Hope Fades For Idled Oil Workers
Enid, Okla. — Other men bought big houses or new pickups with their oil money. Mike Gillham bought his favorite bar. He heads there most nights, to lug in more beer, to throw darts with his regulars, to smoke Camels and sit with his wife and wonder how to keep getting by, now that his oil job is gone.
Four years ago, Gillham stumbled upon what is more or less an economic lottery ticket for an American man whose education stopped after high school. It paid more than any other gig he’d had — more than all three of the jobs, combined, that he’d been working simultaneously before a buddy called and invited him into the well-paid world of the oil and gas industry.
The crash in global oil prices late last year, with oil prices plunging from nearly $110 to about $45 for a barrel of West Texas crude, burned that lottery ticket. Gillham and thousands of men like him lost their jobs.
“It was like somebody knocked the wind out of you, a little bit,” Gillham said.
The collapse in oil prices came as a surprise to the nation’s oil workers. While there had been booms and busts before, this was supposed to a sustainable renaissance in American energy. And though oil has bounced back a bit — to about $60 a barrel — the pressure on American oil drillers isn’t subsiding.
On Friday, Saudi Arabia and other members of the Organization of the Petroleum Exporting Countries announced that they would continue to pump 30 million barrels of oil a day, the latest recent instance of the group breaking with a long-running strategy of reducing supply when prices fall. On the same day, new U.S. jobs data indicated that another 17,000 jobs in and around the oil and gas industries disappeared in May.
While falling gasoline prices have helped American consumers save more money and dine out more often, they have been punishing for a set of workers who have been especially reliant on the oil industry for jobs.
The industry, after all, had offered the rare prospect of good-paying jobs to American men with no education beyond high school — men who spent two decades seeing economic opportunities battered by the twin forces of globalization and factory automation. Now, for many of these men, that prospect is fading.
“They’re going to have to take lower-paying jobs,” said Lynn Gray, director of economic research and analysis for the Oklahoma Economics Security Commission. “There’s going to be very few opportunities paying anywhere near what they’re making. That’s beginning to dawn on them.”
The plunge in oil prices has knocked more than half of the country’s oil and gas rigs offline, as companies shut down wells that can’t turn a profit at prices this low. Since November, 44,000 jobs in oil and gas drilling or supporting industries have vanished, according to the ADP Research Institute, which tracks private payrolls nationwide. Most were concentrated in the West and the South.
More than 9 out of 10 oil and gas jobs are held by men without college degrees. Their median earnings topped out at $65,000 a year in 2013, according to Census Bureau data, double what similarly educated men make in the overall economy.
Between 2008 and 2013, the median income for prime-working-age oil and gas drillers increased by 70 percent, according to an analysis by economist Brad Hershbein, a visiting fellow at the Brookings Institution’s Hamilton Project.
Over the same period, in the economy at large, the median income for men with no more than a high school education fell by 6 percent, after adjusting for inflation.
Only a few other sectors pay that well for men with such little education, according to Hershbein, including railroads, power utilities and heavy machinery installation. But none of those sectors have seen the same growth in pay or number of jobs. When the energy sector began pulling back, there was nowhere comparable for those workers to go.
“We were in panic mode” after he lost his job, said Gillham’s wife, Sherri. “I’d wake up in the night and that was the first thing on my mind — what are we going to do for money? And then he started freaking out a bit, and that made it worse, because he’s usually the calm one.”
When their oil money shut off, the Gillhams canceled their extra cable channels, switched to a cheaper cellphone plan, planned more meals at home and kept a closer eye on the grocery list. They went without health coverage for several months.
After two months of searching for a job, he got one, a job pouring concrete for the city parks department, that pays half as much. “I can’t really complain about it,” Gillham said, “but it’s basically half what I was getting paid at my oil-field job.”
Thousands of men suffered similar fates. Oklahoma has lost nearly 8,000 mining jobs since November, or about 1 in 8 jobs in the sector. It has seen a 30 percent increase, compared with a year ago, in new claims for unemployment benefits.
In Enid, foreclosures are also up, and so are court filings for missed child-support payments, according to social workers in town. There are job openings around town, but they typically pay closer to minimum wage than oil wages. A caseworker at CDSA, a downtown Enid nonprofit that serves the poor, said recently that she’d just seen someone who had lost a $40-an-hour job and taken one that pays $8 an hour.
“I see people who are being evicted. I see people who are homeless,” said the CDSA housing coordinator, who for privacy reasons uses only her first name, Earlene, at work. “People think the money’s going to flow forever, and of course it does not.”
The Gillhams extract hope from their bar. They had thought about buying a new truck last fall, a big Dodge Durango, with their oil money, but at the last minute Sherri said no. She didn’t want the big payment. She’d seen how the oil bust of the 1980s battered her oil-worker father and her family, which depended on him.
Instead, the Gillhams bought their favorite bar, which they hoped would be a more sustainable business. Sherri quit her day job to run the place. On two recent weeknights, they hosted a dozen or so regulars who drank $2.25 Coors Lights and tossed darts deep into the night.
“It would be awesome,” he said, “if it supported both of us.”