Natural gas boom brings jobs, shapes regional workforce
GARFIELD COUNTY ” In some ways, Garfield County is growing out of its position as an economic stepchild to neighboring Pitkin and Eagle counties.
Fueled by the natural gas boom in western locales, Garfield County’s economy added 1,738 workers in 2007, according to the Colorado Department of Labor. The work force grew by 7 percent to 27,206 workers from 25,468 the year before, the state’s latest data showed.
“I think it’s going great guns,” Garfield County Commissioner John Martin said of the economy.
Garfield County’s surge far outpaced growth in Eagle County. The work force there grew by 1,263 workers, or 4 percent last year. Eagle County still has more business establishments and more workers, but Garfield County is closing the gap.
Eagle County had 3,604 establishments employing an annual average of 31,845 workers in 2007, the labor department said. Garfield County had 2,840 businesses and 27,206 workers.
Meanwhile, Pitkin County’s business base and work force were stagnant between 2006 and 2007. The number of businesses grew marginally from 1,938 in 2006 to 1,959 last year. The number of workers was nearly unchanged at 16,858, the labor department reported.
Pitkin County hasn’t experienced drastic growth in businesses and the work force as its neighbors in this decade. Despite a booming economy, Pitkin County’s growth is offset to a large degree by businesses migrating downvalley to seek cheaper rent or less expensive commercial space to buy. That often requires them to relocate into Eagle or Garfield counties. The exact number of relocations is unknown.
Growth fueled by gas industry
Gas exploration and extraction is driving Garfield County’s work force growth, Martin said. The gas-rich Piceance Basin in the western part of the county has become what some observers call “ground zero” for energy development. It appears bound to stay that way ” both presidential candidates are calling for more production of domestic natural gas.
There were 2,550 drilling permits for gas wells issued by the state of Colorado in Garfield County last year. That was up 38 percent from the prior year.
The gas industry is driving more than work force numbers. Martin said that nearly 66 cents of every dollar Garfield County collects in property taxes is paid by the oil and gas industry.
Unlike the oil shale bust in the 1980s, which crippled towns like Rifle and Parachute, this boom appears more sustainable. Even when the drilling slows, Martin said, the work force will remain high to monitor the extraction. He said he has been told by gas industry officials that 60 percent of the work force will be needed after drilling.
The labor department’s numbers provide a glimpse of how the gas boom ramped up Garfield County’s work force.
The number of people employed in construction went from 4,251 with 679 firms in 2006 to 4,759 workers with 710 firms last year ” an increase of 508 workers or 12 percent.
Construction firms often provide support activities for gas wells, such as cutting roads and scrapping pads.
The number of people employed in natural resources and mining ” the labor department category that includes gas extraction ” increased from 2,346 to 2,518 in 2007.
However, the labor department numbers have a flaw ” they reflect where an employer is headquartered. For example, if a construction company is located in Carbondale, which is Garfield County, but builds McMansions in Aspen, which is Pitkin County, the state counts those workers as being in Garfield County. The statistics don’t account for the lines of commuting construction workers flowing into Pitkin County each morning.
Employment driving up pay
The growth of the gas industry has had a multiplying effect in Garfield County. Areas of the economy with no direction connection to construction also are growing. Restaurants and bars employed 116 more people in 2007 than the year before. The leisure and hospitality sector employed 202 more people last year.
(True to its conservative roots, government in Garfield County didn’t grow in 2007. There were 984 workers in state, federal and local government in 2006; there were 983 workers last year.)
The gas boom also has brought high paying jobs to Garfield County and forced other businesses, within and outside the county, to increase pay. The average weekly gross pay in Garfield County increased 9 percent in 2007 to $814. That’s the equivalent to an annual wage of $42,328.
Garfield County is closing the gap with Pitkin County, where the average weekly wage gross pay was $854 last year, or $44,408 annually.
There is an abundance of anecdotal evidence that workers are choosing to work closer in downvalley towns where housing is more affordable. The Roaring Fork Transportation Authority said last year winter that high-paying gas patch jobs made it difficult to hire bus drivers and mechanics. Basalt lost its public works director this summer when he took a similar position in New Castle, where he lives. Stories like those abound.
Martin said even if workers take pay cuts on downvalley jobs, they offset the loss by shortening their commutes. They spend less money on gas and more time with families.
For probably the first time ever, Garfield County workers made more than their counterparts in Eagle County last year. While the average weekly wage shot from $746 to $814 in Garfield County, it grew more modestly from $750 to $768 in Eagle County.
The average worker in Garfield County is pulling in $42,328 annually. The average worker is pulling in $39,936 in Eagle County.
New Castle, Silt and Rifle used to be bedroom communities for Aspen and Snowmass Village workers. That trend appears to be fading fast, and it raises the prospect that the labor shortage will grow even more severe for Aspen and Vail.
“Workers, particularly in Garfield County, have wage choices today that they have not seen since the Oil Shale days in the early 1980s,” said Colin Laird, director of Healthy Mountain Communities, an organization that works on regional issues.
“Pitkin County employers ” private, public, and nonprofit ” face a triple whammy of challenges when it comes to employees,” Laird said. “It’s tougher to get workers and just as tough to keep them because of the increase in well-paying jobs in Garfield County.
“Increasing commuting costs due to $3 to $4 per gallon gasoline eats away the incentive to commute for a potentially higher wage in Pitkin County. Instead, workers look for, and increasingly find, an alternative in Garfield County,” Laird said. “[And] high housing costs make it difficult to replace and recruit workers lost to Garfield County employers.”
Martin said the full employment and creation of high-paying jobs in Garfield County has led to consequences that are obvious and others that aren’t so apparent. It’s no secret, for example, that good pay in the gas patch has made it difficult to fill positions in hotels and restaurants. Workers don’t want to clean rooms, mow lawns, roof houses or take other low-skill jobs when the pay is better in the gas patch.
“That is really a struggle,” Martin said. “They’re taking anybody and everybody.”
Less apparent is that easy availability of high-paying jobs might be a long-term disadvantage for some workers tied to the area. There is an increasing number of young men dropping out of high school before they graduate, Martin said. It’s tough to persuade youngsters who can earn $90,000 a year that they should stay in school for training when their parents make only $55,000 in office jobs, he said.
Programs are being offered to teach trades to young workers so that if the jobs they are capitalizing on now disappear, they will have broader skills to make them more marketable in the future.
Then there’s the problem of success breeding success. An offshoot of the booming economy is soaring housing costs and a generally high cost of living. Even though Garfield County’s average wage is up, it isn’t keeping pace with soaring housing costs.
“There’s no way it will happen,” Martin said. “It’s a dilemma for us.”
But so far, homeowners in Garfield County have avoided the credit pitfalls that have plagued residents of so many other parts of the country. County government officials anticipated there would be 125 foreclosures on mortgages this year. The county is on pace for less than 100, Martin said.
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