grown and wages have gone down. This has caused workers (especially young workers) to seek higher wages elsewhere. Eventually, though, as North Dakota's excess workers are siphoned off though outmigration the labor pool will again shrink and wages will go higher, attracting more workers to stay.
Personally, I think we're right at the tipping point already. State-wide unemployment in June of this year was at a rock-bottom low 3.8%. That figure is a little distorted with all the hiring by the oil industry going on in western North Dakota, but when that rate is coupled with the fact that more people are moving into the state than away from the state (according the North Dakota's economic forecasting consultant) and the fact that the state's population decline has largely halted I think it's pretty safe to conclude that the outmigration trend may be about to be replaced with an inmigration trend.
Many may be tempted to credit government-backed economic development efforts for this reversal in trends. That may be true to some extent as government can help with the situation by rolling back regulations and tax burdens on businesses so that it is easier for entrepreneurs and business people to set up shop and hire North Dakotans, but using tax dollars to try and create jobs usually results in those monies disappearing into the coffers of some business that moves along as soon as the money dries up.
At the end of the day outmigration is certainly something North Dakotans should be concerned about. What we need to avoid, though, are knee-jerk reactions to hysterical proclamations of outmigration doom put forth by some factions. As much as we may not like the idea of our friends, family - and most importantly children - leaving the state we must recognize that outmigration is a perfectly natural economic trend that will correct itself given time and sanctuary from meddling politicians.
Outmigration.
It's a term North Dakotans have come to hate. It represents a pessimistic view of our state's future. A view that includes our communities dwindling in size and dying as well as our children moving to pastures perceived as being greener. Both images are enough to send a shiver down the spine of any citizen of this state.
We are told that outmigration is caused by a lack of opportunity and a lack of good paying jobs for our younger generations. Is that true? I think it is to some extent. I think some outmigration is caused by the draw of the bright lights from bigger metropolitan areas (always an attractive lure for the young), but the lack of opportunity/low wages argument does have some merit.
The problem I have with people complaining about outmigration is that many of them feel that we can use government programs/legislation to fix the problem. That we can somehow take tax dollars and use them to manufacture jobs to provide the opportunities that will keep young North Dakotans in the state. That's a foolish opinion to have.
To understand the outmigration problem we must first look at what has caused it.
North Dakota's economy has always been based largely on agriculture. According to the United States Department of Agriculture even as late as 2005 more than half of North Dakota's population – 340,372 people - lived in the rural areas of the state. The trend, in recent years, has been for this rural population to decrease while the urban populations in the state increase, but the fact that well over half of the state's citizens live still live out in the country proves just how dependent this state is on agriculture both in the past and present. You can bet that the jobs those citizens in rural communities work are either in agriculture or dependent on serving the needs of those who are working in agriculture.
So what does agriculture have to do with outmigration? Plenty, given that our economy is driven by agriculture. There have been many advances in the agriculture industry in recent years. Advances in machinery, seeds, fertilizers, growing techniques, weather analysis, etc. have resulted in allowing more land to be farmed with less labor. Even working a small farm thirty or forty years ago took a farmer, his wife, all of his children and often several hired hands. These days - thanks to advances in the science of agriculture, better technology and bigger and better equipment – farmers can work more land with less manpower.
Unfortunately, there is only so much land out there to farm. So while these technological advances have made life easier for farmers they've also resulted in driving many people out of the agriculture industry as it now takes fewer people to grow, harvest and transport to market the crops produced on the land. Slowly but surely the number of people employed in agriculture here in North Dakota has shrunk. People have been laid off, but more importantly for the topic at hand many of the agriculture jobs that were available to one generation are no longer available to the next.
This has forced younger generations to train for jobs outside of the agriculture industry. Jobs that aren't always necessarily available in North Dakota. Once these kids finish their training they're forced to start their careers elsewhere.
That, my friends, is outmigration in a nutshell.
So what do we do to solve this? Nothing, in my opinion. I think it's a self-correcting problem.
Job markets are like any other market in that they are driven by supply and demand. When there is a large supply of workers but little demand for them from employers wages tend to be low. When there is a large demand for workers but only a small supply of potential employees wages tend to be higher as businesses compete for qualified employees.
Outmigration is simply this basic economic fact at work. As the agriculture industry has employed fewer and fewer people the available labor pool for other areas of employment has grown and wages have gone down. This has caused workers (especially young workers) to seek higher wages elsewhere. Eventually, though, as North Dakota's excess workers are siphoned off though outmigration the labor pool will again shrink and wages will go higher, attracting more workers to stay.
Personally, I think we're right at the tipping point already. State-wide unemployment in June of this year was at a rock-bottom low 3.8%. That figure is a little distorted with all the hiring by the oil industry going on in western North Dakota, but when that rate is coupled with the fact that more people are moving into the state than away from the state (according the North Dakota's economic forecasting consultant) and the fact that the state's population decline has largely halted I think it's pretty safe to conclude that the outmigration trend may be about to be replaced with an inmigration trend.
Many may be tempted to credit government-backed economic development efforts for this reversal in trends. That may be true to some extent as government can help with the situation by rolling back regulations and tax burdens on businesses so that it is easier for entrepreneurs and business people to set up shop and hire North Dakotans, but using tax dollars to try and create jobs usually results in those monies disappearing into the coffers of some business that moves along as soon as the money dries up.
At the end of the day outmigration is certainly something North Dakotans should be concerned about. What we need to avoid, though, are knee-jerk reactions to hysterical proclamations of outmigration doom put forth by some factions. As much as we may not like the idea of our friends, family - and most importantly children - leaving the state we must recognize that outmigration is a perfectly natural economic trend that will correct itself given time and sanctuary from meddling politicians.
