Posted on 12/10/2012 8:37:58 AM PST by thackney
Right now in Dickinson, North Dakota, the local McDonalds is offering a $300 signing bonus to new employees. You heard that right, with a 7.7% nationwide unemployment rate, and persistently sluggish job growth and wage stagnation, the labor market of this one town in North Dakota is so tight, and employers are so desperate for workers, they’re offering a signing bonus for a job slinging fries.
And it’s not just Dickinson, unemployment in the entire state is 3.1%, GDP growth for the state is 7.6%, and housing there is in such short supply that one bedrooms are renting for more than $1000. What economic miracle has taken place in the plains, you might ask, to bring this about?
The answer is the Bakken formation, a subterranean rock formation that contains a thin, and until recently, more or less inaccessible, sea of oil within relatively hard rocks. But a revolution in the technology of extraction (including fracking) has helped unlock the oil in the Bakken and some speculate that the amount of extractable oil from just this one geological formation alone could surpass the reserves of all of Iraq and Kuwait combined. Production from the area has skyrocketed, and this new production boom is driving a larger national trend, pushing U.S. oil production up for the first time in a generation, and arresting what many believed was a permanent decline.
Compare the growth in crude-oil supply among a number of non-OPEC countries, and what you see is the U.S. obliterating the rest of the world. Employment in oil and gas extraction has surged to the highest level since 1992, (though we should note they still provide a tiny, tiny sliver of the country’s jobs, just under 200,000).
Our net oil imports are cratering. And now a number of analysts are predicting...
(Excerpt) Read more at tv.msnbc.com ...
Crashing seems a bit over-reaching to describe the chart above. It does look more impressive when you combine the reduced crude imports with the increased exports of refined products.
We achieve the above by actually importing more crude oil than we need ourselves, refining it while keeping the jobs and refinery capacity in the US, then exporting the higher value refined products.
That’s pretty typical of what’s happening in these Oil Patch areas. Tons of economic growth and a very small local population to take advantage of it.
I’ve heard of Tim Hortons in some parts of Alberta paying over $20/hr. for someone to pour coffee for oil workers.
Does the US oil/gas industry only employ 200k?
That seems kinda low to me.
If we aren't refining it, then someone else is, and importing it here (adding to the costs). I doubt any serious person can allege that we are using half as much gas as we did in 1985.
(Hopefully someone else can post the chart. It's embedded and interactive, and I can't figure out how to post it here.)
Breakdown at:
http://bls.gov/oes/current/naics3_211000.htm
By that definition, I would never have been counted in those numbers after decades in the industry. I always worked for someone like an engineering firm with an oil/gas client. For us, there are dozens of engineers/designers/procurement/etc people for every client engineer.
If you work at a factory that makes pipe for the oil/gas industry, you would not be counted in those numbers. Lots and Lots of indirects for the directs.
I think if they counted it like they do ‘automotive industry’ jobs there would be 10x that many.
That number has been meaningless to almost everyone for a very long time. Refineries primarily make gasoline blending product that is mixed and then sold by another company. Very little product is sold directly by the refinery to the end users.
For example, your link shows 30.5 million GALLONS per day sold in September. In September, the entire US sold 8.575 millon BARRELS of gasoline or over 360 million GALLONS. Your link is to only 1/12th of the US sales.
U.S. Product Supplied of Finished Motor Gasoline
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUS2&f=M
While there has been a drop in demand, it is not as significant as the Refiner Sales would indicate.
My son was sent to Williston, ND, to do a job (oil patch). Said the local Wal-Mart had a help wanted sign on the front door. Starting pay $18/hr.
uh oh this sounds like unbridled prosperity like what we experienced at the turn of last century. Obooba better step in and stop it quickly.
Many others are going to be like this. Pump manufactures will unlikely make pumps only for the oil/gas industry. They will have specialized models, but many components will be used for a different pump in water or other services. Not to mention the oil company will also buy water service pumps.
There is no doubt there is lots of spin-off employment when a significant increase in energy production occurs in the area. Heck, even the laundry folks and fast food hire more workers because of a boom in the Bakken and Eagle Ford.
Efficiency increases over time (if allowed to, as in normal business).
There are many other industries that employ a lot of people, most of which are low-tech. And many industries where jobs have gone overseas.
Just think of what people spend money on; food, shelter, clothing, transportation. And all those consumer-sales businesses buy from businesses that sell either exclusively to business (like industrials) and those that sell to both (like phone/data service).
The industrials, or business-to-business-only businesses, create jobs but do not rely on consumer spending in the same “money spending cycle” (i.e., “velocity of money”) to do so, like consumer goods companies do. The 1990’s were an economic “boom” time because all of the job growth from which the “boom” originated were business-to-business companies. That is, initially, we had business spending on outsourcing Inside America, giving out many fat paychecks to outside consultants without requiring corresponding consumer price increases and no layoffs (it was a capital allocation choice, i.e., the equivalent of private sector “stimulus”). Said consultants then spent and invested their earnings almost entirely inside the U.S. economy.
Oil companies are dang efficient - even though they are huge.
The stranglehold is on little companies where things like the potential liabilities stemming from Human Resources-related law, environmental regulations, capital formation, etc., create egal minefields and financial hurdles for the small business owner (it’s not simply a problem of too many “forms to fill out”).
Congress should order those that are on welfare and able to work to move to North Dakota or lose their benefits. Put them on trains and send them out there.
Something productive Obama hasn’t destroyed yet.
You can lead a horse to water...........................
The Obamessiah will not be pleased with this news.
A lot of the people from this area, (Eastern Wa. State) are working there, due to the high unemployment here.
What's that, a tank of gas and one trip to the supermarket?
Yeah, you’re right.
You can get up to $500/week in unemployment.
May as well stay home.
No, Obama is waiting to exploit it.
Once Boehner caves and allows the government to tax the wealthy to death, Obama will then encourage drilling for gas and oil.
The economic recovery will be credited to the socialism that Obama has enacted, not oil/gas production.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.