Kansas City Fed: Record Oil Output Doesn’t Equal Record Employment
Following the 2014-16 oil bust, Oklahoma’s oil production reached new heights. But gains in employment haven’t kept pace. The state’s oil and gas industry employs 20 percent fewer people than it did at the height of production last year, according to a new analysis by the Kansas City Federal Reserve.
Chad WIlkerson heads the Oklahoma City branch of the Kansas City Federal Reserve, and he compared Oklahoma’s biggest industry to others, focusing on how workers fared following big gains in productivity.
“Only three other industries in the past 30 years have had their productivity double in a five year period like the national oil and gas industry did from 2012 the 2017,” Wilkerson said.
Those industries are: Computer and electronics manufacturing, electronic and appliance stores, and wireless telecommunication carriers.
“What then happened in those industries after they had this large surge in productivity?” Wilkerson asked.
He found that employment fell in all three during the following decade. Output, however, continued to rise by more than 50 percent.
When oil and gas boomed from2004-08 and 2010-14, larger increases in rigs and workers were needed to increase production. Though Wilkerson says it’s difficult to extrapolate from one industry to another, the trend in other industries suggests oil and gas employment will continue to lag as production breaks records.
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