Friday, June 12, 2015

Oil bust hits poorly educated workers at a time when pay for high-school grads has been declining

Thousands of job seekers who flocked to rural areas for oil-boom jobs are being hit hard by an industry bust that is forcing them to take jobs with significant pay cuts, Jim Tankersley reports for The Washington Post. The price of West Texas intermediate crude dropped from $110 a barrel to $45 late last year; it has been around $60 for more than a month, but that hasn't been enough to save jobs, with analysis released last week saying the oil industry lost 17,000 jobs in May. (Post photo by Bonnie Jo Mount)

ADP Research Institute, which tracks private payrolls nationwide, said oil, gas and supportive industries have lost 44,000 jobs since November 2014, mostly in the West and South. That spells bad news for an industry that once offered high-paying jobs for workers with little education, Tankersely writes. Lynn Gray, director of economic research and analysis for the Oklahoma Economic Security Commission, told him, “They’re going to have to take lower-paying jobs. There’s going to be very few opportunities paying anywhere near what they’re making.”

More than 90 percent of oil and gas workers lack a college education, so the unemployed have little chance of finding jobs that pay comparably to the median salary of $65,000 a year the industry paid in 2013, Tankersely writes. "Between 2008 and 2013, the median income for prime-working-age oil and gas drillers increased by 70 percent, according to an analysis by economist Brad Hershbein, a visiting fellow at the Brookings Institution’s Hamilton Project. Over the same period, in the economy at large, the median income for men with no more than a high-school education fell by 6 percent, after adjusting for inflation."

There are only a few other sectors that "pay that well for men with such little education, according to Hershbein, including railroads, power utilities and heavy machinery installation," Tankersely writes. "But none of those sectors have seen the same growth in pay or number of jobs. When the energy sector began pulling back, there was nowhere comparable for those workers to go."

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