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Desperately seeking workers in the oil patch. Desperately seeking workers in the oil patch Jobs go begging in booming western North Dakota and northeastern Montana. If you’re working in the oil and gas industry, the importance of having proper work boots can and should never be overlooked. These footwear can do a lot more than just protect your toes. Chose carefully and you will not. The oil Patch, OKY Investment, Beam Pumping units for sale in Oklahoma. Desperately seeking workers in the oil patch. Desperately seeking workers in the oil patch. Jobs go begging in booming western North Dakota and northeastern Montana. Phil Davies. . But so far, the supply of labor—from within and outside the region—has responded slowly to demand. In recent years, job openings have soared and unemployment has dropped to very low levels—below 3 percent in a number of counties. The Bakken oil play is drawing job seekers from other Ninth District states and the rest of the country, but they’re not coming in sufficient numbers to keep up with continued job growth. There are several obstacles to the flow of labor into the oil patch, among them low unemployment in eastern North Dakota, the area’s frigid winters and—most important—a scarcity of housing. The region faces an awkward period of adjustment, but labor conditions are likely to loosen within a few years as rising wages and improved living conditions for migrants increase the workforce. Rick Tofte doesn’t try to hire workers for his Williston, N. D., construction business anymore. They’re difficult to find, and even harder to keep—starting wages at oilfield service firms in the area far exceed what he can pay for the services of carpenters, roofers and electricians. The 3. 0- year- old firm has a full slate of building projects, including upscale housing and facilities for expanding oilfield companies. Yet Tofte Brothers Construction employs only six people; as the oil boom has taken hold in the region, Tofte and his brother Terry have increasingly relied on subcontractors to do most of their work“We have changed our structure in how we . From Minot, N. D., west to Sidney, Mont., and on down to Dickinson, N. D., few workers are available to fill thousands of job openings in a range of industries, from oil and construction to health care and food service. Last December, the unemployment rate in the Williston area was 1 percent, and job openings outnumbered the jobless 1. In the oil patch, labor supply constantly plays catch- up with demand—setting it apart from most areas of the Ninth District and the nation, where unemployment rates remain high in the wake of the Great Recession. Oil country is a place where finding a job typically takes less than a day, unskilled laborers can make over $6. As local pools of available labor have drained, job seekers have poured into the oil patch from other parts of the district, from distant states and even from other countries. But still there aren’t enough outsiders arriving to satisfy rising demand for labor in a white- hot regional economy driven by ongoing oil and gas exploration, drilling and production. Markets are rising to the workforce challenges of the oil boom. For example, employers have raised wages to lure workers in a variety of industries, not just oil and gas. But when jobs are plentiful and wages high, yet employers still go begging for workers—especially in this national economy—it’s clear there are barriers to the free flow of labor into the oil patch. One obstacle is external to the region—low unemployment in eastern North Dakota that discourages migration from that area. Hit by a massive economic stimulus that has attracted thousands of newcomers, many cities and towns are feeling growing pains. For many prospective workers, there’s another type of pain—the region’s notoriously harsh winters. But they’re striving to make the oil patch a more hospitable place to live and work; for instance, the pace of housing construction has picked up over the past two years, despite lingering fears of a 1. Features information jobs on the oil industry including details on job descriptions, salaries and working conditions.An employment gusher The full impact of oil and gas development on the regional economy becomes evident in springtime, when the easing of road restrictions gives full rein to trucks headed out to drilling and well sites in the oilfields. The already high level of activity in communities such as Williston, Dickinson and Sidney rises to a fever pitch; restaurants are packed, long lines form at the post office, traffic jams main thoroughfares. Total employment has exploded in the region since the early 2. Chart 1), thanks to new horizontal drilling techniques that allow energy companies to tap the Bakken Formation, a deep layer of oil- bearing shale underlying 2. Great Plains. Employment in Williams County (home to Williston, a bustling oilfield hub) and Mountrail County more than doubled between 2. U. S. Bureau of Labor Statistics (BLS). Employment growth in six Bakken counties with either major oil production or oilfield service centers far outstripped average growth in North Dakota—a state which led the country in job gains. Not surprisingly, many new jobs in this core Bakken zone and other nearby counties are in oil and gas (oil wells produce natural gas as a byproduct). From 2. 00. 3 to 2. BLS data are available—the industry added at least 5,5. North Dakota and western Montana. Most of the new positions were at North Dakota oilfield service firms that provide petroleum and drilling companies with everything from truck hauling to crane services to derrick and well components (see Chart 2). With the exception of a short slowdown during the recession (see the September 2. North Dakota. In February, over 1. Baker Hughes, an oilfield technology firm that compiles drilling statistics. Oil and gas development has also created jobs in other industries that feed on energy spending rippling through the regional economy (see Chart 3). Builders in core Bakken counties have thrived on expansion projects—new offices, workshops and temporary housing for workers—for oilfield companies such as Baker Hughes, Halliburton and Brigham Exploration. Transportation employment has increased too. Together, Williams County and Stark County (home to Dickinson) gained over 7. Oilfield trauma—falls, burns, explosions, crushed limbs—have added to the workload and strained capacity at hospitals in the region. Last fall, Mercy Medical Center in Williston broke ground on a 4. Everywhere in the oil patch, new enterprises have opened to cash in on the boom—machine shops, restaurants, extended- stay motels, appliance stores. In the Williston area alone, almost 5. BLS figures. All need labor, a commodity that has become more precious than oil itself. Jobs chasing people Rising demand for labor has severely taxed supply in a region that before the oil boom was an economic backwater compared with fast- growing western Montana and North Dakota’s Red River Valley. Ranching and dry- land farming were the mainstays in what is now the oil patch, supporting a relatively small, dispersed workforce; in 2. North Dakota counties west of Minot and four border counties in Montana. In December 2. 01. North Dakota and two in northeastern Montana had unemployment rates at or below 3 percent (see map). By comparison, North Dakota’s average unemployment rate was 3. Montana was 6. 7 percent. Rates were relatively higher in Montana’s portion of the Bakken—though still low in most counties compared with the state and U. S. Data on job openings paint an even starker portrait of demand chasing supply in the oil patch. Job openings have climbed in the region as more jobs go unfilled for longer periods. According to Job Service North Dakota, job openings in most oil counties increased at least 8. December 2. 01. 1 compared with the year before; in Williams County, vacant positions more than doubled year over year. A large share of openings are for oilfield jobs—petroleum engineers, roustabouts, crane operators, heavy- truck drivers. In January, there were over 1,1. Williston. Job Service data show that last December, job openings outnumbered unemployed people in many oil counties—an indication that labor pools were nearing rock bottom. In Williams County, there were 1. Stark County. Oil and gas development is also putting pressure on labor supplies in Minot and Bismarck, N. D., cities on the periphery of the oil patch. Bismarck is the state capital, with thousands of government jobs. But Minot and the Bismarck- Mandan metro area are becoming centers for oil companies, engineering, land leasing agencies and other firms doing business in the oilfields to the west. In the Minot area, average weekly wages rose 1. And in both cities, percentage increases in job openings over that period mirrored those seen in oil- producing counties. High wages and big- screen TVs With labor supplies stretched tight as a drum, recruiting and holding onto workers is a daily battle for many firms, from the oilfields to Main Street. Raising wages is the most obvious tactic to lure scarce workers, and indeed average private wages have risen dramatically in the oil patch. Since 2. 00. 4, wage increases in core Bakken counties have dwarfed increases in the state and nation (see Chart 4). For example, in Mc. Kenzie County, N. D., average wages for motel and food service workers increased 6. In the Sidney area, the locus of oil activity in the western part of the Bakken, average construction wages rose 1. In Watford City, the seat of Mc. Kenzie County, auto dealership S& S Motors has doubled its wage rates over the past five years. Employers have tried other ways of attracting and retaining workers, including offering flexible or part- time hours, paying sign- on bonuses and enlisting current employees in recruitment efforts. Last winter, a Williston restaurant ran a promotion in which workers who referred new hires were entered in a prize drawing for a large- screen television. But no matter how diligently they pursue workers and strive to keep them happy, many businesses in the oil patch inevitably lose employees to the oilfields. Not everybody is cut out to work on an oil rig, or an oilfield service crew—the work is physically demanding and the hours long. But the lure of high wages can be irresistible, particularly for young men. Tofte, Johnson and other employers interviewed for this article said workers had quit to take jobs in the oil and gas industry. Tofte said he stopped trying to compete with oil wages years ago. |
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