Well, if your job is linked to the energy sector, the over 50% decline in global crude prices might not be an undiluted blessing. In fact, you might even lose your job due to the Oil Crash. This is precisely what’s happening in states that are at the epicenter of the shale oil revolution in the US. Expect more job losses in the future as drillers hold off on new exploration and mothball existing rigs. If you work for a rig manufacturer, expect job cuts as drillers stop ordering new rigs. Besides direct job losses, expect the loss of oil jobs to impact non-oil jobs in local economies dependent on oil or oil-related services. The fallout can be quite staggering as far as the overall jobs picture is concerned.
It’s easy for consumers to get excited about the current crash in oil prices. It’s like getting a pay raise or a tax cut. Instead of your trips to the pump walloping your wallet hard, you can buy more gas with less money and you have more cash to spend on other things. This increase in discretionary spending can boost retail sales and other sectors. So far so good, right?
The harsh reality of job losses caused by the Oil Crash was brought home by energy company Baker Hughes’ recent announcement that it plans to cut 7000 jobs from its payroll. The oil industry service and tool provider also announced a 20% cut in its capital expansion plans. This is just one company in one section of the oil industry. The potential job losses can be quite staggering and the loss of thousands of oil, oil-related, and oil economy jobs might cast a dark shadow on the US’ otherwise improving employment numbers. Unless other segments of the US economy, like services and manufacturing, firm up relatively quickly, the hemorrhaging of oil jobs can only push US jobless figures up and threaten the US’ overall economic recovery.