Alberta’s blue-collar workers worst off in oil slump

Share

Lower-paid employees and labourers in Alberta's natural-resources sector have been hit the hardest from the plunge in oil prices.

The loss of jobs among lower-income earners and blue-collar workers is nearly quintuple the losses among the highest-paid workers since oil started cratering a year and a half ago.

More than 14,500 low-income earners in the natural-resources sector were laid off from September, 2014, through last year, according to Statistics Canada. That is a drop of 35 per cent among Albertans who made less than $1,080 a week.

In comparison, only 3,095 of the highest-paid natural-resources employees were laid off over the same period. That is a decline of 7 per cent among those earning a minimum of $2,096 a week.

The majority of the job losses in the industry was among blue-collar positions, including rig operators and oil-well drillers.

"No doubt it is easier to terminate the employment of lower-income workers who may be on short-term contracts compared with employees who are considered permanent and salaried," said Andrew Fields, analyst with Statistics Canada.

Over all, the western province lost more than 30,000 natural-resources jobs last year.

"A lot of senior people are being laid off with no place to go. They are overqualified and companies are scared to bring them along," said Dave Larouche, a manager with Diversified Staffing Services employment agency.

Mr. Larouche said his Red Deer office regularly has lineups for manual labour jobs such as construction and snow shovelling. "It is easier for them to be placed. But they are also used to making a significant amount more than what is out there at the moment," he said.

Wages are starting to ease as former energy workers flood the labour market. The commodities boom was responsible for driving up salaries as businesses competed for employees. In September, 2014, earnings in the natural-resources sector in Alberta hit an average of $2,144 per week, the most lucrative across all industries and more than double the national average.

"There's a lot more desperation to the nature of the jobs. A lot of people are asking for immediate work. They will take anything," said Chris Massie, operations manager with About Staffing, an Alberta employment agency.

"It took the majority of last year for candidates to say 'I am willing to take a 20-per-cent pay cut,'" he said.

Andrew Vink is one of those candidates willing to work for less. An engineer who has worked in the oil industry for three decades, Mr. Vink was laid off in October. Mr. Vink told his former employer that he would take a pay cut in order to keep his job but to no avail. Other energy companies such as Canadian Natural Resources Ltd. reduced salaries instead of slashing jobs.

Mr. Vink said he is considering contract work as well as jobs outside of the energy industry. "If the work continues to exist and people are let go, there is an opportunity for someone like me to do a contract for a short period of time," he said.

What has made Alberta's jobs market appear even bleaker is the dramatic reversal in job creation. For five years, the province's job growth outpaced the national average. Today, Alberta's unemployment rate is 7 per cent, the highest since the Great Recession. The number of Albertans receiving employment insurance has skyrocketed and energy companies are expected to further reduce spending if oil prices remain low.

Amid the rout, some specialists have managed to find full-time work. David Van Den Assem lost his job as a sustainability adviser at a major oil company last February and found a job with a tech firm in October. When Mr. Van Den Assem was searching for work, he said he saw two to three openings a week that looked promising. "That made me think it is not as gloomy as people are making it out to be." he said.

However, more layoffs are expected this year with the price of oil hovering around $30 (U.S.) a barrel, down 70 per cent from 2014.

"The first quarter will be tough. I see more layoffs coming. People are getting a bit more desperate for work. Their employment insurance is going to run out," Mr. Larouche said.