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Energy patch hiring—but paying workers less

Energy patch hiring—but paying workers less

Posted on: 8/30/2017 | Author: ATB Financial's Economics + Research Team

The plunge in oil prices has been devastating for many workers in Alberta’s energy sector—from the peak to the trough, about a quarter of all jobs were eliminated. Wages remained the highest in the country for those fortunate enough to keep working. But lately, there are signs those wages are coming down.

The average weekly earnings for employees in Alberta’s oil and gas sector fell to $2,171.75 in June of this year. That’s still nearly double the average paycheque for Albertans in all industries ($1,132), but it is down by 9.1 per cent from its peak.

The graph below shows a six-month moving average for wages in Alberta’s energy sector compared to the all-industry average. Energy sector wages followed a slight up-and-down pattern in 2014 and 2015, and reach a record peak in December of last year. They’ve been falling ever since.

This coincides with another recent labour market development in the energy sector: hiring. More than 17,000 new jobs (+14 per cent) have been added in oil and gas in the last year, making it one of the strongest sectors for job gains in the province. The difference is workers are being hired back at lower wages, allowing companies to add workers and control costs.

Despite the steady drop in earnings in the sector, they remain higher than they were five years ago and still well above the provincial average. Yet with the price of oil stuck below $50 per barrel, wages could continue to decline in the coming months as energy companies continue to keep a tight rein on costs.

Alberta average weekly earnings, graph

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