How Oil Made Working-Class North Dakota a Whole Lot Richer

By Jordan Weissmann
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(Reuters)

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 suprise. But they've also jumped in working class sectors like transport (think trucking), construction, and even food services. 

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This is not a complete picture of oil's impact on job growth -- for that, you need to calculate the downstream effects on everything from refinery and railroad profits (a lot of this oil's getting shipped via train) to retail sales and government revenues. It's also important to keep in mind that we are specifically looking at the opening act of a boom -- a time when drillers were erecting rigs and developers were rushing to build homes for new workers. Some of those construction jobs might not survive, and in the event that oil prices crater again, much of this growth could be erased. But 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, this is what 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.

This article available online at:

http://www.theatlantic.com/business/archive/2013/05/how-oil-made-working-class-north-dakota-a-whole-lot-richer/275506/