The State Willing to Pay Big Bucks to Attract New Workers

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Around the nation, states struggling with stubbornly high unemployment rates face the problem of having too few jobs for all the able-bodied workers. But a few states in the Midwest face a different problem, one that places stuck with 10% unemployment rates would envy: too many jobs and not nearly enough qualified, able-bodied workers. Now, even as news of belt-tightening budget crunches is all too common, one state is spending millions to lure out-of-state workers in a large-scale recruiting effort.

Throughout the Great Recession and the post-recession era, North Dakota has stood out from the pack with an unusually low unemployment rate. Thanks mainly to the state’s oil boom, jobs in North Dakota have been plentiful for years. As of July, the unemployment rate was just 3%, lowest in the nation.

In early 2011, when the unemployment rate throughout the U.S. stood at 9%, North Dakota’s was 3.9%, prompting the Wall Street Journal to report on how the state was struggling to attract much-needed doctors, nurses, truck drivers, welders, engineers, retail clerks, insurance agents, and more. A year later, by which time North Dakota’s unemployment rate dropped to 3.3%, a much-cited op-ed suggested that America’s unemployed and underemployed youth desert states such as Nevada (13% unemployment) for greener pastures (at least figuratively) in North Dakota.

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Lately, though, the state going to the most extraordinary lengths to attract workers isn’t North Dakota, but its neighbor to the south. Earlier this year, South Dakota agreed to pay up to $5 million to the Wisconsin-based recruiting firm Manpower Group to help pursue what it’s calling the “1,000 New South Dakotans” initiative. As the name indicates, the plan is to attract 1,000 new workers—in fields such as health care, education, manufacturing, technology, and finance—to the state by the spring of 2014. The hope is that the millions spent on recruiting will quickly be recouped in the form of the taxes and other revenues collected through the arrival of all of those new workers.

One reason that it seems necessary to go to such unprecedented lengths is that the easiest states to recruit from—its immediate neighbors—have even lower unemployment rates than South Dakota. The Dakotas and Nebraska are often depicted as mere “flyover states” or worse, as bleak, flat, desperate and desolate places (think: the Coen brothers movie “Fargo” and the Bruce Springsteen album “Nebraska”). But in terms of the local economy and jobs market, there is no other region as hot and dynamic in the country. All three states currently boast unemployment rates under 4.5%, compared to the national rate of over 8%.

The Minneapolis Star-Tribune noted that South Dakota’s recruiting efforts have expanded beyond the immediate vicinity, into places like Minnesota, Arizona, and even the coasts.

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Despite the hot jobs market, wooing qualified workers to relocated to the region won’t be easy. As one expert told the Star-Tribune: “You go to the East Coast and West Coast, and they hardly know those states exist.”

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

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EconomicsDude
EconomicsDude like.author.displayName 1 Like

One of the main reasons Nebraska/SD/ND have such low unemployment rates is because many students leave these states once they graduate from college. Why? Because there are very few actual job opportunities in these states for college graduates. Therefore, these states seem to have a low unemployment rate because so many college students leave for states with more and/or better actual job opportunities (despite what the unemployment rate may be). All this does is shift unemployment from one state to another if they are not actually able to land a job in their new state or if they get hired and take a job away from a current member of that new state. This shift makes it seem like Nebraska/SD/ND have low unemployment rates and therefore helps lead to other states having higher unemployment rates. However, the root problem is Nebraska/ND/SD have low actual job opportunities and incentives for graduates to stay and find work or start their own businesses. If these states can't keep their own graduates home how do they expect to lure people from across the country?