http://www.fargomonthly.com/blog/boom/
$44,564 – The average annual wage in Fargo, according to Job Services ND. The average for North Dakota is $49,088. The national average is $42,979.
121,017 – The civilian labor force in the Fargo metro area as of June 2013, according to Job Service ND. There are 4,344 unemployed people creating an unemployment rate of 3.6 percent.
6,713 – Number of Fargo jobs advertised online as of Aug. 11, 2013, according to Jobs Service ND.
87,347 - The total number of employees in Fargo, according to Jobs Services ND.
Add in the fact the cost of living is probably the lowest in the country and you have a great recipe for success, even for people who have been unemployed for a long time. If I had been unemployed for a while, Fargo would be the first place I would start looking.
So when these 16 million people move to Fargo ND (a solution costing billions of dollars - just for the move!), there's going to be jobs for them, right?
This is like responding to "hunger crisis in Africa" with "I saw a french fry on the park bench over there".
How so?
Say we have a town that has had a steady population levels of around 50,000 people for about ten years. Now suddenly they have a sudden influx of 10,000 to 20,000 people in a few months time.
Local government services would be immediately strained. For instance, suddenly there's a few hundred to thousands of new students that they somehow have to find room for. That means rooms, supplies, teachers, staff, and so on. Your kid was getting a good education when it was twenty a class, now it's forty a class. Unless they had the foresight to plan for that they don't have the money. For the next budget year they have to raise taxes to afford the new stuff they need. This really sucks for the people who have been there the whole time and haven't necessarily seen a raise in their pay because they aren't involved in the boom.
Wear and tear on infrastructure is suddenly much worse than normal requiring more frequent repairs ruining the established schedules and budgets. They have to raise taxes to cover the new costs.
Housing becomes premium. That house next door your son was thinking of buying with his new wife so you could help raise the grandkids? Can't afford it. Small apartments that used to be $500 are now $1000 or more. New cheap apartments and houses get put together as quickly as possible to meet demand. These will start to degrade around the time the boom starts to decline of which the community will have to deal with.
More crime that the small local police force that's accustomed to dealing with people they know will somehow have to find a way to deal with it all. Will need to hire more officers they don't have the budget for.
Restaurants are happy about the new business until they realize they need to hire new staff at much higher pay than before. Why work as a busboy at a buck over minimum wage when they can go out to the fields for three-to-four times (or more) than that? Suddenly a low paying job must pay a great deal more to get anybody to apply. That's good right? Until you realize the restaurant raised its prices so that the $5 sandwich you really liked is now $9.99 with no drink.
Since house prices have gone up that most likely means your property tax bill will be higher the next time its due. Granted, depending on local laws.
So, let's say a few years have gone by and somehow our little town has managed to deal with all these new and strange challenges they found themselves with. Then the boom goes away as they often do.
More infrastructure than they really needed has been slapped together as fast as possible and now needs to be maintained because it exists.
Now we need to start firing local government people because we no longer require them and the tax revenues are reducing because the boom has busted. Suddenly large number of people needing jobs that don't exist.
People who got the restaurant jobs at inflated pay will never leave because now they have the best jobs in town. The restaurant has to fire them anyway because they can't afford them since no one can afford the food now. These people won't be happy about going back to a buck over minimum in this type of job.
People are leaving town because no one can afford the over-priced housing and apartments which is currently all falling apart because they were cheaply made. By the time the pricing becomes affordable everybody's moved away. Now you have abandoned housing that's ripe for even more crime.
And I could easily think of more but I'm getting long here.
I admit that much of this is worse-case scenario type stuff but it's all possible without planning to deal with it. I personally seen some of these things happen in big cities that had the housing booms. The same thing happening in a small town would not go over well.
But picking up and moving is not an easy thing, especially with family. Speaking from experience by moving my family to three different states spread across the lower half of the US because of work, moving can be a difficult and expensive thing to do. Most of our current debt is due to moving.
http://news.ycombinator.com/item?id=5072755
P.S. The cities in Minnesota mentioned in the article that was submitted to open the thread are not particularly close to North Dakota and are not tied to the petroleum economy. They are college towns and rather pleasant to live in.
I wouldn't be surprised if Minnesota's economy was experiencing at least partial boom due to North Dakota in any case. You have tons of weekend warriors who drive 6+ hours a day routinely that aren't afraid to drive 6 hours to civilization, and even though the oil fields have infrastructure, they're still sourcing it from wherever they can get it.
- Lack of motivation/initiative. It seems far away, it seems risky, etc.
- Afraid of the cold
How would an unemployed person find out such a thing? His nearest social circle would likely not know such a thing, and this is not the sort of thing you randomly find out.
Just because you're unemployed doesn't mean you're stupid or illiterate. They can find things out by searching the web, just as we would. If they can't afford their own internet access, they can get it for free at the local library.
Source: I live near the oilfields in AB.
https://www.google.com/search?q=fargo+nd+cold&oq=fargo+nd+co...
That might be hard to scrape together if you're unemployed and living with parents.
1 - http://www.nytimes.com/2013/01/16/us/16women.html?_r=0
2 - http://www.foxnews.com/weather/2013/12/05/new-cold-snap-prom...
Housing availability is the big killer, plus lack of experience with a place that can -40F in the winter before windchill and 100F in the summer[1]. Going with the lack of housing is an overloaded infrastructure (water, sewer) that is being built up as fast as it can.
[edit] Also, a lack of people trained in the vocational skills needed for work in the area.
If I had the cash[2] I would try two things. I would probably build a combo capsule hotel, drug store, and laundry mat in the area (for single folks).
For a second thing, I have been fascinated with using pre-fab modules (think cargo container-ish) with standardized utility hookup that could be plugged into a shell building. Build a couple of building down the oil fields and see if the containers migrate.
1) this does play hell with the vehicles. I wrote a grant 20 year ago that included the stats on that and car maintenance given income. It was an interesting combo.
2) we are talking $$$$ millions