The Minneapolis Fed has analyzed unemployment and wage rates in North Dakota and surrounding states and have discovered – eureka! – that there is a definite ripple effect that extends outward for hundreds of miles. They even have a graph showing their results:
Weekly wages in the Bakken oil fields have risen by an amazing 140% in just the last decade, while unemployment has dropped to under 2 percent. The impact, however, isn’t limited just to the immediate area. As far away as Rapid City, South Dakota, unemployment is dropping and wages are rising (albeit more slowly than unemployment is dropping).
The farther away from Bakken, however, the more other more local factors are felt:
As distance increases, many other factors likely explain wage gains or unemployment rates relative to distance from the Bakken. For example, more agriculture-intensive counties are also benefiting from the strong farm sector.
Just imagine the impact in California, for example, if the greenies there would like developers explore the newly discovered oil shale opportunities there. And if the greenies relent and let Colorado develop its resources, the same ripple effect would like occur.
Come to think of it, wouldn’t this happen all across the country, if governments (national, regional and local) would just get out of the way?