Another source of well-paying, middle-class jobs in the US is under threat

Energy Shocks
Energy Shocks

The American middle class has been under pressure for decades. Median household income in the US is roughly where it was in the late 1980s—and down about 7% from the recent high set in 2007.


But even in the grips of the Great Recession and its aftermath, there have been pockets of prosperity in some parts of the country, especially those parked over large petroleum reserves or otherwise closely tied to the US oil and gas industry.

Median_household_income_growth_select_metro_areas__Change_over_2007-14__chartbuilder (1)

Looking at the chart above, the first thing you’ll note is that the difference between the income trends in these places and in the US as a whole is stark. (The second thing you should note is that these numbers are nominal figures, not inflation-adjusted changes.)

In any case, it’s no surprise that incomes grew so fast in traditional Texas oil and gas towns like Midland and Corpus Christi. As for Kankakee, Illinois, it’s a hub for oil and gas storage and pipelines.

Even in areas where the fracking boom has been has been kept out by legislation—like in New York state—median wages are still rising. That’s the situation in upstate Elmira, New York, where workers are regularly hopping across the nearby Pennsylvania border for jobs in what had been a thriving oil and gas play in recent years.

The operative word there, though, is “had.” The sharp selloff of energy prices over the last year—US crude oil benchmarks are down 49% over the last 12 months—have brought oil and gas drilling activity to a screeching halt. And that means that an important source of well-paid, middle-class employment in America is about to undergo another of its periodic adjustments.


That’s not to say that oil and gas drilling is always an unmitigated good. Environmental costs remain a concern for many communities considering whether to allow drilling for petroleum resources. Still, it’s true that drilling can be a boon for incomes. But it’s also true that those jobs can vanish just as quickly.

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