Drilling Deeper into Job Claims: The Actual Contribution of Marcellus Shale to Pennsylvania Job Growth

Authors: 
Stephen Herzenberg
Publication Date: 
June 20, 2011

Marcellus Shale Drilling Rig

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A May 29 article in The Patriot News reported that natural gas drilling in the Marcellus Shale has created 48,000 jobs. Since then, other Pennsylvania media outlets and industry supporters have circulated this claim widely.

Actual jobs data tell a different story. This briefing paper demonstrates that Marcellus Shale drilling has created no more than 10,000 jobs. 

  • The 48,000 figure refers to “New Hires” — additions to employment. New hires are not the same as jobs created because many new hires replace workers who have quit, been fired or retired. Over the same period that Marcellus industries reported 48,000 new hires (the fourth quarter of 2009 to the first quarter of 2011), there were 2.8 million “new hires” in all Pennsylvania industries but only 85,467 jobs were created. This dramatic difference makes clear that the number of new hires by itself is not a meaningful indicator of job creation.
  • “…an increase in new hires does not directly equate to an increase in the total employment count. The new hires count is simply an indication of hiring activity in an industry. Separations, in the form of initial claims (layoffs) or quits, are linked to job destruction and account for the other half of the employment change equation. The balance of hires and separations result in the employment change.”

    – Pennsylvania Department of Labor and Industry, Center for Workforce Information and Analysis, Marcellus Shale Fast Facts, June 2011

  • Since the fourth quarter of 2009, Marcellus “Core” and “Ancillary” industries — as defined by the Center for Workforce Information and Analysis (CWIA) of the Pennsylvania Department of Labor and Industry — created 1.7% of all new hires in Pennsylvania, one out of every 59.
  • An accurate picture of the contribution of the Marcellus Shale to recent growth of jobs in Pennsylvania requires the use of a data base that directly measures “employment” and “jobs.”  Using such a jobs data base, CWIA finds that Marcellus Core industries in Pennsylvania created 9,288 jobs between the fourth quarter of 2007 and the fourth quarter of 2010. (Note: we use a different time period for the jobs data base than the new hires data base because CWIA does.) Marcellus Ancillary industries actually lost 3,619 jobs in this period so that, taken together, Marcellus Core and Ancillary industries created 5,669.
  • The number of jobs created by Marcellus industries is small — less than 10% — compared to the 111,400 increase in jobs in all state industries since Pennsylvania’s recent employment trough in February 2010.

The Marcellus Shale has made a positive contribution to recent job growth in Pennsylvania, but the size of that contribution has been significantly overstated in recent statements and news reports.  Policymakers and the public need to look to other policies that predate the Marcellus boom — such as, investments in education, economic development, renewable energy, workforce skills, and unemployment benefits — to explain Pennsylvania’s relatively strong recent job growth.

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