North Dakota’s Tiny Unemployment Rate Explained

Amidst a nation awash in unemployed workers, the state of North Dakota is about as close to full employment as is possible.

North Dakota State Capitol

So, a legitimate question is  “who are the 3.5% unemployed”?

An good answer comes Teri Finneman of the Grand Forks Herald in response to a reader’s question:

A. I contacted Michael Ziesch at Job Service North Dakota. Here’s what he said:

“We indeed have a very low unemployment rate. But there will always be some unemployed in an economy.

“In North Dakota’s case, much of this unemployment would be ‘frictional.’ It’s unemployment that may be voluntarily based. It occurs as workers transition between jobs. It may also include new entrants (recent graduates, persons just turning employment age, folks moving to the state, etc.) into the labor market who have not yet taken positions.

“Another large component are ‘seasonal, or work-attached, unemployment.’ These are workers whose employers lay them off for short periods of time every year. The easy examples are folks in many components of agriculture, construction, manufacturing, etc. They undergo periodic unemployment waiting for recall.

“In an economy the size of North Dakota’s, there will always be unemployment … and the definition used for being ‘unemployed’ is pretty strict. You need to be out of work but actively seeking work. So, it does not include discouraged workers (those who may feel nothing is available to suit them) and also those persons who chose not to be in the labor force at the time (retirees, pure students, stay-at-home caregivers, disabled persons).”