Water Well Journal

December 2015

Water Well Journal

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WWJ December 2015 21 Twitter @WaterWellJournl This large demographic shift, referred to in the industry as the "Great Crew Change," could see up to 50 percent of the oil and natural gas industry's skilled workers retire within the next five to seven years. As this begins to occur, more and more young workers will have opportunities to begin ful- filling careers in the industry. (API, American Petroleum Inst itute 2015) Last September, while touring a Shell safety training facility in Louisiana, I was told by trainers when the driller retires from an oil rig, it can create a major safety issue. If the top job is va- cated, and no other trained drillers are available, 24 jobs on that rig change as each crew member moves up one job in the chain and a new driller is trained. For about a month, the trainers say the newly reorganized crew can be a significant safety concern as everyone learns their new jobs. Other surveys agree. A series of arti- cles produced by Gallup research in late 2014 and early 2015 examined baby boomers in the workforce. According to the reporting of Frank Newport in a Jan- uary 2015 Gallup article, only a third of baby boomers over 68 are staying in the workforce. While about eight in ten boomers in their early 50s are in the workforce, the percentage employed drops to about 50% for boomers who are 60, and the proportion accelerates down- ward with each year of age thereafter. Only about a third of those aged 67 and 68—the oldest boomers—are still working in some capacity. (Newport 2015) Extraction workers by the numbers If you've worked in the groundwater business for very long, you know it's a small profession. There are less than 1000 licensed professionals in many states (Figure 1). As of May 2014, Delaware and Vermont had only 40 extraction workers, includ- ing licensed professionals, per state. By contrast, California has almost 2000 total workers while Texas has more than 2400. According to the Texas state licensing database, about 1750 of the 2400 are licensed professionals. According to the Federal Bureau of Labor Statistics, the profession as a whole reported only a little more than 18,500 workers in May 2014. Self-employed workers break all the rules for retirement When building a business from the ground up, predictions of economists on the retirement age are often incorrect. "Self-employed Americans and the workers they hired accounted for 44 million jobs in 2014, or 30% of the national workforce," according to a Pew Research Center analysis of data from the U.S. Census Bureau. Of these 44 million jobs, Pew found a whopping 14.6 million were self- employed. The report also found 68% of the construction sector was either self-employed or worked for businesses owned by the self-employed. This is a pretty strong representation of the groundwater industry across the United States. When a small business loses a driller by death or retirement, that loss could mean closure of the business—espe- cially if that driller is a family member and there is no one to take their place. There are many drilling families where owners of the business are well into their retirement years and still at the office or out in the field. It is not un- usual for a husband-wife ownership team in their 70s and 80s to still come to work every day, even 60 years after starting their business. A study by the Bankers Life Center for a Secure Retirement, conducted in spring 2015 ("New Expectations, New Rewards: Work in Retirement for Mid- dle-Income Boomers"), surveyed more than 3000 middle-income Americans (annual household income between $25,000 and $100,000 per year). The survey found: "Four in 10 (42%) working retirees indicate they are self- employed or small-business owners." The study found many potential re- tirees who were surveyed plan to work into their 70s. "Half (49%) of employed middle- income Boomer retirees expect to work beyond age 70 or at least as long as their health will allow." (Bankers Life Center for a Secure Retirement 2015) If older workers don't retire, will there be enough jobs for younger workers to fill? Some people have expressed concern that older workers staying on in the profession might make it harder for younger workers to move up into better positions, especially driller positions. According to economists, this fear follows the "Lump of Labor" theory— the belief there are a fixed number of jobs in the economy, no matter how many workers you have to fill them. The Pew Charitable Trusts issued a brief on the subject in September 2012, titled When Baby Boomers Delay Re- tirement, Do Younger Workers Suffer? Their research found the "Lump of Labor" theory was incorrect: Retaining older workers does not hurt the job prospects of younger ones, meaning that protecting Boomers from downward mobility goes hand in hand with promoting the upward mo- bility of youth. (Pew Charitable Trusts 2012) Retirement won't hurt the numbers much, if at all A Federal Bureau of Labor Statistics December 2013 article, Occupational Employment Projections to 2022, stated the economic decline following the 2008 Great Recession caused more de- cline in the construction industry than retirees. Employment in most construction oc- cupations declined more sharply than among other occupations following the 2007-2009 recession and the hous- ing bubble that had preceded it; [by contrast] over the 2012-2022 decade, many of these hardest hit occupations are projected to recover from their re- cent lows. (Bureau of Labor Statistics 2013) "I've been a driller most of my life," he says. "I'll keep my license as long as they'll let me. It's who I am and what I do ." CHANGE continues on page 22

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