Could North Dakota Lose 20,000 Jobs By June?


“My prediction is we’re down to 50 rigs by June,” Jim Arthaud, CEO of MBI Energy Services, based in Belfield, told CNN. “I’d say we’ll lose 20,000 jobs by June,” said Arthaud.

That’s an ugly prediction, but what sort of shape would it leave North Dakota’s labor markets in? Here’s a chart showing the size of North Dakota’s labor force since 1985 (through November of this year, ND Job Service hasn’t released numbers for December yet). From November 2013 through November 2014 the state added 16,000 employed workers. If Mr. Arthaud’s prediction comes true, the state would basically lose all of the jobs it gained in the last year, plus some.


Of course, it’s hard to say how many of those lost jobs would be due to the oil slump or just regular seasonal lay-offs (North Dakota, because of our inclement weather, has a very seasonal job market as the graph shows). The proof will come around June. Will hiring pick up again? Or will thee state continue to shed jobs?

It’s an important question. It has tax revenue ramifications (losing jobs means less income tax revenue, less sales tax revenue, etc.). It also has spending ramifications. A lot of these workers are going to file for government programs when they lose their jobs. The people who moved here to find work aren’t necessarily going to just move away again if they lose those jobs. At least not right away. That’s going to hit the state’s budget.

In November, the state had 9,757 unemployed workers. Could that number be tripled by June?

This doesn’t mean a bust is coming. Even losing 20,000 jobs, North Dakota would still have an labor force significantly larger than just a few years ago. But there is going to be some pain in the short-term.


Update: North Dakota’s top oil regulator, Lynn Helms, pushes back against some of this pessimism during an interview this morning with Scott Hennen. “Nobody that I know of is building budgets around a 50 rig count.”