September 08, 2014
The proponents of fracking have made many big claims about its economic benefits. In addition to lower cost electricity, we are also supposed to get energy independence and a boom in jobs. The NYT picked up this theme with an article that touted an “energy boom” that is lifting the heartland. The piece claims that fracking related jobs have revitalized Ohio’s economy with Youngstown being at the center of the action.
The piece tells readers:
“Here in Ohio, in an arc stretching south from Youngstown past Canton and into the rural parts of the state where much of the natural gas is being drawn from shale deep underground, entire sectors like manufacturing, hotels, real estate and even law are being reshaped. A series of recent economic indicators, including factory hiring, shows momentum building nationally in the manufacturing sector.”
“New energy production is ‘a real game-changer in terms of the U.S. economy,’ said Katy George, who leads the global manufacturing practice at McKinsey & Company, the consulting firm. ‘It also creates an opportunity for regions of the country to renew themselves.'”
That sounds really impressive. Unfortunately the data do not seem to agree. The Bureau of Labor Statistics shows that manufacturing employment in Youngstown is still down by more than 12 percent from its pre-recession level as shown in the figure below. There is a comparable story with Canton.
Manufacturing Employment in Youngstown
Source: Bureau of Labor Statistics.
While fracking jobs may have helped bring these areas up from the troughs they experienced at the bottom of the downturn, employment in both metropolitan areas is still far below 2007 levels. No one thought either city was booming at that time. In short, the data do not seem consistent with the story told in this article.
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