Gov. Doug Burgum moved earlier this year to end certain weekly benefits for unemployed workers in the state, hoping the controversial decision would help ease North Dakota’s worker shortage.
When it was announced in May (it was enacted in mid-June) there were 18,017 open jobs listed with Job Service North Dakota. Some eight weeks later, there were still 18,000 open jobs.
So was Burgum’s decision wrong?
No, and here’s why: North Dakota’s labor shortage is so widespread and so acute that it was never considered likely that one move would by itself solve the problem. Rather, Burgum’s decision was rooted in the reasonable belief that something — anything — needs to be done to encourage more potential workers to apply for jobs in the state and region.
In the last month, two news stories highlighted the issue.
One, written by Forum News Service, checked in on Burgum’s decision, two months after it was announced. It quoted Landis Larson, president of the North Dakota AFL-CIO, who said the move didn’t have much effect on the shortage, but instead hindered the economy because ending the benefits means fewer dollars flowing into the local economy and supporting businesses.
Larson is right. Without those benefits, there probably is less economic churn and thus less benefit for businesses.
True, but without workers, those businesses will be dead in the water anyway. And maybe Burgum’s decision just hasn’t worked yet.
According to the report by Forum News Service, Job Service North Dakota Director Bryan Klipfel said Burgum’s policy change might, in the end, be good because “every little bit helps.”
And Jeremy Jackson, an economics professor at North Dakota State University, told FNS that Burgum’s plan was sound because "incentives matter" and unemployed residents consider the benefits they can get by staying out of the job market.
Another related problem — affordable child care — continues to grow in North Dakota. Until the state can remedy the high prices and low vacancies found in child care, this growing crisis will continue to hinder the state’s job market.
According to the Grand Forks United Way, child care facilities in Grand Forks are meeting less than half the need. That skewed market means higher prices for care, which incentivizes young parents to stay home rather than to work low- or middle-income jobs.
Meanwhile, the labor crisis continues. A notable casualty came last week on the Minnesota side of the Red River. Sickies, a burger joint in East Grand Forks, announced its immediate closure, citing a lack of workers.
“In this day and age, you just never know with labor and availability,” local Chamber of Commerce CEO Barry Wilfarht said after Sickies closed. “It’s so tough to find workers. There’s just so many factors that it’s a challenge to be in business right now. There’s no question about it.”
It’s too early to say whether Burgum’s decision to cut unemployment benefits has worked. Considering the number of open jobs in the state, it will take more than two or three months to analyze the results.
This other view is the opinion of the editorial board of our sister publication, the Grand Forks Herald.