While numerous states, including Michigan, Florida, California, Nevada and others struggle with double-digit unemployment, other regions face unemployment rates below 5%. North Dakota is currently the most employed state in America with only 3.3% of residents unable to find work. The other states include Nebraska (4.1%) and South Dakota (4.7%). Throughout the last decade, these states have maintained a significantly lower unemployment rate than the national average. With 9.2% of the national workforce out of jobs, it is worth looking at what drives employment in these states. (For more on unemployment, check out The Unemployment Rate: Get Real.)

TUTORIAL: Economic Indicators

North Dakota
Despite having fewer per capita college graduates than the national average, this Midwest state sports the lowest unemployment rate in the country. Petroleum, food processing and agriculture are the keynote industries which drive a substantial portion of region's growth. Additionally, North Dakota was impacted much less by the recent economic downturn as financial institutions maintained minimal exposure to subprime mortgages and the state government was diligent in maintaining a healthy, balanced budget. Continued innovation in the oil gas industry, particularly in shale fracking, has provided a natural stimulus to North Dakota's job market. According to the American Petroleum Institute, the oil and gas industry delivered $476 billion in benefits to the American economy last year, much of it in the form of job creation.

Warren Buffet's home state is heavily reliant on its agricultural, freight transportation, manufacturing, telecommunications and IT sectors. Although Nebraska's stable economy provides comfort and benefit to most people, those who are unemployed actually find themselves in a worse situation than residents of other states. Nebraska, among the other high employment states of North and South Dakota and New Hampshire qualify for only two of the four available tiers of extended benefit programs. As a result, unemployment benefits are offered for only 60 weeks here, while states which are categorized as Tier 4 (Nebraska is Tier 2), offer benefits for up to 99 weeks. Not to pick specifically on Nebraska, but these are actually common problems in all the states with the lowest unemployment rates. Perhaps these weaker benefit programs is among the factors which encourages people to find work, even if at a lower wage.

South Dakota
Similar to its northern neighbor, South Dakota enjoys a consist level of healthy employment levels, with current unemployment rates at arguably natural levels. Workers are able to find jobs in a wide variety of growing industries ranging from service, government, agriculture and national defense. Following the service sector, Ellsworth Air force Base is South Dakota's second largest employer. Favorable regulation toward the financial industry has been a prime catalyst in attracting financial institutions such as Wells Fargo and Citibank to designate their head office location in the state. South Dakota does not have a maximum allowable interest rate banks can charge on credit cards issued around the country. Overall, South Dakota offers a very attractive business environment, including the lowest taxes in the nation, to maintain a steady employer base. (With low taxes South Dakota has become a nice home for small businesses. For other states similar to South Dakota, see Where Should Your Small Business Incorporate?)

New Hampshire
Although New Hampshire has a slightly higher unemployment rate of 5.2%, a similar problem exists here as the aforementioned states; since almost everyone who is willing to work is currently employed, small business owners often find it very difficult to find suitable employees for vacant positions. Tourism, agriculture and manufacturing are the leading employment drivers within the New Hampshire economy. New Hampshire even holds the historic record for the state with the lowest unemployment in a given month. Set in May 1987, only 2.1% of residents actively looking for work were unsuccessful. With an ideal geographical position, the state is gifted with nutrient rich soil to support healthy farming operations and a mountainous landscape which attracts skiers and hikers alike.

The Bottom Line
There are a few general lessons which can be learned from these states regarding the dire unemployment situation prevalent in the United States. Most importantly, areas which offer incentives to businesses will attract jobs; whether these incentives come in the form of business tax relief of less regulation is up to the politicians and economists to decide. Secondly, as Kentucky senator, Paul Rand, might suggest, cutting unemployment benefits may encourage people to stay off the unemployment list. Of course, such action would best be implemented during an economic boom when jobs are abundant. Finally, as in the case of New Hampshire, sometimes a low unemployment rate is simply the product of a advantageous physical environment. (For more information about unemployment around the world, read Countries With The Lowest Unemployment Rates.)

Related Articles
  1. Investing Basics

    Why Interest Rates Affect Everyone

    Learn why interest rates are one of the most important economic variables and how every individual and business is affected by rate changes.
  2. Economics

    Investing Opportunities as Central Banks Diverge

    After the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
  3. Economics

    Understanding Donald Trump's Stance on China

    Find out why China bothers Donald Trump so much, and why the 2016 Republican presidential candidate argues for a return to protectionist trade policies.
  4. Stock Analysis

    4 Key Indicators That Move The Markets

    Educated investors need to keep their finger on the pulse of the economy, and watching certain indicators is a good way to do that.
  5. Investing

    World Bank Data For Dummies

    Developing countries can't always afford to track the data crucial to setting the right economic policies and programs. That's where the World Bank steps in.
  6. Economics

    Explaining Devaluation

    Devaluation is the deliberate decrease in one county’s currency relative to the currency of other countries.
  7. Investing

    Is US Inflation Too Low?

    One reason the Fed has delayed its first rate hike: U.S. inflation has been persistently running below the stated 2 % level the central bank seeks to target.
  8. Investing

    2 Investing Implications of Higher US Rates

    While U.S. economic data continue to come in mixed, the numbers still point to decent U.S. economic growth.
  9. Markets

    Hillary Clinton Promises Free College and Higher Wages

    With income inequality on the rise, Hillary Clinton is running on raising the minimum wage, raising middle class wages, and providing free or low-cost college education.
  10. Forex

    How CPI Affects the Dollar Against Other Currencies

    The Consumer Price Index is a broad measure of inflation, and inflation can have a dramatic impact on a currency's value against rival currencies.
  1. How do you make working capital adjustments in transfer pricing?

    Transfer pricing refers to prices that a multinational company or group charges a second party operating in a different tax ... Read Full Answer >>
  2. Marginal propensity to Consume (MPC) Vs. Save (MPS)

    Historically, because people in the United States have shown a higher propensity to consume, this is likely the more important ... Read Full Answer >>
  3. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  4. When has the United States run its largest trade deficits?

    In macroeconomics, balance of trade is one of the leading economic metrics that determines the trading relationship of a ... Read Full Answer >>
  5. Which is more important to a nation's economy, the balance of trade or the balance ...

    There is no question the composition of a country's balance of payments is more important than its balance of trade. This ... Read Full Answer >>
  6. What are the ethical arguments against government subsidies to companies like Tesla?

    The ethical argument behind government subsidies is that they should be put into place to help industries that will, in turn, ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  4. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  5. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  6. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
Trading Center