From the editor's desk: Things could always be worseThree of the nation’s lowest four metro unemployment rates are located in North Dakota and five of the nation’s top 12 metro unemployment rates are in either North Dakota or South Dakota. Not bad considering the national unemployment rate is hovering around 10 percent with many metros even higher.
While writing this month’s community profile on the Fargo-Moorhead area I received another glimpse of just how fortunate we are to be living in the Northern Great Plains right now.
The Fargo-Moorhead Metropolitan Statistical Area, which includes all of Cass County in North Dakota and all of Clay County in Minnesota, had the nation’s lowest metro area unemployment rate in December with a preliminary not-seasonally-adjusted unemployment rate of 4.0 percent. The Grand Forks, ND-East Grand Forks, MN, MSA was second in the nation at 4.1 percent, while the Bismarck metro area was fourth at 4.4 percent. Sioux Falls (4.7 percent) and Rapid City (5.1 percent) were 10th and 12th, respectively, in the nation in metro unemployment rate (for a closer look at the rankings, check out the By The Numbers page breakdown on page 70).
That’s three of the nation’s top four metro unemployment rates in North Dakota and five of the nation’s top 12 metro unemployment rates in either North Dakota or South Dakota. Not bad considering the national unemployment rate is hovering around 10 percent with many metros even higher.
While the recession’s impact has definitely been felt in North Dakota, South Dakota and Minnesota in the form of layoffs, state budget cuts, restructuring and other methods of belt tightening, it could be a whole lot worse. Even though some in the Dakotas are more accustomed to unemployment rates in the 2-3 percent range, much of the rest of the nation is in much worse shape.
For an illustration of how bad things are in other parts of the country, look no further than Bakersfield, CA, which is 356th out of the nation’s 372 largest metro areas in the December listing of MSA unemployment rate (15.8 percent).
After growing up in Minnesota and Wisconsin, I spent a decade working at newspapers in Florida and California after college. Before moving to North Dakota in 2007, I spent time as a business reporter in Bakersfield, chronicling the meteoric rise and the beginning of the fall of the dusty central California community’s economy.
Buoyed by a rapidly-expanding population, plenty of available land and a strong economy, residential and commercial development exploded in Bakersfield during the runaway real estate market of the mid 2000s. The city quickly became one of the nation’s hottest real estate markets and the community made big jumps in the annual listings of the nation’s top economies and top cities for business.
But the real estate market quickly became overbuilt with home values skyrocketing to unsustainable levels, fueled by investors, bidding wars, mortgage fraud and loose lending standards that allowed many with sketchy credit to buy houses they couldn’t afford. Bakersfield’s median home prices have since returned to 2003 levels — less than half their peak before the housing bubble burst.
As a result of the housing market’s collapse and the overall economic downturn, partially complete housing developments in Bakersfield lie empty, tall weeds grow in front of foreclosed homes in gated communities, unemployment has jumped and local governmental agencies struggle with greatly reduced funding streams.
While the Minneapolis-St. Paul metro area and a few other cities in the three-state area have been hit harder than others, we should count ourselves lucky.
The regional economy is rarely exciting, but maybe that’s not such a bad thing. Along with our customary two-year lag behind national economic cycles, we tend to be relatively insulated from the wild swings experienced on the coasts.
In a few years when the national economy’s recovery is complete, there will undoubtedly be another boom time when the rest of the nation will leave North Dakota and South Dakota in their rear view mirror.
That’s OK. Things could always be worse.