Report: Almost 1 in 7 North Dakota private sector jobs tied to oil and gas
Bismarck, ND - North Dakota’s thriving oil and gas industry accounts for nearly one in seven private-sector jobs covered by unemployment insurance, according to data that could have a big impact on how tax revenue flows to oil-impacted cities, counties and school districts.
Those jobs represented $5 billion of the total $17.5 billion in wages paid to workers counted in the report, which didn’t include most self-employed farmers but still encompassed more than 90 percent of the state’s private-sector employees, said Michael Ziesch, labor market information manager at Job Service North Dakota.
State lawmakers appropriated $120,000 last year for Job Service to identify all workers who should be included in oil- and gas-related employment for statistical purposes. Ziesch presented the report Wednesday to the Legislature’s interim Taxation Committee.
The updated data will play a key role as lawmakers consider making changes to the formula for sending tax revenue from oil and gas production back to oil-impacted areas.
“It’s a decision for this group to make, and we will,” said Sen. Dwight Cook, R-Mandan, chairman of the Taxation Committee.
The formula approved during the 2013 legislative session defined a hub city as one with at least 12,500 people and more than 1 percent of its private employees engaged in the mining industry, based on Job Service data.
Hub cities currently receive $375,000 per year in oil tax revenue for each full or partial percentage point of oil-related employment, while the largest school district within a hub city receives $125,000 per year for each percentage point.
Based on data available during the 2013 session, the hub city definition applied to Williston, Minot and Dickinson. But Ziesch said analysts “knew that was an incomplete picture” and did research to identify other industries related to North Dakota’s oil play.
Job Service identified 24,254 jobs as “direct” jobs attributed to oil and gas drilling, extraction, production and refining. That was followed by “related” jobs in the categories of transportation (10,173), infrastructure development (9,541), wholesale trade and manufacturing (6,114) and professional services such as engineers, consultants and lawyers (5,055).
“We did this at a work-site level, so the data we have are exhaustive,” Ziesch said, adding there were no multiplier effects used or “third-tier” jobs counted.
Based on the updated data, if the hub city formula were to go unchanged during the 2015 session, at least five additional cities would be eligible: Bismarck, Fargo, Jamestown, Mandan and West Fargo. Grand Forks would be right on the cusp, with 1 percent of its jobs being related to oil and gas, according to the report.
The report didn’t include the secondary employment effects of the oil and gas industry on sectors such as food, housing, health care and government services, which were considered not critical to the production of oil and gas wells. Ziesch said analysts identified 8,600 of the state’s 31,000 private employers as potentially having jobs related to oil and gas development, and they “had to draw the line somewhere.”
Job Service’s main source for the employment and wage data was quarterly tax reports of employers subject to state and federal unemployment insurance laws. The survey excluded all government workers.
Ziesch said 2014 data should be available in mid-summer 2015. Cook said the data should be updated annually because the revenue-sharing formula relies on it.
Counties with the most oil- and gas-related jobs:
Williams – 22,896
Stark – 8,374
McKenzie – 5,661
Ward – 4,364
Mountrail – 3,945.
Counties with highest percentage of oil- and gas-related jobs:
Slope – 88.4 percent
Dunn – 73 percent
McKenzie – 71.1 percent
Mountrail – 64.6 percent
Williams – 64.5 percent.