Saturday , July 24 2021
Home / David Flynn: Barter is Evil / MSA Wage Gaps In ND (Episode V)

# MSA Wage Gaps In ND (Episode V)

Summary:
Call me a glutton for punishment, or at least a glutton for calls and texts coming in when I am on the radio challenging, you know, the data. Wages in Grand Forks is a big deal. I hear it from people as I walk around my neighborhood. You can tell by the number of stories written about it. Being a big story does not make it an easy explanation though. Wages in Grand Forks lag the other metropolitan statistical areas (MSAs) in North Dakota across many different categories. The graph below give a look at the mean level for wages across different categories in 2020 for the Bismarck, Fargo, and Grand Forks MSAs. Just a note, some of the observations were close enough I used a jitter to move the data horizontally around the while lines which represent the categories. There was no vertical

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Call me a glutton for punishment, or at least a glutton for calls and texts coming in when I am on the radio challenging, you know, the data. Wages in Grand Forks is a big deal. I hear it from people as I walk around my neighborhood. You can tell by the number of stories written about it. Being a big story does not make it an easy explanation though. Wages in Grand Forks lag the other metropolitan statistical areas (MSAs) in North Dakota across many different categories. The graph below give a look at the mean level for wages across different categories in 2020 for the Bismarck, Fargo, and Grand Forks MSAs. Just a note, some of the observations were close enough I used a jitter to move the data horizontally around the while lines which represent the categories. There was no vertical jittering as that would actually change the wage levels. In some cases one of the MSAs might not report a wage figure. This is often for privacy concerns.

There are many categories where Grand Forks is behind the other two MSAs though it clearly is a leader in some, at least at the average. Now I usually say it on the radio so I should write it here: the totality of the distribution really matters. Averages can hide important distinctions, especially in a situation like this. For that reason I also created graphs with the 10th and the 90th percentiles for wages across these categories to see if anything interesting came out of the low end of the distribution or the high end.

At the low end of the hourly wage distribution it does not appear that Grand Forks is really that much more competitive. Some of the categories are actually more spread out than the average which I why I mention the complete distribution as an important factor. I will highlight one though, the “production occupations” category. Grand Forks was middle of the pack for the average, but is the highest of the three on the low end of the scale. That is interesting for a few reasons. We can infer for some of these categories that lower end of the pay scale (the 10th percentile) is highly correlated with a newer hire or less experience. Grand Forks seems to be paying better in some of those occupations than the other MSAs, but that does not persist into the 90th percentile.

At the higher end of the hourly wage scale we see Grand Forks underperforming the rival MSAs in many categories, even those it was leading at the average or the 10th percentile.

At some level the numbers speak for themselves and we need to let them. The fact is the data seem to hold up with the perception of many of the texters and callers over the years. What these data do not tell us right now is a way forward. For starters, you do not want to be known as a “low-wage” community. That is the perception around Grand Forks but the data tell a different story in some pretty nice sectors to emphasize. The brief “deeper dive” here presents some other questions. Higher pay at the low end of the distribution with lower pay at the high end of the distribution suggests a need for context or more data. Are there fewer high paid people running a firm and a constant flow of inexperienced people coming in, learning the ropes of the job, and then moving on? That is not a bad thing for a community in many ways, if that is actually what is happening. There are clear drawbacks though, as people expect to leave within a shorter time span there may be little interest in community issues, family formation, and other activities that are also part of a healthy, vibrant city.

These were just the major categories from the BLS wage data. There are a host of smaller occupation breakouts we can look at for the purposes of comparison. Wages are a good start in terms of a data-informed discussion, but we also need to know about the businesses themselves. What would be want to know? What is the nature of the production process and labor plan followed by the businesses? What is the level of profitability for the business, with particular insights into the current profit margin? These two things would give policy authorities important greater insights into the feasible set of options. That of course and maybe an answer to the question, “What is Grand Forks?” But that is another post.