Analysis: Next challenge for lawmakers
Editor's note: Forum Editor Lou Ziegler wrote this analysis based on a statewide poll and information gathered during the newspaper's "Saving North Dakota" series.
Editor's note: Forum Editor Lou Ziegler wrote this analysis based on a statewide poll and information gathered during the newspaper's "Saving North Dakota" series. The series, published in 14 installments in December, concludes today, although issues related to it will be highlighted during ongoing coverage of the North Dakota Legislature.
North Dakota can save itself from ongoing intellectual and financial losses of staggering proportions.
But it will take political courage, change in attitudes, bipartisanship and investment to do it.
The need is urgent.
That consensus emerges from more than 1,100 contacts made by The Forum -- through interviews, surveys, polling, e-mails and online chats -- for its "Saving North Dakota" series.
Reporting for the series started in April and ended on Monday. The constant drumbeat heard during that time was young people are leaving the state in alarming numbers, and people making good wages are on the way out, as well.
The reason for the flight: better-paying jobs and career opportunities elsewhere.
In a bittersweet way, reporting and polling showed that many of those planning to leave don't want to go; they hold great affection for North Dakota.
Bolstered by solid popularity ratings, Gov. John Hoeven and state legislators next week have the opportunity to begin work on measures that could ultimately stem the out-migration.
A statewide poll, commissioned by The Forum for the "Saving North Dakota'' series, found 69 percent of the 606 people surveyed said the quality of state government was "good'' or "very good,'' while 66 percent also put Hoeven's performance as "good'' or "very good.''
With backing of the citizens, legislators have a platform to seriously address economic development issues that could end the out-migration.
Many people offered varied solutions for the "Saving North Dakota" series, some small in scope, some broad.
Pulled together, the ideas reflect a "can-do" spirit instilled into North Dakotans by pioneers who settled the state:
- As the series reported, North Dakota holds a strong upper hand over South Dakota when it comes to technology and research, with examples being the University of North Dakota's Rural Technology Incubator and Center for Innovation, and North Dakota State University's Research and Technology Park.
The prospects of a research corridor between NDSU and UND are very real.
The setting for business-university partnerships in advance technology appears far more attractive in North Dakota than South Dakota, if the climate for economic development improves.
- There is a growing sense of optimism that North Dakota will strengthen internships between companies and college students in the state. This could serve to keep people in the state following their schooling.
Students at NDSU and future leaders with the FM Leadership class are working to create more internship opportunities. Hoeven plans to push the Legislature in this area.
- North Dakota's percentage of population age 85 and above is the highest in the country, and growing.
Some suggested offering incentives for companies that could prosper from doing geriatric research -- from equipment manufacturers to pharmaceutical firms.
- The open spaces of North Dakota, the beauty of the western landscape, make tourism the fastest-growing industry in the state.
As the series reported, some are taking steps to put the state's natural resources to the forefront, such as Birding Drives Dakota, for bird-watching events and destinations.
There are dinosaur digs and museums to promote, buffalo to watch. Plans are being discussed for making a large recreational development along the Jamestown reservoir, named after the late novelist Louis L'Amour.
In Medora, a world-class golf course is scheduled to open this summer, joining two other spectacular courses in Bismarck and Williston, in an easily accessible golfing triangle.
- As the series reported, strong feelings exist that North Dakota communities and businesses must make themselves more interesting by tapping the creative energies of the young.
That's especially important in the larger cities, where people just out of school have more job and career choices.
- Another solution is to actively recruit refugees to North Dakota so the state has enough workers to allow businesses to grow. Without the influx of refugees during the 1990s, North Dakota's population would have dropped during the decade.
- Another solution voiced several times was the need for North Dakota to deal with what historian Elwyn Robinson more than 40 years ago called "The Too-Much Mistake." This is obvious in public schools, where nearly one-third of the state's more than 200 school districts have enrollments of less than 100 students.
- In the end, the Legislature will need to tax more, or cut more, to find more money to promote North Dakota and to encourage companies with good-paying jobs to start or relocate in the state.
Interviewed for this series, Gov. Hoeven said it would not necessarily be political suicide to raise taxes, if more high-paying jobs resulted from it.
One proposal, from Sen. Randy A. Schobinger, R-Minot, is to eliminate both the individual and corporate income tax, replacing them with a revenue-neutral sales tax.
Facts don't tell story
During the reporting of the "Saving North Dakota'' series, politicians often volunteered that 63,000 jobs were created in North Dakota during the 1990s.
They said this is a sign of a growing, healthy economy.
But rarely did they drill deeper to explain the kinds of jobs being created.
The Job Service's "North Dakota's Economic Road Map 2002," shows since 1990, employment increased by 25.8 percent, but the state's labor force increased by 6.5 percent.
This means lots of jobs were available "but not at the skill and/or wage level people desire," the Job Service report said.
"Underemployment is the result, an increasing reality throughout the last decade in North Dakota."
This also created the climate where many people had to work two and three jobs to get by.
The numbers from Job Service North Dakota also show 43.5 percent of the job growth during the 1990s occurred in the service sector at an average wage of $22,817 per year -- less than the state average annual wage of $24,683 in 2000.
Medical jobs, which average more than $29,000 a year, account for 38 percent of the service jobs. The average wage for the other 62 percent in 2000 was $18,640 per year.
Retail trade added the next highest number of net jobs -- nearly 10,000.
In 2000, the average retail job in North Dakota paid $13,867 a year.
That year, nearly one in every five North Dakotans workers worked in retail, at an average wage of $6.67 an hour.
Politicians also trumpet the need for more higher-paying "high-tech jobs," although by 1999 the average high-tech wage of $30,535 placed North Dakota last among the 50 states.
Focus on good jobs
In 2000, the average wage per job in North Dakota was 48th lowest among the 50 states, according to the federal government.
"The state's annual average wage is 30 percent lower than the nation's," Job Service North Dakota reports.
Polling showed people leave the state mainly for better wages and career possibilities. Out-migration comes with a huge cost, according to two previously unreported studies reported in the "Saving North Dakota" series:
- People leaving North Dakota during a recent three-year period took $384.5 million more from the state's economy than newcomers put into it, a North Dakota State Data Center study estimated.
Cass County, the state's largest and most financially thriving county, actually lost almost $26 million in taxable income between 1998-2001, despite a net gain of 1,092 Internal Revenue Service tax filers.
This points to a path of higher-paid workers leaving the state, replaced by lower-paid personnel.
- The state Department of Public Instruction studied Robert C. Byrd Scholarship recipients during a recent 10-year period.
The study documents the intellectual drain occurring in North Dakota.
Winners of the Byrd scholarship are among the brightest in high school graduating classes.
The DPI received responses from 131 of North Dakota's 204 Byrd scholars who graduated between 1987 and 1997.
The findings: 86 percent of them are no longer living in North Dakota; about half of them said better career prospects were available to them elsewhere.
In all, the Data Center estimates between 2000 and 2004, North Dakota will lose 13,000 residents ages 20 to 24.
No other state is experiencing North Dakota's population losses.
Ten days ago, the federal government released U.S. Census Bureau information that said just one state in the nation lost population in the last year:
North Dakota, whose population was down by 2,440 residents -- or 0.4 percent.
Uneven playing field
In addition to low wages, underemployment and population loss issues, North Dakota is fighting a losing economic battle with South Dakota.
South Dakota's economy grew by 66 percent during the 1990s; North Dakota's grew by 48 percent.
Nonfarm employment grew by 37 percent in South Dakota during that time; North Dakota's grew by 27 percent.
Personal income increased 73 percent during the 1990s in South Dakota; it grew by 56 percent in North Dakota.
South Dakota gained 63,000 people the past decade; North Dakota grew by just over 6,300.
The reasons for South Dakota's successes are obvious to politicians on both sides of the Dakota border.
South Dakota's image is that it is much friendlier to businesses, with no corporate or state income taxes.
South Dakota also spends considerably more money promoting itself than North Dakota.
However, the North Dakota Legislature has the power this session, should it choose to use it, to begin leveling the economic development field.
Need is urgent
As many factors reported in "Saving North Dakota" point out, urgent action is needed.
Take existing negative forces, and it appears North Dakota's economy is at the greatest risk of any time in the history of the state.
History suggests it.
In 1990, "The North Dakota Vision 2000 Report," written after 40 community meetings, said:
"The basic conclusion ... now shared by many North Dakotans today is that North Dakota's fragile economy is AT RISK. Consider:
"North Dakota is the only state in the union to have fewer residents today than it did in 1930.
"Per capita income has steadily declined since 1975 and is now 15 percent below the national average.
"Forty percent of net farm earnings are in the form of federal support payments, making the state extremely dependent and vulnerable to the whims of the federal government.
"Retail activity in only our nine largest cities accounts for 70 percent of North Dakota's taxable sales."
That was written nearly 13 years ago. Today:
- North Dakota remains the only state to have a population less than it did in 1930. It is the only state in the new millennium with declining population.
- Per capita income slipped in the past 13 years, and is now 16 percent below the national average.
- For the past four years, about 100 percent of net farm income came through federal subsidies, according an NDSU study released this year.
- Retail activity in the state's six largest cities now accounts for 70 percent of North Dakota's taxable sales.
What can be done to save North Dakota?
One week from today, the North Dakota State Legislature convenes to take on heavy problems.
With publication of "Saving North Dakota," an inspired Legislature, should it wish, can draw from a body of information and ideas -- and solutions -- for dealing with those problems.
The governor and the Legislature have the knowledge that they are opening the session from a position of power -- power in terms of popularity among the citizens of the state.
The 1990 "Vision 2000" report said in bold type:
"North Dakota is at risk and cannot stand still. It must take bold actions now to prepare for the future."
Nearly 13 years later, that future is now.
By all appearances, the Legislature -- all North Dakotans -- never faced more compelling reasons for dealing with the present than they do now.