While Susquehanna County, Pennsylvania was heading over a recessionary cliff in late 2008, northeast Pennsylvania began to see the trickle of what would become millions of dollars pouring in from drillers looking for gas.
Business Insider recently traveled to Susquehanna County and its seat, the town of Montrose, to see how life had changed since the dawn of the gas boom. What we found were lots of people grateful for the infusion of commerce injected into a local economy that had stagnated.
The county has seen a surge in wealth. By one count, county residents have taken in a total of $300 million in gas royalties.
“There are new facades on buildings, new streets being poured, a lot of people working,” say local “petropreneur” Adam Diaz. “People are upgrading their homes, there’s all kinds of stuff going on.”
Indeed, nearly every local we spoke with who works in the service industry told us receipts had ramped up. Jay Agkinson, a lifelong county resident who runs Montrose’s Shell station, said morning fill-ups can sometimes resemble truck meets.
“A lot of people who never had money have money now,” he said.
And here is yet another reminder of why it’s going to be very tough to convince a lot of working-class Americans that we should move away from fossil fuels.
The Bureau of Labor Statistics recently produced a breakdown of job growth during North Dakota’s oil rush, and it’s pretty remarkable. In counties where oil rigs have sprouted up to drill from the Bakken Shale Formation — a few of which are actually in Montana — employment grew by 35.9 percent from 2007 to 2011, from about 78,000 jobs to more than 105,000. But much as in Texas’s shale country, the impact on local job growth has actually been dwarfed by the impact on local income. Total wages more than doubled from $2.6 billion to $5.4 billion. Average pay jumped by more than half, from $33,040 to $50,553.
Blue-collar men suddenly finding high-paying work in the fields is a big part of the story. But jobs and paychecks have surged across industries. Some of the fastest growth has been in professional and technical services, a category dominated by college educated workers. Earnings have grown the most in real estate, which, with rents rivaling Manhattan in the boom town of Williston, isn’t that much of a surprise. But they’ve also jumped in working class sectors like transport (think trucking), construction, and even food services.
The overriding point is that when a lot of politicians and workers in places like North Dakota, Texas, Louisiana and even parts of California these days think of oil, they see not just jobs, but well-paid jobs. They see a middle-class livelihood, even when the rest of the economy looks as if it’s fallen apart. Those of us who worry about what our love affair with hydrocarbons is doing to the planet need to keep that in mind.
MP: Two great examples of how shale prosperity is providing significant economic benefits to middle-class Americans in states like North Dakota and Pennsylvania by providing thousands of well-paying, blue-collar jobs and paying billions of dollars in royalties to local landowners and farmers. The middle class are prospering like never before in areas of the United States like Ohio, Pennsylvania and Texas thanks to the development of shale oil and gas.
A disappearing, stagnant, or declining middle class? Talk of the younger generation today being the first generation to not do better than their parents? Being disillusioned with the American dream of rising prosperity? Concern about a “jobless recovery” and a falling labor force participation rate? You’ll hear none of that these days in energy-rich North Dakota, Texas and Pennsylvania.
HT: Robert Kuehl for Exhibit A.