Kenmare ND - Upside Down Under

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Upside Down Under

By Marvin Baker, a new weekly column in The Kenmare News

 

The state's economic engine

Posted 9/18/18 (Tue)

Over the years, the city of Fargo has received a bad rap for various reasons, including money that was spent in the community.

The city is too big, they got Minnesota right there, oil country is doing just as well, a major city is nearby and there’s even a rumor out there that suggests Fargo’s growth is attributed to the success of the university football team.

Two of those items are true. Winnipeg is 180 miles north and Minneapolis is 220 miles southeast.

You can spin it anyway you like, but Fargo is doing something right in continuing to create jobs and attract young people.

And if you consider the economy only, there are a lot of moving parts in North Dakota’s largest city.

Two Interstate highways intersect, there’s major retail shopping, it’s a major farm market, you have successful sports teams in the Red Hawks and the Bison, medical facilities serve three states and two provinces, Fargo is home to the state’s only Air National Guard unit and yes, there is a major university there that is responsible for a portion of Fargo’s overall economic success.

Since 1999, Fargo has been the state’s economic engine, and that’s not just a columnist’s opinion, that’s proven through taxable sales and purchases statistics.

With the exception of 2013 and 2014, at the height of the oil boom, Fargo has led the state in sales and purchases for at least the past 20 years. Williston edged out Fargo in those two years.

What’s really interesting about this, is that in the past 20 years, Fargo’s economy has been very stable, while economies in the other four largest cities have fluctuated up and down, sometimes substantially since 1999.

To give you an example of this, Fargo sales and purchases in 1999 totaled $1.5 billion, while the next closest, Bismarck was $8 million.

In 2000, it was nearly identical, in 2001, it went up to $1.6 billion, likewise in 2002. Then in 2003, it jumped to $1.7 billion and basically continued on that trend until 2013 when Fargo reached $2.7 billion in sales and purchases while Williston hit $3.4 billion.

In 2014, Fargo’s numbers went to $2.8 billion while Williston increased to $3.7 billion. By 2015, Fargo was back ahead of Williston by $5 million and in 2016, there was a $1.6 billion difference.

Fargo’s economy actually lost $2 million from 2016 to 2017 and Williston’s increased by $3 million.

But again, Fargo’s numbers have remained stable all these years with slight increases most likely due to inflation.

To make it even more interesting, West Fargo is independent of Fargo and is now the fifth largest city in North Dakota, so if you add West Fargo’s numbers that most often parallel Williston’s numbers, the money spent in the Fargo metro balloons by 50 percent in some years.

There’s also another element here that isn’t often discussed and Fargo is most often the greatest benefactor. It’s the Canadian dollar, or “loonie.This doesn’t happen by a stroke of luck, but did in the early 1990s when Canadian Prime Minister Jean Chretien initiated the controversial goods and services tax.

When that happened it was like flood gates opening with people all over southern Manitoba headed to Fargo to shop. Many stopped in Grand Forks as well, but Fargo’s retail and hospitality was booming with the loonie alone.

For at least four years, the Canadian dollar spent in Fargo, represented numbers reminiscent of Minot’s total sales and purchases.

At that time, leadership in the city of Fargo, as well as the convention and visitors bureau, saw an opportunity and that was to cater to Canadian customers because they knew the great influx wouldn’t last forever.

And yes, it tapered off but as time went on, Fargo began creating other incentives that remain to this day, as well as some new ones that come and go.

Minot, which has had the same opportunity, hasn’t catered to Saskatchewan’s population, but instead counts on a basic number of Saskatchewan residents to spend money in Minot.

In the past five years, license plates from Alberta have been increasing in the northwest and many of those people bypass Minot to go to Fargo where financial incentives do exist.

There’s no doubt, Fargo has done something right. Just because it’s the state’s biggest city, doesn’t mean everyone can rest on their laurels.

These people are working hard to make Fargo a booming economy. I think the rest of us could learn something from this.