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It is better
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November 22, 2002) - Eve since we saw the movie, we've wanted to write a piece about Fargo, North Dakota. (Remember, this was the only movie to come close to Sling Blade for dinner time accents.) 

It turns out that Fargo is going to be 2002's poster child for the labor shortage. Years of solid recruiting of business and labor to the town resulted in the simultaneous growth in the local labor supply and decrease in the unemployment rate.



(The dashed blue line is the trend, the red line is the actual weekly figure.)

With unemployment peaking at 2.8% and averaging 1.9%, it is basically impossible to fill new jobs in the Fargo economy. Business growth in local plants now carries an extreme penalty and replacing workers who have "attritted" is essentially impossible. Fargo, which has a relatively young population, does not have the ability to lose even one of the people who are of retirement age. Nor can it afford to let any of its young people leave home.

For Fargo, the situation is bleak and getting bleaker. Like gypsies, the companies that can will move on to markets with a better supply. As the first example of regional growth that was halted by the labor shortage, the town stands a chance of being remembered as the first domino. (As companies begin to migrate towards deeper labor supplies, there is every chance that they will, unthinkingly leave  trail of Fargos in their wake.)

As early as spring 2000, the area was studied for labor force demographics by the University of North Dakota. Even though the study clearly found only 2,500 potential new employees who wouldn't need to be recruited from other jobs, no flag was raised by the survey. The study itself, however, suggests the level of investigation that is possible. CareerlinkNorth (Alexa ranking: 779,114) appears to be the sum total of the region's efforts to attract new workers (someone should tell them about traffic development).

Sadly, the overall regional response is predictably paltry. Solving workforce problems is not a government longsuit nor should it really be expected to be. Our bet is that no local government is liable to manage the labor shortage very well. So, in the early days of the game, some companies will migrate to greener pastures. Those pastures will experience problems leading to the next wave of migration and so on. It's really the first time that we've clearly understood that some people will be forced to move with their companies or in pursuit of work as a result of the shortage.

For the weekend, we leave you with the following questions. Is your region in similar circumstances? How do you know? Is your company at risk? When?

-John Sumser

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Materials written by John Sumser © TwoColorHat. All Rights Reserved.
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