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
Its not just “supply and demand sets the price”. The price can influence supply. People make job decisions based on both financial and personal factors. Industrial jobs tend to be unsafe, less convenient, and in less desirable places to live. So there is more need for the financial benefit to outweigh the personal sacrifice to get a strong supply of workers.
There may also be unions that negotiate contracts to enforce minimum pay across the industry, turning it from “less pay = fewer applicants” to “less pay = lawsuit or strike”.
That said, supply and demand may not be as imbalanced as you assume:
The job requires technical skills and professional training. They’re not paying entry level interns fresh out of school 150k, they’re paying experienced workers who are looking for stable pay and good benefits. You said it yourself: it takes years of experience and networking connections to get hired. Not all applicants are qualified, and thus don’t fill the demand they are looking for.
Large # of companies in the area also means lots of competition. If you don’t hire a good candidate, someone else will. If you offer to pay less, there’s lots of other nearby options they can apply to instead. So although you have a high supply of workers, the local demand is also very high and there is less risk to an applicant if they reject a bad offer.
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