About that Tsunami of Jobs ...

The Pennsylvania Department of Labor and Industry is out with a new count on the jobs created from natural gas drilling in the Marcellus Shale.

The Marcellus Core Industries (those most likely directly related to Marcellus drilling and extraction activity) added just over 1,000 jobs, a 3.5% increase, from the first to second quarters of 2012. On average since the fourth quarter of 2007, the Marcellus Core has added about 1,100 jobs a quarter, which works out to be just over 21,000 jobs.

(The numbers are based on the Quarterly Census of Employment and Wages, which is only available with a long lag, so the second quarter of 2012 is the latest data we have.)

Figure 1 below presents employment levels (black bars on the left) and percent change in employment from the previous quarter (red line on the right) in what L&I defines as the Marcellus Core. 

L&I doesn't know how many of the jobs it classifies as being in the Marcellus Core are actually directly involved in shale gas extraction. With Marcellus activity increasing in the state since 2007, L&I assumes that many of the new jobs added in this sector over time are very likely related to Marcellus gas extraction and not other mining related activities. This is a caveat that often gets lost in the reporting on Marcellus Shale job growth.

Figure 2 presents employment levels and the percent change in employment in what L&I defines as the Marcellus Ancillary, which includes employment in areas like trucking and steel manufacturing. These are industries much less likely to have a lot of direct Marcellus-related employment. 

As you can see in the figure, employment (follow the red line) in the Marcellus Ancillary is much more seasonal, with employment growth peaking in the second quarter of each year. There has also been substantially less employment growth in this sector.

It's not uncommon to hear claims that Marcellus gas extraction is supporting 200,000 jobs in the commonwealth. These claims rely on the Marcellus Ancillary employment counts and are well overstated.

The best educated guess is that since the fourth quarter of 2007, just over 21,000 jobs have been created by Marcellus drilling and gas extraction. Every one of those jobs is important at a time when Pennsylvania's unemployment rate is high. But in a state with 5.6 million jobs, those added in the Marcellus Core account for just 0.38% of the grand total.

The job gains from shale drilling are also roughly equivalent to the number of jobs lost by education professionals in the 2011-12 school year due largely to state budget cuts.

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