What do Oil Price Increases Mean for Jobs in Oil-producing States?
At the end of November, Opec announced a deal between oil producing nations to help curb global oil production. While this is welcome news that could help support an industry which has been struggling since oil prices collapsed in mid-2014, some skepticism remains about the viability of the agreement.
Although where oil prices will be next week or next month is—as always—up for speculation, it appears that for now they hit bottom in early 2016. Since then they have recorded modest gains and, perhaps most importantly, have remained stable in recent months.
Earlier this year we reported how the oil price drop impacted the US labor market and also how job seekers responded to such an unexpected change. In light of this improvement we decided to look for a corresponding reaction from oil producers, in the form of increased oil-related job postings on Indeed, and also for any sign of increased interest in these jobs from our job seekers.
What follows is an analysis of oil-related job postings and searches, both for the US overall and the five states in which the oil industry carries the largest impact on the local labor market.
Oil Job Postings
While there has only been modest improvement in prices, Indeed job postings data show some signs of new life in the oil labor market.
As the chart shows, oil producers were already tightening the reins in early 2014, before prices plunged mid-year. Job losses continued nearly unabated until early 2016 when oil-related postings briefly stabilized. Since hitting that bottom, oil-related jobs as a share of all postings have notched small but significant growth, climbing by 52.1%.
It would be a stretch to classify this as an enormous improvement, and the uptick is likely not yet sustained enough to designate it a rebound. However, it is encouraging to see oil producers willing to invest in hiring once again after such a long layoff.
We examined job postings activity in the five states in which oil-related jobs have the largest impact on the local labor market, according to Bureau of Labor Statistics (BLS) data, and found that while the number of available openings declined by a similar amount across 2014 and 2015, the subsequent rebound has not graced each market evenly.
The table above shows just how far the relative job posting volume in each state declined from the day prices started their plunge in mid-2014, to the day search volume hit their eventual bottom sometime in early 2016. Labor markets in these states suffered a decline of a similar magnitude, with each state’s relative job posting volume dropping about 80-85%.
However, the recent rebound in job postings has not occurred evenly across states.
The relative volume of oil-related job postings in Wyoming, Alaska and Oklahoma have all bounced back significantly, more than doubling the level reached at their lowest point. That of North Dakota has bounced back as well, although not to the significant degree of the top three states.
Meanwhile, job postings in Texas have remained remarkably flat. However, developments in west…