North Dakota really needs workers. Why doesn't the state offer cash to move here?
FARGO — Cities and states around the U.S. are offering incentives — including cold, hard cash — to prospective residents in an effort to attract employees in a tight workforce, but North Dakota's constitution may keep the state from doing that.
There are more jobs available than there are unemployed people to fill them in the U.S. and North Dakota, a rare phenomenon for the country, Gov. Doug Burgum said.
Job Service North Dakota listed 12,178 openings in January, compared to about 10,600 residents who are considered unemployed. Listing job openings with the agency is voluntary, and companies may not list every single job they need filled, Burgum said. The state believes there are as many as 30,000 jobs available, he added.
More than 6 million Americans were unemployed as of November, compared to 6.9 million job openings, according to the Bureau of Labor Statistics. “If someone wants a job, they can find a job,” said Carey Fry, customer service manager for Job Service in Fargo.
In this competitive environment, city and state leaders around the country have gotten creative in attracting workers.
Last fall, Tulsa, Okla., announced it would pay $10,000 to people who moved to the city to work there remotely, thanks to a donation from the George Kaiser Family Foundation.
The offer attracted headlines and more than 10,000 applicants in a matter of weeks, the foundation confirmed. The application process was eventually closed because of “an unbelievable response to the program,” according to the group’s website.
Vermont implemented a remote worker program similar to Tulsa’s, offering $10,000 last year to 100 people.
Closer to North Dakota, the Economic Development Authority in Harmony, Minn., will give up to $12,000 to anyone who builds a home and lives there. Moorhead offers several programs, including a two-year property tax rebate and a free recreational pass for a year to those who build new homes.
So why doesn’t North Dakota offer incentives or straight cash to attract new workers?
Well, it turns out the state constitution says the state and its political subdivisions cannot "loan or give its credit or make donations to or in aid of any individual, association or corporation except for reasonable support of the poor." It’s what prevents the state from issuing oil-revenue checks to residents like Alaska does, Burgum said.
“There probably would be a legal challenge, giving people straight cash,” he said, basing his interpretation on the views of the North Dakota Legislative Council and past state officials.
Even if it wasn’t in the constitution, the practice probably wouldn’t make good policy, Burgum said. People may only stay for the money until it runs out, prompting them to leave.
Workers have the opportunity to pick where they live first and where they work second, Burgum said. To stay competitive, he believes North Dakota should have “high-performing educational systems” and vibrant communities.
“Before you even get to incentives, if we don’t have communities that people want to live in, we’re not going to be attracting the workforce,” he said. “If you don’t have the two foundation things (education and vibrant communities), then you’re not in the game at all.”
The largest industry in the state is the health care and social assistance sector, which had more than 64,000 jobs in mid-2018, according to Job Service.
Cass County, where the health care sector employs roughly 20,000, is home to Sanford Health, the largest employer in the state, according to Job Service data. Of its nearly 30,000 employees, Sanford has more than 8,900 workers in the Fargo-Moorhead area. That's 900 more than it had in the metro area in 2015, the health care provider said.
Sanford uses incentives and competitive wages to attract workers, and is involved in the community to make it an attractive place to live, said Brittany Montecuollo, vice president of nursing and clinical services for Sanford Fargo.
“I don’t think that there will ever be a day where we will not have positions posted for nurses or medical positions,” Montecuollo said. “In order to stay ahead, we are in a state of constant recruitment.”
Companies are being forced to pay more to attract workers, and sometimes offer their own incentives, Fry said. North Dakota’s average wage as of mid-2018 was $24.65 per hour, or an annual salary of $51,172, according to Job Service. More than 50 percent of the open jobs reported to Job Service paid at least $20 per hour, while about 14 percent paid less than $15 per hour.
“Employers are doing, I think, what they need to do to attract workers,” she said. “Employers are not really getting away with not paying very well. Those people who are paying less than $10 an hour are having a hard time finding employees.”