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North Dakota sees job gains, but are they due to tax cuts?

Rep. Kevin Cramer, R-N.D. Rick Abbott / The Forum

With some data showing North Dakota added about 9,000 jobs last year, Sen. Kevin Cramer is crediting federal tax cuts implemented in late 2017 for the gain.

But a UND economist says the number of new jobs is too small and too broad for any correlation to federal policy like the one Cramer, R-N.D., referred to in a tweet on Wednesday.

"The tax cuts are working in North Dakota," Cramer wrote on Twitter. "Since they were passed, we've added over 9,000 jobs."

North Dakota added about 8,300 jobs between December 2017 and December 2018, according to a report from Job Service North Dakota while the federal Bureau of Labor Statistics said the number was nearly 9,000.

Cramer's office confirmed the Senator was referring to a BLS report.

"I wouldn't sit there and say that tax cuts were a major or primary factor driving the internal dynamics for North Dakota for a variety of reasons, but first and foremost is that there's one key economic driver right now, and that's energy," said David Flynn, department chair of Economics and Finance at UND.

An employee with Job Service North Dakota said Thursday an increase in mining employment, including oil and gas extraction, is due to favorable oil prices. The agency didn't acknowledge the impact of any federal policies on North Dakota employment. "In the past, construction employment has been correlated with activity in the oil and gas industry (e.g. building pipelines, well pads, etc.), which is likely the case now," Craig Koch, a labor market information research analyst at Job Service, said via email.

"There (have been) some environmental regulatory changes. There was some relaxing of some of these things that occurred," Flynn said. "The Trump administration has attempted repeatedly to influence oil markets through diplomatic means. So the outcome of that has generally been some favorable moves, as far as the domestic oil industry in concerned."

Most job gains were in mining, logging and construction, where the Job Service report said employers added about 5,800 jobs between December 2017 and December 2017.

The state has also noticed slight hikes in jobs relating to professional and business services, educational and health services and leisure and hospitality.

North Dakota has also long been in a labor shortage, Flynn said, referring to another report Job Service releases regularly sharing the number of unfilled positions across the state.

"The fact (is) that we have typically had more open jobs than unemployed people fulfilling them," Flynn said. "If every unemployed person decided to take one of these jobs, we'd still have open positions."

Cramer was unavailable for comment but his office emailed a statement from him.

"I voted for the Tax Cuts and Jobs Act in 2017 because I'll always support pro-growth economic policies that empower taxpayers and get more money in people's pockets, and they have already delivered," Cramer said. "Our state has added over 9,000 jobs, with North Dakotans receiving the largest average tax reduction in the nation."

"It's this 'post hoc ergo propter hoc'—after the thing, therefore because of the thing," Flynn said. "You're looking at it and saying, 'Well, we cut taxes, and that's going to be the driving force.' ... Yes, employment is up around the country, in general, but you know, 8,300, even for a state like ND, is not really something I would sit there and say 'Oh this is obviously because of the tax cuts."

The upward trend Job Services reported in January had been the first in three years, with North Dakota seeing a drop in jobs from December 2015 to December 2017.

In January 2017, Job Service reported the state lost 6,200 jobs between December 2015 and December 2016, not seasonally adjusted.

From December 2014 to December 2015, North Dakota lost 19,000 jobs, not seasonally adjusted.

Emily Allen

Allen joined the Grand Forks Herald to cover local government and politics May 2018. Call her at 701-780-1102, email her at eallen@gfherald.com or follow her on Twitter, @Emily_theHerald.

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