NCPA - National Center for Policy Analysis

Oil Boom Raises North Dakota Wages

May 14, 2013

Advances in hydraulic fracturing, or fracking, among other petroleum technologies, have led to an economic boom in North Dakota. Extraction of shale gas has led to rising tax revenues, wages and standards of living in North Dakota and Montana, two of the states with the large Bakken Shale formation underneath. At a time when the rest of the country is struggling to grow, the shale gas boom is a good reason why abandoning fossil fuels is unreasonable, says Jordan Weissmann of The Atlantic.

  • Employment grew by 35.9 percent from 2007 to 2011 in counties where oil rigs were drilled.
  • While local job growth grew substantially from 78,000 jobs to more than 105,000 jobs, the petroleum industry had a greater impact on local income.
  • Average pay before the gas boom was $33,040, a figure that increased by more than 50 percent to $50,553.
  • Total wages earned in the counties where oil rigs were drilled increased from $2.6 billion to $5.4 billion.

The wage increase has not just occurred for those working in the industry. Increasing numbers of oil field workers with high salaries spend their money locally, which means that workers in other industries have benefited from the boom.

  • The professional and technical service industry has grown substantially and real estate prices are skyrocketing in many of the boomtowns.
  • Similar wage increases have been experienced in the transportation, construction and even food services industries, which all support the growing oil industry.
  • Agriculture, foresting, fishing, hunting, accommodation and wholesale trade have also experienced higher than average growth in annual pay since 2007.

Many of the jobs over the long-run may disappear. At the beginning of an oil boom, many extra employees are needed as wells are drilled that might not be needed down the road. Still, while environmentalists lambast oil and gas production, politicians recognize that oil and gas not only bring jobs, but well-paying jobs which creates income that trickles down through the economy.

Source: Jordan Weissmann, "How Oil Made Working-Class North Dakota a Whole Lot Richer," The Atlantic, May 2, 2013.


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