As plummeting oil prices trigger layoffs in Oklahoma’s oil and gas sector, the job market is beginning to receive more scrutiny from the media, elected officials, and business leaders. Yet there was reason to be concerned about the state’s employment picture long before oil prices started to dip. We just haven’t been paying close enough attention.
If you followed the economic news and the press releases of elected officials over the past seven years, you might have gotten the impression that in Oklahoma we experienced ‘recession light’. But popular talking points about Oklahoma’s economic resiliency and a teflon-tough job market have cloaked an underlying and ongoing structural deficit in employment across all sectors.
Our statewide unemployment rate (currently 3.9 percent) is deceptively low because the official unemployment rate statistic does not count everyone who is out of work. The official unemployment rate excludes the following by definition: the longest-term unemployed, discouraged job seekers, people who have dropped out of the formal labor market entirely, and people currently working part-time jobs who are really in need of full time work.
But even that more accurate measure fails to adequately capture the extent of unemployment. First, because of built-in survey bias that leads to underreporting (in short, people are ashamed to admit that they can’t find work). And second, because the availability of employment has always varied significantly across Oklahoma, with some counties reporting much higher unemployment than others.
One way to bring clarity regarding the overall health of our labor market is to ask a simple question: is job creation keeping pace with population growth? In Oklahoma, as in most places in the U.S. since the Great Recession, the answer is no.
As of January of this year, Oklahoma had added 62,100 total net jobs since the early days of the recession in December 2007. That’s better than some states, but it’s not enough. Oklahoma needed to add 136,400 net jobs to keep up with our growing working age population, which grew 8.5 percent during the same period. That means Oklahoma maintains a jobs deficit of 74,300, as represented by the red portion of the chart above.
If we care about full employment, we need to be focused on all sectors and all parts of the state. Job losses in the oil and gas sector are bad news, both for the people out of work and for the state’s economy. But these are temporary job losses caused by price shocks – those jobs will come back. Can we say the same about the thousands of jobs lost during the Great Recession, and the thousands more lost to stagnant job growth since? No. And that’s not good news for Oklahoma workers.