Why is Upper Midwestern unemployment so low?

The Star Tribune reported last week that Mankato “has the lowest unemployment rate forany metro in U.S.” So it does, as Bureau of Labor Statistics data show. The Star Tribune reported that Mankato:

…is one of six cities in the state or on its border that were among the 20 best for jobs this fall.

Coming in at an ultra-low 1.3%, Mankato was at the very top of the U.S. Bureau of Labor Statistic’s list of metro areas with the lowest unemployment rates for September. Figures for October will come out next week.

The entire state of Minnesota came in at a 2.1% unemployment rate for October, tying with Utah for the No. 1 spot among states. Minnesota has been on top since June, when it recorded the lowest state unemployment rate in U.S. history of 1.8%.

In September, Rochester, with an unemployment rate of 1.5%, was tied for having the fourth-lowest jobless rate in the U.S. with Sioux Falls, S.D., and Jefferson City, Mo. St. Cloud came in at No. 11 with a jobless rate of 1.7%.

The Twin Cities made the list, too. With a jobless rate of 1.9%, it was in a six-way tie for No. 19.

Fargo (1.4%) and Grand Forks (1.6%) — cities in neighboring North Dakota whose metro regions include towns in Minnesota — also made the top 10.

The Star Tribune asks: “So what’s going on in these Minnesota cities that have brought their unemployment rates so low?”

But is this the right question? As the data — and the Star Tribune‘s report show — this is a regional phenomenon as much as a state one. Both of South Dakota’s MSA’s — Sioux Falls and Rapid City — have unemployment rates below 2% and rank 4th and 19th nationwide, respectively. Both of North Dakota’s MSAs crack the top 10 nationwide. Perhaps we should be asking, “what’s going on in these Upper Midwest cities that have brought their unemployment rates so low?”

This is a point I have noted before: despite wide variations in state economic policy across the Upper Midwest, we see very similar outcomes on a number of measures, employment being one. What other factors, common across these states, could be driving these outcomes?

Answers on a postcard…