As I consider the current state of the North Dakota economy as well as the economic outlook, I continue to think about labor market issues. Last week on the radio the discussion of wages resonated with the audience, and is obviously a key factor in relieving labor constraints. Realistically, internal demographic issues (low birth rates, outmigration, etc.) and environmental issues (North Dakota winters tend to be cold) could be resolved by appropriate levels for wages. The precise amount of compensating differential is not my target right now, I am just recognizing that such a circumstance could exist.
I argued before that North Dakota is labor-constrained. My thinking on this went through multiple iterations, and I continue to try and refine this. In particular the data to demonstrate this most clearly just may not exist at this time, but I continue to pursue it. Here is the state of wages from Q1 2017 by county in North Dakota.
I was asked about the path of sales tax collections in Grand Forks recently so I took to my trusty computer and made a graph. This looks at the rolling total tax accumulations by month for each of the last five years. There is a great deal of clustering for these years, but 2017 looks to be on track for one of the lowest years.
With the debt ceiling issue shelved (temporarily, I mean three months is no time at all) most eyes turn towards tax policy now. There are enough games played regarding language right now, “Tax reform” v. “Tax relief” v. “Tax cuts”, that it would seem we are in for an extended debate, or a really long argument. With leadership apparently content to draft plans outside of the committee process there seems to be little chance to quell discontent from within their own party.
I testified in front of the state legislature forecast committee at the end of July and gave my feedback on proper process improvement North Dakota could, and should, make. Each of the items I mentioned could be an entire discussion on its own which makes testimony under a time limit a bit of an issue. And then I realized, I have a blog, so I can extend my thoughts as needed. The first point to discuss further is forecast horizon.