Mining Employment Trends of 2007-09: A Question of Prices: Employment Trends in Mining during the 2007-09 Recession Can Be Better Understood through Analysis of Commodity Indices and Other Major Economic Indicators

By Davidson, Brian | Monthly Labor Review, April 2011 | Go to article overview

Mining Employment Trends of 2007-09: A Question of Prices: Employment Trends in Mining during the 2007-09 Recession Can Be Better Understood through Analysis of Commodity Indices and Other Major Economic Indicators


Davidson, Brian, Monthly Labor Review


Employment within the mining industry (1) followed a different pattern than that of most other industries during the 2007-09 recession. (2) (See table 1.) Indicators such as commodity prices, global demand for mining output, and industrial production help tell the story of how job growth within mining continued through the first 10 months of the recession while total nonfarm employment was falling.

Increasing energy and commodity prices and industrial production fueled job growth in mining, leading to an employment peak of 728,000 in the sector in September 2008, the highest level since June 1986. Employment then fell over the next 13 months before reaching a trough in October 2009, 4 months after the recession had ended. In the decade or so leading up to the recession, employment among the subsectors within mining followed similar long-term growth trends, while support activities for mining was the primary source of employment gains in the sector.

At the most recent peak of mining employment, in September 2008, 69 percent of the employment was in oil and gas extraction and in support activities for mining. Both of these subsectors are associated primarily with oil. Support activities involve the maintenance and drilling of wells, whereas oil and gas extraction, as its name implies, focuses on the extraction of petroleum resources.

Similarly to oil and gas extraction and to support activities, coal mining saw substantial job growth before the peak in the business cycle in December 2007. Coal mining represented 11 percent of mining sector employment in September 2008. Employment in metal ore mining rose during the first few months of the recession and then dropped, whereas employment in nonmetallic mineral mining began falling before the recession along with construction activity and continued to do so throughout the recession.

Effects of global energy demand

Global energy production and global energy demand increased together before the recession and during the first few months of it. During 2007, China and India, two of the world's largest economies, saw their petroleum consumption increase by 3.7 percent and 4.1 percent, respectively, while worldwide consumption increased by only 0.7 percent. (3) Given the difficulty of increasing crude oil supplies on a timely basis and the low absolute value of the price elasticity of demand for oil, the price of oil rose sharply. The spot price for West Texas Intermediate crude oil reached a high of $133.93 per barrel in June of 2008. As prices rose, businesses and consumers were spending a disproportionate share of their earnings on oil products. Because of the worldwide decline in industrial production, demand for crude oil dropped near the end of summer 2008. (4) From 2007 to 2009, global consumption of petroleum declined by over 1.6 million barrels of petroleum per day. (5)

Before the peak in oil prices, as demand for energy increased, more exploratory and development wells were drilled. (6) In 2008, 355 million feet were drilled, nearly twice as many feet as were drilled during 2001 and 46 million more feet than in 2007. (7) Drilling activity led to increased demand for support activities. An employment peak in support activities for mining occurred 10 months into the recession. Employment in support activities for mining accounted for 67 percent of job gains in mining from the start of the recession to the September 2008 peak in total mining employment and in production in the industry of drilling of oil and gas wells. (8) Oil and gas extraction contributed 23 percent of job gains in mining during this period. Employment in oil and gas extraction reached a high 3 months later than employment in support activities. As nonenergy industrial production lessened, demand for energy resources, and thus employment in mining, fell with it.

From September 2008 through June 2009, mining employment fell by 92,000. Support activities for mining accounted for 74 percent of total employment losses in mining. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Mining Employment Trends of 2007-09: A Question of Prices: Employment Trends in Mining during the 2007-09 Recession Can Be Better Understood through Analysis of Commodity Indices and Other Major Economic Indicators
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.