The Marcellus Shale gas boom in Pennsylvania: employment and wage trends
This article uses annual data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages (QCEW) program for the period 2007–2012. Data from 2007 present Pennsylvania’s oil and natural gas industry before the expanded use of horizontal drilling in the state,5 whereas data from 2012 are the most recent annual data available from QCEW.
For the purposes of this article, the oil and natural gas industry is defined as an aggregate of three industries: (1) oil and gas extraction (North American Industry Classification System (NAICS) 211), which represents establishments that operate and develop oil and gas fields; (2) drilling oil and gas wells (NAICS 213111), which contains establishments that drill oil and gas wells, as well as contractors that specialize in directional drilling; and (3) support activities for oil and gas operations (NAICS 213112), which comprises establishments that perform support activities, such as exploring, building, and dismantling wells. The coal mining industry is defined as an aggregate of two industries: coal mining (NAICS 21211) and support activities for coal mining (NAICS 213113). Establishments in these industries are primarily engaged in support activities, such as exploring, blasting, and tunneling, as well as the actual mining of coal.
National-level comparisons of industry employment and wages
From 2007 to 2012, the total annual average employment in all U.S. industries decreased by 3.7 million (
|Industry||Employment||Average annual pay|
|Level change||Percent change||Level change||Percent change|
United States, all industries
Oil and natural gas industry
Oil and gas extraction (NAICS 211)
Drilling oil and gas wells (NAICS 213111)
Support activities for oil and gas operations (NAICS 213112)
Coal mining industry
Coal mining (NAICS 21211)
Support activities for coal mining (NAICS 213113)
|Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages program.|
Average annual pay grew by a larger amount in the oil and natural gas industry than it did in the national economy.6 From 2007 to 2012, the U.S. average annual pay increased by $4,831 (10.9 percent), to $49,289. Over the same period, workers in the oil and natural gas industry saw, on average, an annual pay increase of $13,624 (14.6 percent). In 2012, the average annual pay in that industry was $107,198, which is $57,909 higher than the average annual pay across all industries.
Between 2007 and 2012, employment grew in each of the three oil- and natural gas-related industries. The absolute and percent growth in the average annual pay of these industries also was larger than the growth in national average annual pay. Support activities for oil and gas operations had the largest increase in employment over the study period, adding 85,347 jobs (an increase of 43.3 percent) and reaching a 2012 level of 282,447 jobs, the largest employment level among the three industries. Oil and gas extraction had the largest pay increase, $22,552 (17.0 percent), and, by the end of the period, the largest annual pay, $155,062.
5 “Horizontal drilling boosts Pennsylvania’s natural gas production” (U.S. Energy Information Administration, May 2012), http://www.eia.gov/todayinenergy/detail.cfm?id=6390.
6 For the aggregate oil and natural gas industry and the aggregate coal mining industry, average annual pay was calculated by dividing the sum of total annual wages by the sum of annual average employment.