North Dakota, and indeed some of the central plains states (Nebraska has been another big winner) have become a sort of sheltered world aka the “Australia” of America. The natural resources economy has been one of the true green shoots – right next to the taxpayer economy centered around Washington D.C.
CNNMoney takes a look at the wonders that surround the Bakken Shale in North Dakota – as long as you are willing to stomach the weather, and lack of nightlife, the economic rewards are quite substantial.
- Believe it or not, a place exists where companies are hiring like crazy, and you can make $15 an hour serving tacos, $25 an hour waiting tables and $80,000 a year driving trucks. You just have to move to North Dakota. Specifically, to one of the tiny towns surrounding the oil-rich Bakken formation, estimated to hold anywhere between 4 billion and 24 billion barrels of oil (NYSE:USO).
- …….along with the manpower needed to extract the oil, the town is now scrambling to find workers to support the new rush of labor. Watford City is at the center of the Bakken formation. While it is home to less than 3,000 permanent residents, there are about 6,500 people there right now, as job hunters relocate to seek out high-paying jobs.
- Aaron Pelton, the owner of Outlaws Bar & Grill in Watford, said his sales have been nearly doubling every year — and it’s only getting busier. Servers at his restaurant make about $25 an hour when tips are factored in, and kitchen staff employees make around $15 an hour.
- ….McMullen now works as a nanny in exchange for housing. Her husband, who worked on behavior management programs for a school system in North Carolina where he took home about $1,600 a month, found a job working in the oilfields where he makes that same amount of money in one week — adding up to an annual salary of about $77,000. “We want to be debt-free, so we came here to play catch-up,” said McMullen. “But when I came here, I thought I was on Mars. It’s just so crazy that the rest of the country has no jobs, and here’s this one place that doesn’t have enough people to fill all the jobs.”
- With oil companies paying top dollar to the new onslaught of workers they need — doling out average salaries of $70,000, and more than $100,000 including over-time — other local businesses are boosting their pay to compete.
- Entry level jobs everywhere from restaurants and grocery stores to convenience stores and local banks pay a minimum of $12 per hour, according to the McKenzie County Job Development Authority. Truck drivers make an average of $70,000 to $80,000 a year.
- The pay bump was even bigger for Nathan Pittman, who was thinking about retiring from the trucking company he owned in Indiana, but put his plans on hold when he heard about the boom. Pittman quickly landed at a trucking company in Watford making $20 an hour with “a lot” of overtime. In all, his salary more than doubled to about $2,225 a week in Watford. “You can make at least a thousand dollars a week more here than anywhere else in the country,” he said.
- “There’s not a business you can start in North Dakota right now that wouldn’t make it,” said Pittman.
- Gene Veeder, executive director of McKenzie County Job Development Authority, which includes Watford City, said he gets calls every day from developers wanting to start housing projects. But for now, good luck finding a place to live. Among the inconveniences the boom has caused for locals — including a higher cost of living, more traffic and higher turnover rates among businesses that lose employees to the oilfields — there’s a huge housing shortage. “It’s been absolutely crazy lately — we just can’t build fast enough,” said Shawn Wenko, workplace development coordinator for the city of Williston. “We’ve probably seen 2,200 housing units come online this year, but we probably have demand for more than 5,000.”
- Wenko said one-bedroom apartments can run at around $1,500 a month, while two to three bedroom apartments are often around $3,000. Local hotels and motels are at 100% occupancy. Some companies have cashed in on the low housing supply and have built more affordable workforce units, known as “man camps”, which are basically clusters of dorm-style trailers that house workers.
- “If you were to come up right now, you would see campers stuffed in about every corner, people sleeping in their cars in the Wal-Mart parking lot and tents popping up here and there,” said Wenko. “It’s best to secure housing before you come here, or else you’ll be staying in your car for a while too — and North Dakota winters tend to get pretty cold.”
Trader Mark is the author of Fund My Mutual Fund.