What's Up with Booming North Dakota?

North Dakota is booming!  Yes, the same North Dakota of Fargo movie fame.  The same bitterly cold, flat, windy North Dakota we all know and...love?  North Dakota takes a lot of ribbing for its infamously cold winters, but now the state can also boast of having the lowest unemployment in the United States.  Why though are jobs so plentiful there?

North Dakota's situation involves two factors:  one a long-term demographic trend and the second the recent find of oil in the Bakken formation.

Like many rural areas, the Great Plains have been steadily losing people as many younger and working age people leave for jobs, potential mates, and other amenities in bigger cities.  The people who remain behind tend to mature into old age there.  Thus, this demographic phenomena is called aging in place.  Unlike popular retirement states such as Florida and Arizona, the Great Plains' seniors usually grew up and never left the rural communities that are their homes.  In much of rural North Dakota, unemployment is low in part because there are few working age North Dakotans to take jobs being vacated by retiring seniors.

The second factor that is making North Dakota boom and attract a sudden influx of working age people is the discovery and development of the Bakken oil field under western North Dakota.  In places like Williston, ND, jobs are plentiful and housing is hard to find.  Like earlier boomtowns, the discovery of oil has led to a sudden influx of workers and the infrastructure in these rural areas is trying to catch up to all the new residents.

Map: Where You Are Most Likely to Be Stuck in a Part-time Job

This map looks at the percentage of workers who want a full-time job but can only find part-time work.  In technical terms, this map shows the highest rates of underemployment in the United States.

The Western states of Nevada, California, Oregon and Washington have considerably higher underemployment.  North Dakota and South Dakota have low overall unemployment and relatively few part-time workers unable to find full-time work.

Map: What States Have the Most Discouraged Workers?

This map shows the variation in discouraged workers nationally.  Discouraged workers are unemployed Americans who have given up looking for a job for awhile and have not applied for any jobs in the past 4 weeks.

In no states does the percentage of discouraged workers exceed 1%, so the numbers are relatively low. This map calculates discouraged workers as the U4 unemployment measure by the Bureau of Labor Statitistics minus U3.  U4 consists of the official unemployment measure (U3) plus discouraged workers.  So I've pulled discouraged workers out and looked at the spread of data by standard deviations.

North Dakota's oil-fueled jobs boom continues to keep that state's unemployment the lowest in the US.  Nevada's 9.7% unemployment (U4 measure) is actually higher than South Carolina's 9.3% rate, but the Palmetto State has the highest percentage of discouraged workers in the country -at least in December 2013.  Neighboring Georgia, Alabama, and Florida also have higher percentages of discouraged workers compared to the mean for the United States.

Maps: Comparing the Unemployment Measures

This series of maps shows the 4 highest unemployment measures for December 2013:

• U3 -the official unemployment rate
• U4 -U3 plus discouraged workers
• U5 -U4 plus marginally employed workers
• U6 -U5 plus part-time workers unable to find full-time jobs

You can see more discussion of the six measures of unemployment here.

 U4:  The addition of discouraged workers who have not looked for a job in the past 4 weeks because of the lack of jobs pops Nevada's unemployment rate to over 10%.

U5:  Marginally employed workers are those who report they would like a job but are not looking.  If the jobs market was better, they report they would look for work.

U6:  This is the highest measure of unemployment computed by the US Bureau of Labor Statistics.  In December 2013 Nevada led the country in unemployment with a figure of 18.1% on U6.  In other words, almost 1 in 5 workers in Nevada cannot find a full-time job.

Map: The OFFICIAL December 2013 Unemployment Figures by State

Last week I posted about the 6 measures of unemployment (U1 - U6) calculated by the US Bureau of Labor Statistics. This map shows the official measure of unemployment (U3).  The national U3 number is 6.7% of the civilian labor force is unemployed.  Nevada has the highest unemployment.  North Dakota has the lowest unemployment in December 2013.

UPDATE: What's the REAL Unemployment Rate?

December 2013 Unemployment Rates, US Bureau of Labor Statistics

Did you know there are actually SIX unemployment rates?  There are.  The US Bureau of Labor Statistics calculates 6 unemployment rates (U1-U6) each month and adjusts them for seasonal employment.  The official unemployment rate is U3 and in December 2013 that rate was 6.7% of the civilian labor force were unemployed.  That's not the whole picture though:

U1 is the percentage of people unemployed for 15 weeks or longer
U2 is the percentage of people who have lost a job or completed a temporary job
U3 is the official unemployment rate and is the percentage of people who are unemployed and have actively looked for work within the past 4 weeks
U4 is the U3 figure combined with discouraged workers who have given up looking for a job until the job market improves
U5 is U4 plus marginally attached workers who are able to work and would like a job but have not looked for a job recently
U6 is U5 plus part-time workers who cannot find a full-time job

So, while the official unemployment rate is down to 6.7% in December 2013, this figure only includes people who have looked for work in the past 4 weeks and who are not employed part-time.

At 6.7%, that means that 1 in 15 Americans cannot find a job.  Using U6, 1 in 8 Americans in the labor force cannot find a full-time job.  1.4% of the labor force have given up looking for a job right now, and 5% of workers are stuck in a part-time job unable to find full-time work.

UPDATE:  My friend Michael points out that these rates are for the civilian labor force and thus do not include American military workers and many/most Federal workers.