North Dakota’s oil and energy boom has kept the state’s economic outlook bright — but it also has the tightest labor market in the country.
“So much of what is driving the economy is hyperlocal right now,” said Gusto Economist Luke Pardue. “For North Dakota, it's drilling or fracking. Delaware is being driven by professional services and financial services. It speaks a lot to the different areas that are better or worse prepared for a potential economic downturn.”"I would still call it incredibly tight compared to historic standards," he said.
Pardue stressed a state having the tightest labor market did not translate into having the best economy. Some states had tight hiring markets because economic growth outpaced their population growth. In other cases, an exodus of people meant there were simply not enough workers, which is bad for the economy.
But while a state’s economy might not be a big predictor of labor market tightness, that tightness, no matter the cause, does mean business owners will have a harder time hiring and will continue to deal with some tricky questions on pay. Idaho saw wage growth year over year of 9.1%, while Illinois saw just 1%, according to data from Gusto.
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