I live near an area where there is a large prevalence oil and gas refineries and O&G-adjacent industries. The men and women who keep these plants running work a grueling schedule and are often involved in fairly risky activities due to the nature of the stuff they are dealing with (flammable or toxic materials). Despite this, tons of locals flock to these jobs and there there is a huge surplus of available people who are seeking these jobs. By huge, I mean people testify to applying to these jobs for literal years before they ever get an opportunity (many don’t without connection). Entry level typically requires experience or an Associates degree. I should note that experience is helpful but not critical, the job is not easy but is not rocket science either. These jobs can generally get you to 6 figures in the first year, and most top out around 150K in a MCOL area. The benefits are generally excellent, some even have pensions. Yes, these companies are extremely profitable and I’ve already mentioned that the work is hazardous and has odd hours, but with the massive surplus of willing and able labor, why do these companies still pay so highly?
In: Economics
> extremely profitable
Not really. The industry as a whole has massive swings in profitability, sometimes high, sometimes low, even in the same year.
For example, in 2021, the 12-month trailing average profit margins for oil and gas production companies was 4.7%, but the average per quarter were as follows:
Q1: -22%
Q2: -1.4%
Q3: 3.2%
Q4: 31.3%
This is important to understand because with such big swings, they *have* to be very selective with who they hire. They’re not going to hire just any Joe Shmoe off the street simply because he applies for the job, because they can’t afford to pay someone a large salary who isn’t going to do a good job.
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