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Nebraska Economic History


Nebraska economy
Nebraska economy

Since its early settlement in the mid-19th century, Nebraska has had an economy based on agriculture, specifically the raising of livestock and the growing of corn (for feed) and wheat. During the 1930s the economy suffered from the effects of the Great Depression and an extended drought. Widespread use of irrigation wells in the second half of the 20th century has been responsible for the increased area of farmland under irrigation. Although farming is still extremely important, services and manufacturing have expanded rapidly in recent decades. Nebraska, the home to many national insurance companies, receives an unusually large share of its gross state product from the finance, insurance, and real estate sector.

In the early and mid-1980s Nebraska suffered through its worst agricultural crisis since the Great Depression. As in other farm depressions, many farmers had taken large loans to purchase land and modernize operations and were driven into bankruptcy when crop prices dropped and land values fell. Many farmers lost their land, and some banks with extensive farm loans followed them into insolvency. The metropolitan economies of Omaha and Lincoln escaped the worst effects of the farm crisis, but rural areas, heavily dependent on farming and farm-related business, suffered. By the late 1980s the economy began to recover. To further promote growth and recovery, the state in the late 1980s adopted a package of tax incentives to provide new and expanding businesses with income tax credits, sales tax refunds and credits, and in some instances personal property tax exemptions.

Although large, older Omaha-based companies continued to influence the state’s economy, new smaller companies scattered across the state in the telecommunications, insurance, health care, and tourist industries became increasingly important in the late 1980s and early 1990s.

The proliferation of these businesses fueled the state’s economic revival. As a result Nebraska’s economy grew steadily in the 1990s, enabling the state to avoid most of the effects of a national recession in the early years of the decade. In the late 1990s most sectors of Nebraska’s economy continued to grow at a steady rate.

Nebraska’s unemployment rate fell below 3 percent in the early 1990s and remained one of the lowest in the nation for the rest of the decade. A long-term labor shortage forced companies and civic groups to launch campaigns to recruit workers from out of state.

Nebraska has become attractive to workers because wages and income have risen steadily while the cost of living and crime rate have remained well below national averages. In 2008 there were 962,000 jobs in Nebraska. Of those, 36 percent were in services; 20 percent in wholesale or retail trade; 17 percent in federal, state, or local government, including positions in the military; 11 percent in manufacturing; 7 percent in farming, including agricultural services; 18 percent in finance, insurance, or real estate; 21 percent in transportation or public utilities; 5 percent in construction; and just 0.1 percent in mining. In 2007, 8 percent of Nebraska’s workers were members of labor unions. "Nebraska" © Emmanuel BUCHOT, Encarta, Wikipedia

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