fedgazette Roundup (2011-2015)

Welders have struck gold in the oil patch

Brian Holtemeyer

Published February 8, 2012

In North Dakota and Montana, wages and employment for welders have grown very quickly near the Bakken shale-oil formation in recent years.

The Bureau of Labor Statistics gathers employment data in urban and rural areas of every state and further delineates rural (or nonmetropolitan) areas from each other so that regional patterns can be investigated. Both North Dakota and Montana have four nonmetropolitan areas (in brown in Figure 1) and three metropolitan areas (in white). While the Bakken shale-oil formation covers a significant portion of western North Dakota and eastern Montana, the heart of the Bakken is in red.

 Bakken map -- 2-6-12

Much has been written about the economic activity occurring in the district’s oil patch (including in the fedgazette). That growth has led to strong demand for workers in occupations directly tied to oil extraction. That’s particularly the case for welders, which include cutters, solderers and brazers, who are vital in maintaining drilling rigs, pipelines and other oil-related infrastructure.

Not surprisingly, wages and employment for welders in the oil patch are rising, and BLS data offer a snapshot of how they compare to other regions. Chart 1 below plots average annualized employment and wage growth from 2006 to 2010 among nonmetropolitan regions of North Dakota and Montana. Welders generally had much plumper checks and were on more payrolls in the nonmetropolitan regions in or near the Bakken than their coworkers in other nonmetropolitan areas.

 Welders in Bakken -- 2-6-12

The growth of employment and wages near the Bakken is impressive, but it’s also a function of how few welders there are in these nonmetropolitan areas. For example, welders’ employment in eastern Montana almost tripled, from 60 to 170. In fact, in 2010 none of North Dakota’s nonmetropolitan areas had more than 400 welders, and none of Montana’s rural regions had more than 200.

The Minneapolis Fed is currently investigating the employment effects of the oil boom in the Bakken formation. Watch for a cover article on this topic in the April fedgazette.