Cross posted from Pruning Shears.
On Monday the New York Times ran a piece by Nelson D. Schwartz titled “Boom in Energy Spurs Industry in the Rust Belt.” As straight news articles go, it’s not very straight. For some reason, the Times likes to give the occasional sloppy, um, kiss to the fracking industry, and this seems to be the latest in the series.
Near the start is a “correlation equals causation” argument: Fracking is big in northeast Ohio; factory hiring has ticked up in northeast Ohio; therefore fracking has led to the uptick:
Here in Ohio, in an arc stretching south from Youngstown past Canton and into the rural parts of the state where much of the natural gas is being drawn from shale deep underground, entire sectors like manufacturing, hotels, real estate and even law are being reshaped. A series of recent economic indicators, including factory hiring, shows momentum building nationally in the manufacturing sector.
Schwartz provides one example of actual causation, a pipe mill that employs 350 workers. That’s definitely good news for those employed there, but is it an example of the kind of region-transforming development that would justify the expansive tone? He notes the site used to house a mill that employed 1,400 people when it closed in 1979. And even though 1,400 dwarfs the number now working there, it only represents the last gasp of a dying industry. If you want to compare it to a “good old days” picture you need to go back a couple of years – to before Sept. 19, 1977, Black Monday, when 5,000 people were laid off. If you really want to talk about a reshaping, those are the kind of employment numbers you need to see. (Towards the end of the article Schwartz calls it a “nascent renaissance,” which is a considerably scaled down vision from the top of the piece.)
An anecdote is not data, and the data is out there for those who want to find it. Dean Baker looked at manufacturing employment in Youngstown and found that it is still way down from before the recession. As for fracking’s contribution to the employment picture, a study earlier this summer found: “Since the beginning of the recession, the mining and logging sector, which includes the shale gas industry, has only created 1,300 jobs.” So even when bundled with the numbers of a larger sector, its employment contribution is tiny.
Schwartz’ “momentum building nationally” wording is problematic, too. People don’t live in aggregate. Industry jobs often go to out-of-state workers, and even regional employment gains may be temporary. Once again, we aren’t talking steel mills here. There aren’t thousands of locals being employed long term at good wages, and implying otherwise is a disservice to readers. Considering that employment has increased less than 1 percent in the counties with the highest number of shale wells, the boom in energy doesn’t seem to be reaching many ordinary Ohioans.
So if manufacturing isn’t getting a boost from fracking, what about hotels, real estate and law? That last one is hard to figure from the article; Schwartz quotes a managing partner at a law firm who is considering hiring more people. How exactly does that add up to an entire sector being reshaped? He doesn’t mention how real estate being transformed either, though presumably he doesn’t mean in terms of people being evicted from their homes, having their houses razed or not being able to buy insurance policies for them.
As for hotels, Schwartz mentions an investor planning to build one. Again, not revolutionary. Now, hotels can see a bump in revenue as migrant workers come in to build infrastructure, but that is a temporary benefit. Funny enough, it’s become something of a fallback position for the industry as the job bonanza stubbornly refuses to materialize: “We need to look downstream from the drilling rig and realize all the auxiliary economic activity that swirls around this thing.” Not jobs, mind you, but auxiliary economic activity.
Finally, the article leans heavily on boosterism (“a real game-changer in terms of the U.S. economy”) and hopeful projections (“production of shale gas and so-called tight oil from shale could help create up to 1.7 million jobs nationally. Many of those jobs are expected to end up in places like this”) from industry consultants. But none of the spin is given any kind of scrutiny, it is just uncritically passed along.
Look, I’m as happy as the next guy that the New York Times decided to parachute in and give the area its unvarnished appraisal (“Youngstown and surrounding Mahoning County is hardly Silicon Valley or even Pittsburgh”), but getting a story like this right requires a little more than a visit to the chamber of commerce and a deli. The next time they pack up their pith helmets and mosquito netting for a trip here, it would be nice if they brought along a little curiosity too.
Picture from Alec Perkins licensed under Creative Commons