Don't Buy The Myth: North Dakota Is Doing Just Fine

Last month I wrote about a story in The Atlantic by former Bismarck Tribune reporter Mara Van Ells headlined “A North Dakota Oil Boom Goes Bust.” I thought the article was inaccurate and unfortunate, and I wasn’t the only one.

“It’s a great example of a ‘journalist’ writing the story she wanted to tell instead of the story she was told,” a friend who works at a newspaper in the state and was a colleague of Van Ells told me.

Today in Forbes James Taylor also responds to the article, noting that The Atlantic has an unfortunate history of declaring North Dakota bust:

On June 27 the Atlantic published an article titled “A North Dakota Oil Boom Goes Bust,” with the subhead “What will happen to those who built their lives on it?” The theme of the article was North Dakotans are suffering miserably and being played the fool by a predatory oil industry that soaked up the state’s oil when prices were high and have now shut down operations. The end result, according to the Atlantic, is abandoned “graveyards” of formerly productive oil rigs, rapidly rising unemployment, “unraveling” economic conditions, and a statewide economic bust that is “diminishing” the lives of those who live there. The Atlantic’s message is unmistakably clear – North Dakotans are worse off now than before North Dakota oil production took off, and it would have been better for North Dakotans if the oil boom had never happened at all.

The Atlantic’s decision to publish such an article seemed rather odd to me, given that the Atlantic has been making this same wishful claim for more than two years. In February 2013 the Atlanticpublished an article titled “Is North Dakota’s Miraculous Boom Already Over?” Apparently it wasn’t, given that the Atlantic is still trying to make the same fanciful argument more than two years later. The Atlantic’s February 2013 article claimed “North Dakota’s economy fell back to earth” in 2012. “The drop-off is striking,” the article claimed. Yet the only thing “dropping off” in 2012 was the state’s unemployment rate. North Dakota’s average unemployment rate in 2011 was 3.5%. North Dakota’s average unemployment rate in 2012 was 3.1%. In what galaxy does an unemployment rate that drops from 3.5% to 3.1% constitute an economy “falling back to earth” in a “striking” manner?

Taylor notes that The Atlantic is hardly alone in this vein of reporting:

Yet the Atlantic’s doom-and-gloom storyline is relatively tardy and muted compared to others in the left-leaning media. CNBC, for example, published a January 2012 article titled “America’s Oil Rush: Bust or Boom,” claiming horrible consequences of 3.1% unemployment and six-figure incomes in North Dakota in the midst of national economic stagnation. According to CNBC, North Dakota’s high worker pay and plentiful jobs meant North Dakotans were being “crushed by truck traffic, plagued by lagging infrastructure, and shocked by a surge in violent crimes.” How horrible! If only North Dakota would have had the joy of experiencing the Great Recession like the rest of the nation, then state residents would be happy!

In February 2012 CNBC published a follow-up article titled “The Downside of N. Dakota’s Oil Boom.” The article highlighted an increase in bar fights, DUIs, and crime incidents as more people moved into the state to take advantage of the state’s booming economy – as if the raw number of crimes could be expected to stay the same despite a growing population. By the Atlantic’s flawed logic, Americans were better off in 1935 than today because a much smaller, less prosperous population meant fewer bar fights.

Now, curiously, CNBC has changed its tune and claims prosperity is good but an oil bust is creating economic decline in North Dakota. Workers have “suddenly been left with no income” because oil production is falling, CNBC claims in a June 27, 2015 article, “Is North Dakota’s economy oil-rigged?: The Nation’s second-largest producer of oil is taking a hit from the decline in production.”

“The inconvenient truth for environmental activists and their media allies is North Dakota’s oil-production economy continues to bring prosperity and higher living standards to North Dakota,” Taylor concludes. “Despite media claims to the contrary, the North Dakota economy is still doing extremely well. Unemployment remains at 3.1%, the exact same rate it was in January 2012 when the Atlantic wrote about the state’s economic prosperity.”

One reason for that is North Dakota isn’t exactly a stranger to the perils of commodity-based economic growth. Aside from energy, North Dakota’s other major industry – historically our state’s most important industry – is agriculture. An enterprise where anything from bad weather to price fluctuations can have a major impact on tax revenues and jobs and commerce.

To be sure, the oil boom had an outsized impact on North Dakota’s economy, but so far the state is proving resilient during the oil price downturn. There are still plenty of jobs available – Taylor’s article notes that Job Service is still listing 24,000 openings which is more than the 13,490 people reported as unemployed in the state for June of 2015.

How many states in the union would like to have more jobs available than unemployed people?

I think there is a perverse desire by many in the national media to see North Dakota fail. They want a bust for ideological reasons.

Unfortunately for them, and fortunately for everyone else, North Dakota isn’t obliging.