While last Friday’s employment report reflects an economy struggling to create jobs during an extended, sub-par “jobless recovery,” it’s been a much healthier employment picture in one of America’s most successful “shovel-ready” job-creating industries: Oil and Gas Extraction.
The top chart above displays the monthly percentage changes in employment levels since January 2008 for oil and gas extraction jobs compared to total nonfarm payroll jobs. As of last month, total US nonfarm payroll employment is 2.3%, and 3.23 million jobs, below the January 2008 level. In contrast, the explosion of new oil and gas jobs has increased employment in the energy industry by more than 26% in the last five years.
The bottom chart above displays monthly employment for the US oil and gas extraction industry, which rose to the highest level in January (193,700) since August 1988, more than 24 years ago. In just the last three months, energy companies have hired 5,500 new employees for oil and gas extraction activities, which is a hiring rate of almost 100 new workers every business day. And that just accounts for the new jobs created that involve the actual drilling, extraction, and production of oil and gas.
A March 2012 study found that for every one new job added in oil and gas extraction activities, there were three new additional jobs created elsewhere in the economy. The report also found that “the jobs-multiplier effect of U.S. oil and natural gas activity is higher than many other U.S. industries, including the financial, telecommunications, software and non-residential construction sectors. This is the result of the energy industry’s long supply chains and relatively high levels of spending by employees and suppliers.” As a result of the multiplier effect, the U.S. economy has potentially been adding almost 400 new jobs per day over the three months due to increased oil and gas production.
Imagine all of the additional shovel-ready, energy-related jobs (direct and indirect) that could have been created since 2008 in the oil and gas industry (and its supporting industries), if the Obama administration had been a little less friendly to the taxpayer-subsidy-dependent, high-cost, unreliable but politically-favored “green” energies, and instead had been a little more friendly to the low-cost, job-creating, dependable fossil fuel industry (think Keystone XL pipeline) that doesn’t require picking the pockets of the taxpayers. Additionally, imagine how much higher the jobless rate might be today if we hadn’t had the tremendous “energy-stimulus” to the US economy that has resulted since 2008 from increased oil and gas drilling due to technological advances of hydraulic fracturing and horizontal drilling.
Related: See this recent Spiegel article about ”America’s energy miracle,” titled ”Full Throttle Ahead: US Tips Global Power Scales with Fracking.”