No crude joke: Big Oil pays regular workers well
Move over, Wall Street titans and Silicon Valley giants. When it comes to paychecks, Big Oil now looks like the best bet for U.S. workers.
Spurred partly by the shale boom, the median pay for energy workers last year was $123,000, according to data newly mandated by the U.S. That topped all sectors, including utilities, tech and health care. While energy chief executives made an eye- popping 120 times more, the gap with their employees was still the second-smallest among all industries.
What’s fueling this paycheck potency? First, a reliance on geologists, petroleum engineers and other highly skilled, well compensated professionals. Add to that the efforts needed to retain expertise — and lure young talent — after the recent oil price rout led to hundreds of thousands of job losses.
“They had to retain criti- cal employees at almost any cost,” said Bill Arnold, a former Royal Dutch Shell executive who now teaches energy management at Houston’s Rice University. “Companies had little managerial flexibility.”
Businesses across the country are dealing with labor shortages, and in the red-hot Permian shale basin in Texas and New Mexico, “you see it even more dramatically,” said Bob Sullivan of AlixPartners, a New York-based consultant to energy companies. “At some point, the wage pressure starts to get pretty high.”
Oil and gas companies are essentially paying out now for two epic hiring slumps that followed price crashes in t he t he mid-1980s, and again in the middle of this decade. They’ve forced the business to play catch-up, even as crude prices recover and drilling surges.
The 2010 Dodd-Frank financial reforms required public companies to disclose their CEO-to-worker pay ratio starting this year.