How Gas Prices Affect Your Career
If you drive, falling gas prices are a visible, and welcome, change in your life. But gas prices also shape the economy, and that can affect the jobs and careers available to you, for better or worse. How? The short answer: it’s complicated, and it depends on where you live.
Good for retail
The U.S. retail industry is enormous: in 2014, U.S. retail sales totaled $4.5 trillion. What do you most need to indulge in some retail therapy? Spare cash.
That’s what falling oil prices have given American consumers. AAA estimates that Americans saved some $14 billion at the pump compared to 2013, and with gas prices still low, that trend is likely to continue. Although the holiday sales were not as strong as expected, it’s likely that money saved on gas will start to find its way to stores this year, leading to more retail jobs.
Good for transport
Obviously, it’s good to be able to get around more cheaply, which helps the transportation industry. And there are some reports of increased wages in the trucking sector.
But lower gas prices also help in ways you might not expect. For example, cheaper gas means job seekers who depend on a car can look for jobs further from home, without seeing most of their income eaten up by transport costs. That means job seekers have access to a wider variety of jobs, and employers get more great candidates.
One downside: air travel probably won’t get any cheaper.
Mixed for manufacturing
Manufacturing uses a lot of energy, so lower energy prices in general help manufacturers. Oil is also used to make many products, such as fertilisers, pesticides, and especially plastics, so producing those products should get cheaper.
However, part of the U.S. manufacturing sector makes equipment for the oil and gas industry, and manufacturers that supply oil fields are reportedly struggling as gas prices fall.
Oil industry will be hurt
The biggest downside to falling gas prices is the damage to the U.S. oil industry—and that affects more people than you think.
In the last few years, rising oil prices have caused a boom in the U.S. shale gas industry. Technology has allowed us to extract gas from places where it was previously inaccessible, benefiting states like Texas, North Dakota, Alaska, and Pennsylvania.
But shale gas is more expensive to produce than Middle Eastern oil, for example. As long as oil prices were high, the higher cost didn’t matter so much, but now that oil is cheap again, the U.S. industry is struggling.
And oil is a big employer in the U.S. The Bureau of Labor Statistics says the industry employs around 200,000 workers, from petroleum geologists and engineers, to refinery operators, welders, electricians, and roustabouts.
Oil also contributes taxes to state budgets, and employment in other industries. Between mid-2008 and October 2014, states with shale gas industries added 1.36 million jobs, while non-shale gas states lost over 400,000 jobs.
The outlook for oil jobs isn’t great. Companies are cutting exploration and drilling, and employment has already fallen 1%, according to provisional BLS data. That means less money for state budgets in states that depend on oil revenues, which is bad for public servants there. Texas could even be headed for a recession in 2015, according to J.P. Morgan Chase.
In the long run, lower supply of oil will lead to higher gas prices, and companies will get exploring and drilling again. And oil industry jobs are generally great jobs: average annual pay in the oil industry in 2012 was $107,198. But for the moment, times are tougher.