Report finds shale development still not creating many jobs

Employment figures for shale counties
Employment figures for shale counties – Click to enlarge

The promised employment boom from shale development in eastern Ohio continues to be underwhelming. A new report released this week by the Maxine Goodman Levin College of Urban Affairs at Cleveland State University found that counties where shale development is occurring saw sluggish employment growth through 2012.

The report divided all counties in Ohio into four groups – strong, moderate, weak, and non-shale counties. Each county was placed into one group based on geological data and well activity.  According to the report’s findings, strong shale counties grew at .6 percent in 2012, moderate shale counties at .5 percent, weak shale counties at .6 percent, and non-shale counties at -.4 percent.

The report also examined employment trends for 2013. In the first quarter of this year, employment in strong counties grew by .1 percent and moderate counties saw an increase of .2 percent. All other counties saw some sort of decrease in employment – weak shale counties contracted by -.6 percent and non-shale counties fell by -.4 percent

These weak employment growth numbers contradict industry experts and lobbyists who promised that oil and gas development in Ohio would create hundreds of thousands of jobs. So far, the numbers suggest that is not the case. Not only has employment growth been below expectations in these counties but recent reports contend that new jobs are being filled by out-of-state contractors and not Ohioans.

As we wrote about in December, Governor Kasich and lawmakers need to take a more proactive approach to ensure that as many Ohioans benefit from this economic expansion as possible. Lawmakers should push for a “Hire Ohio” policy that rewards companies that employ Ohioans and discourages companies from simply bringing contractors in from out-of-state.

The Levin College report is correct to point out that the state is still in the early stages of the shale exploration process. And the report does find that there are other short and medium term issues holding back further growth. Even so, the rosy economic expansion promises that were made by industry lobbyists and politicians seem to be falling far short at this time.