There is plenty of work available for North Dakotans and immigrants alike

By Raheem Williams and Jeremy Jackson

A Jan. 23 letter to the editor from Judy Estenson decried falling wages in North Dakota and placed blame squarely on the state's growing immigrant population. However, the arguments are inconsistent with economic research and fail to capture the whole picture of wages and employment in North Dakota.

While wages in the state did decline in 2015 and 2016, the cause had little to do with immigration and everything to do with the collapse in commodity prices. The price of oil fell from $105.79 in June 2014 to $30.32 in February 2016. As everyone in North Dakota knows, this led to a massive budget shortfall as oil tax revenues plummeted.

Falling oil prices also led to the loss of over 10,000 high-paying mining jobs, causing a rise in North Dakota's unemployment rate. With the collapse of the oil industry, nearly all of North Dakota's income measures declined.

Fortunately, the economic outlook today is much brighter.

Soon-to-be-released quarterly labor market reports by the Center for the Study of Public Choice and Private Enterprise at North Dakota State University show that the average weekly earnings in North Dakota increased by 4 percent from September 2016 to September 2017. This increase is one percentage more than the national average and 2.5 percentage points higher than regional inflation.

North Dakota's unemployment rate has also dropped back below oil-bust levels. These are signs that declining wage trends may be reversing as the state recovers from the collapse in oil prices.

While North Dakota does have a tight labor market, this does not mean workers can "demand pay raises." Wages result from the equilibrium between labor supply — the willingness of workers to accept a job at a given wage — and labor demand — the willingness of employers to hire workers at a given wage. Even in a tight labor market, there are too many evolving factors that can influence labor supply and demand to singularly blame immigration for any perceived changes.

Furthermore, research by the Brookings Institution found that immigrants improve the living standards of Americans "by boosting wages and lowering prices." While economic research shows a range of estimates, the prevailing consensus is that any decrease in wages and employment is minimal to nonexistent. This is especially true in North Dakota — the state with the fifth lowest immigrant population in the nation.

North Dakota suffers from stagnant labor force growth and a shortage of workers. According to the state's workforce intelligence network, there are currently over 12,000 open jobs in the state. As the governor said in his State of the State address, that's like having another city the size of Jamestown. There is plenty of work available for native North Dakotans and immigrants alike.

This op-ed appeared in InForum.

The views and opinions expressed in this article belong to the author and do not reflect the official policy or position of any agencies he/she is employed by or affiliated with.

 

 

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