August 10, 2014 | By Jack A. Chambless
This summer marks five years since the “Great Recession” officially ended.For millions of Americans, it probably does not seem possible that our economy has grown for that long. After all, by historical standards, the current recovery is anemic, if not borderline invisible.Sixty months after the last recession ended, the unemployment rate is still well above the 4 percent to 5 percent range we would see in past recoveries. The gross domestic product continues to slog along at a 1 percent to 2 percent growth clip. Nearly half of all Americans are receiving some form of social-welfare income from taxpayers, and the labor-force participation rate — the percentage of Americans working or seeking work — is at a three-decade low.For young people, the news is even worse, with far greater rates of unemployment or total disconnection to the labor force or to a job that matches their education.This latter reality is why this fall I am going to show my students where Williston, N.D., is located; 2,188 miles from Orlando, Williston is a modern-day boomtown that is providing jobs, high incomes and hope to people all over the world.While driving through North Dakota this summer with my family, I decided we would spend a few hours looking around and talking to people who have poured into this remote locale.What I found was Saudi Arabia of the North American plains. Stunning to behold, I looked out upon hundreds of oil wells as far as the eye could see. My family and I saw billboards advertising new-home subdivisions and ads on newly constructed buildings that offered employment to truck drivers, carpenters, electricians and more. Everywhere we looked were new businesses ranging from hotels to restaurants, heavy-equipment dealers, car dealerships and everything else a booming town would need.At the local Wal-Mart, we saw and heard workers of all races and ethnicities. The young man who bagged our items was a young immigrant from Africa. His starting pay? $17.10 per hour. If he offered to work the night shift, he would make $19 per hour.The girl at the window of a fast-food restaurant was from Russia. Starting pay for her? $15 per hour.What, in the name of supply and demand, can possibly lead to two teenagers earning several dollars more than the $10.10 minimum wage that Barack Obama and Charlie Crist desire?It is simple.North Dakota decided years ago that the vast oil reserves under the ground and accessible only by technology called fracking would be fair game to the oil companies willing to come in and get it.Not only did North Dakota decide to allow massive drilling and extraction to take place, but it did so without adding thousands of pages of burdensome, incentive-killing regulations and without hammering property owners and oil companies with Jimmy Carter-era “windfall-profits taxes.”Instead, North Dakota adopted a free-market, private-property-respecting mentality that told the world it was open for business.Today, North Dakota has the lowest unemployment rate in the U.S. at only 2.6 percent. With chronic shortages of skilled — and unskilled — labor, the supply-demand equation is greatly in favor of those willing to supply their labor services to the oil fields, Wal-Mart and the other businesses in this town.Even without a minimum wage of $10.10 per hour, businesses have to pay the going rate or face labor shortages. Without any law, regulation or mandate, the natural forces of supply and demand have led to compensation levels far beyond what many college graduates are pulling down in other places around America.Without any central planning from Washington, D.C., the natural allure of profit has led to all of these entrepreneurs entering a region that has brutally cold winters and few entertainment options.Friedrich Hayek taught the world decades ago that all that is needed for a nation to prosper is for government to allow people to pursue their self-interest, so long as that pursuit does not violate the life, liberty or property of another person.This system is based on the concept of spontaneous order, which means it does not require intelligent busybodies in far-away political capitals to plan and organize and coordinate economic activities. All that is needed is for those we elect to get out of the way by regulating and taxing human beings less, and we will see more Willistons emerge.I hope I can convince some of my students to rent a moving van and chase a realistic American dream.Jack A. Chambless is an economics professor at Valencia College and a senior fellow with the James Madison Institute in Tallahassee.Read the article here.