Energy Industry Continues to Lead Nation in Wage Growth

Starting wages in the mining, oil, and gas exploration industry shot up 6 percent in 2012.

Natural-gas rigs dot the landscape in Pennsylvania.
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The booming energy industry isn't just padding the bank accounts of Big Oil. Workers, too, are reaping the rewards of the resurgence in domestic oil and gas production.

Overall wages for full-time workers in the mining, oil, and gas exploration industry jumped almost 6 percent in 2012, according to new data from salary comparison website PayScale, the best annual growth recorded since the company started tracking wage trends in 2006. The 12-month percentage change in national wages was 3.5 percent, also the best figures seen since 2006.

"The mining and gas industry is on fire," says Katie Bardaro, lead economist at PayScale. "They took a hit in 2009 just like everybody else, but they came back sooner and stronger than other industries."

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That's because even in a recession, there's still healthy demand for services the energy industry provides, Bardaro says. After all, recession or no recession, Americans still need electricity to light their homes and fuel to power their vehicles.

That, coupled with the discovery of massive stores of natural gas and oil in North America has further brightened the prospects for the industry, making the domestic energy industry one of the best success stories of the past several years.

"The jobs story in the natural gas industry is really a positive one," Daniel Whitten, spokesman for America's Natural Gas Alliance, wrote in an E-mail. It's not just that they are well-paying jobs—which there are—but there also is substantial jobs growth."

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According to financial analytics firm IHS Global Insight, the total number of jobs supported by the nation's shale regions is expected to surge to 1.6 million by 2035.

"These aren't just direct jobs in the field but also related jobs for service providers, truck drivers, engineers and others," Whitten adds. "The jobs extend to manufacturers, hotel workers, and construction trades, so the benefits really are pervasive throughout the economy."

Here's a look at the five best industries for wage growth in 2012:

Industry 12-Month Change (Q4 2011 to Q4 2012)
Mining, Oil & Gas Exploration 5.8 percent
Real Estate & Rental Services 4.5 percent
Professional, Scientific & Tech Services 4.3 percent
Manufacturing 4.1 percent
Utilities 4.1 percent
National Average 3.5 percent

Source: PayScale

A handful of other industries also outpaced the national average in wage growth including real estate and rental services, manufacturing, and utilities. Some of the "losers" of the year included battered industries such as construction and retail, which face challenges heading into the new year.

"Construction is still below the national average but it's made significantly positive improvement," Bardaro says. "It was taking like crazy in 2011, but now you've come to the point where most industries are levelling off."

Here's a look at the five worst industries for wage growth in 2012:

Industry 12-Month Change (Q4 2011 to Q4 2012)
Business Operation Support Services 1.7 percent
Arts, Entertainment & Recreation 2.3 percent
Wholesale Trade 2.5 percent
Healthcare & Social Assistance 2.7 percent
Retail 2.9 percent
National Average 3.5 percent

Source: PayScale

But although some industries lagged the national average, numbers are still improving—something that couldn't be said just a few short years ago.

"2012 was a really encouraging year," Bardaro says. "Macroeconomic indicators were generally rising. They might have been rising a little more slowly but just the fact that they were rising means we are recovering."

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But looking forward to 2012, Bardaro's crystal ball is cloudy, primarily due to the uncertainty roiling Washington. Policy deadlock and future "fiscal cliffs" continue to make businesses wary, which could translate into a pullback in wage growth.

"[Last quarter] we still saw a rise even with that uncertainty but that uncertainty is rolling over," Bardaro says. "They struck a deal but it kind of wasn't the final deal. There's hope that [wages] will still grow, but whether it will grow at the same rate? It's hard to tell."

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