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Richard Rider

Lessons for California from North AND South Dakota

North Dakota has the lowest unemployment rate in the nation at 3.5%. Ten counties in ND have less than 2% unemployment. They have an oil and gas extraction boom going on, though their low unemployment rate predates that growth in oil and gas jobs.

Critics like to claim that ND is having a temporary boom that will shortly be followed by a bust. But while ND certainly is benefiting from an oil and gas boom, the depletion rate is slow, and the expansion of wells is dramatic — they’ve barely started their boom. This boom ain’t busting for many, many years to come. The petroleum extraction in ND is essentially now illegal in anti-business, “pro-environment” CA.

But perhaps more interesting is SOUTH Dakota (SD), which has no oil and gas boom. Their unemployment rate hasn’t been over 5% in over a decade — and currently is 4.5%. The state is very business friendly with low taxes (including no corporate or personal income tax). They “steal” businesses from neighboring high-tax Minnesota with monotonous regularity.

The US Bureau of Labor Statistics (BLS) has tracked the state unemployment rates since 1976. In South Dakota, unemployment peaked in 1983 (in a recession) at SIX PERCENT.
http://www.bls.gov/web/laus/lauhsthl.htm

The sustained unemployment rate in South Dakota is no boom. It’s an ongoing benefit of having a business friendly, low tax state. Indeed, the SD governor recently visited the San Diego area seeking to poach new businesses for his state, apparently with some success.
http://www.nctimes.com/business/economy-governor-sells-local-business-leaders-on-moving-to-south/article_a8790ba3-cdbc-515d-ada2-81f30a20880f.html

Can California learn from such clear-cut examples of how to return the Golden State to its former prosperity? You betcha!

Will it? Naaahhhhhh.

4 Responses to “Lessons for California from North AND South Dakota”

  1. Robert Bosich Says:

    If you plan on moving to the Dakotas…..be prepared to chop wood six months of the year and can lots of chokeberries, fruits and veggies….it is really really cold and windy and there are few and far between Costco’s…

    No problem finding homes….dirt cheap….after the winters!!!!

    Have some friends trying to sell there home for ten years in a small 500 person community….wait….Lexie and Horst left this morning…498…

  2. Richard Rider Says:

    My wife is from Brookings, South Dakota, a town of maybe 30,000 (counting students at South Dakota State) — the fourth largest city in the state.

    I’ve been there several times. They have a huge Super-WalMart — life is good. Also some significant manufacturers in Brookings — including a 3M plant stolen from Minnesota.

    You can buy a semi-mansion for $400K. Crime is minimal, schooling is good, utility rates are low (except for long distance land line calling). The volunteer fire department offers first rate protection — no $100+K firefighters sitting around in THEIR fire station!

    There is no bad weather in South Dakota — only bad clothing.

  3. Robert Bosich Says:

    Calling my friends in South Dakota…they may be too busy to talk….like having the church choir over for Christmas caroling the townies.

    And tomorrow nite….maybe dusting off the FARGO dvd….and settling in with some mulled wine and Scottish shortbread!!

    MERRY CHRISTMAS to you Richard!

  4. econprof Says:

    Mr. Ryder: I work about 100 days a year in Yuma (I have an apartment there), and would like to pay AZ taxes instead of CA taxes. If I upped that by 83 more days, changed voter and vehicle registration to AZ, plus mailing address, etc., wouldn’t I qualify? I have calculated I’d save $15,000 per year in taxes by doing this, making it worthwhile. This is a serious question.