12 July 2005

North Dakota

Many of North Dakota's counties are losing population to the point that they are returning to "frontier" population density. The Air Force base in Minot, one of the state's major employers, is scheduled to be closed in the latest round of base closings, costing the state one of its largest employers.

There are also some signs that farm subsidies crucial to the state's economy will be scaled back. Federal grain subsidies account for about half of all gross farm income. The subsidy for tobacco is already in the process of being dismantled, and the worst of the remaining subsidies, the cotton payments, is about to be dismantled under pressure from the World Trade Organization. Were subsidies for corn, wheat and soybeans follow that trend, the state's farm sector would have to be radically overhauled.

As it is, North Dakota is full is hamlets that exist for no reason other than that they have been around for a hundred years.

What is to be done? Should the state try to lure in replacement industries, or should it simply be content with a smaller economy and a smaller population base? North Dakotans, of all people, know that being big isn't everything. The state has always been a small state at the fringe of the national economy. There is nothing inherently wrong with having an economy based on a quite small number of very geographically large farming operations, so called corporate farms. Maybe this is an opportunity for the nation to reinstate a fairly decent chunk of the open range that was there before homesteading for horticulture became the norm.

On the other hand, in an era where a state's skill base is more important than its geography, North Dakota is a fairly well educated health community. This could also support all manner of industries. It is stymied in this, however, in part because it is small. Managerial professional couples want places to live where both members of the couples can have jobs, which are scarce in North Dakota, and often want cultural amenities -- art theaters, opera, shopping, and more that it simply can't offer. The very traditional orientation that keeps the state cohesive and low in crime, also discourages the kind of innovation that creates growth.

While North Dakota likely has factions in favor of both approaches, I think it is likely that the status quo of downsizing the state is likely to be the course followed. The Minot base closure will likely make North Dakota the only state in 2010 with a significant decline in population, as base residents and the many who support those residents in the community are forced to move on and don't find replacement jobs within the state in large numbers.

When it does so, it will lead a trend, of rural reorganization and downsizing, just as significant percentagewise, as the decline in the manufacturing sector, but less noticed because the impact on the total economy has been much smaller.

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