The Q4 PayScale Index revealed that after falling for the first 3 quarters in 2015, wages are also up for mining, oil and gas exploration jobs—a big recovery in the final part of the year with a 1.6 percent quarterly growth. This is despite a crash in crude oil prices that occurred earlier in the year. As of this article, the cost per barrel of oil hovers around $40, which is less than half of last year’s prices of $90-100, so the wage increase is somewhat unusual.
There could be several factors at play here:
- The job market has turned in favor of skilled workers in the oil, mining, and other energy occupations, therefore employers are increasing salary to attract and retain the best.
- Employers are enjoying the lower cost of production and transportation of oil products, so they are funneling some of the added revenues to improved employee wages and benefit programs.
In either case, the PayScale Index predicts that wage growth for mining, oil and gas are still in the red. Wage increases are slightly below last year’s numbers (-0.2 percent) and so experts are watching to see what will happen in the coming months. In some regions, such as Houston, a city typically known for oil production, wages for workers fell by as much as 0.9 percent, which could signal trouble ahead for others. The great “oil boom” in the Dakotas is on hold as companies await oil prices to return to higher rates.
According to CNN Money, there is promise in other energy related careers, such as the solar energy market, which has increased jobs more than double-fold in the last five years. As compared to the some 17,000 new extraction jobs added in that time period, the solar energy market has created 35,000 jobs (20% increase from 2014). Companies in the solar energy field are desperate for skilled labor to fill an ever-increasing need for employees to meet the consumer and commercial demand for alternative power sources.
Additionally, shale natural gas production, which is far easier and cheaper to mine, has continued to outperform other types of mining and oil extraction methods. A study conducted by PwC on behalf of the National Association of Manufacturers forecast the addition of some 1 million new jobs in this area of energy manufacturing by the year 2025.
We are hopeful that the hard working folks in the energy sectors will continue to experience above average wages and job growth in 2016 and beyond. Be sure to keep checking back as we release quarterly updates to the PayScale Index.