Monthly Labor Review • April 2011 19

The 2007–09 Recession: Mining

Brian Davidson Employment within the mining industry1

 followed a different pattern 

than that of most other industries 

during the 2007–09 recession.2 (See table 1.) 

Indicators such as commodity prices, global 

demand for mining output, and industrial 

production help tell the story of how job 

growth within mining continued through 

the first 10 months of the recession while 

total nonfarm employment was falling.

Increasing energy and commodity prices 

and industrial production fueled job growth 

in mining, leading to an employment peak 

of 728,000 in the sector in September 2008, 

the highest level since June 1986. Employment then fell over the next 13 months before reaching a trough in October 2009, 4 

months after the recession had ended. In 

the decade or so leading up to the recession, 

employment among the subsectors within 

mining followed similar long-term growth 

trends, while support activities for mining was the primary source of employment 

gains in the sector. 

At the most recent peak of mining employment, in September 2008, 69 percent 

of the employment was in oil and gas extraction and in support activities for mining. Both of these subsectors are associated 

primarily with oil. Support activities involve the maintenance and drilling of wells, 

whereas oil and gas extraction, as its name 

implies, focuses on the extraction of petroleum resources. 

Mining employment trends 

of 2007–09: a question of prices

Employment trends in mining during the 2007–09 recession

can be better understood through analysis of commodity indices 

and other major economic indicators

Brian Davidson is an 

economist in the Division 

of Current Employment 

Statistics in the Office 

of Employment and 

Unemployment Statistics 

at the Bureau of Labor 

Statistics. Email: davidson.

brian@bls.gov.

Similarly to oil and gas extraction and to 

support activities, coal mining saw substantial job growth before the peak in the business cycle in December 2007. Coal mining 

represented 11 percent of mining sector employment in September 2008. Employment 

in metal ore mining rose during the first few 

months of the recession and then dropped, 

whereas employment in nonmetallic mineral mining began falling before the recession 

along with construction activity and continued to do so throughout the recession. 

Effects of global energy demand

Global energy production and global energy 

demand increased together before the recession and during the first few months of it. 

During 2007, China and India, two of the 

world’s largest economies, saw their petroleum consumption increase by 3.7 percent 

and 4.1 percent, respectively, while worldwide consumption increased by only 0.7 

percent.3 Given the difficulty of increasing 

crude oil supplies on a timely basis and the 

low absolute value of the price elasticity of 

demand for oil, the price of oil rose sharply. 

The spot price for West Texas Intermediate crude oil reached a high of $133.93 per 

barrel in June of 2008. As prices rose, businesses and consumers were spending a disproportionate share of their earnings on oil 

products. Because of the worldwide decline 

in industrial production, demand for crude 
The 2007–09 Recession: Mining

20 Monthly Labor Review • April 2011

oil dropped near the end of summer 2008.4 From 2007 to 

2009, global consumption of petroleum declined by over 

1.6 million barrels of petroleum per day.5

Before the peak in oil prices, as demand for energy 

increased, more exploratory and development wells were 

drilled.6 In 2008, 355 million feet were drilled, nearly 

twice as many feet as were drilled during 2001 and 46 

million more feet than in 2007.7 Drilling activity led to 

increased demand for support activities. An employment 

peak in support activities for mining occurred 10 months 

into the recession. Employment in support activities for 

mining accounted for 67 percent of job gains in mining 

from the start of the recession to the September 2008 

peak in total mining employment and in production in 

the industry of drilling of oil and gas wells.8 Oil and gas 

extraction contributed 23 percent of job gains in mining 

during this period. Employment in oil and gas extraction 

reached a high 3 months later than employment in support 

activities. As nonenergy industrial production lessened, 

demand for energy resources, and thus employment in 

mining, fell with it.

From September 2008 through June 2009, mining 

employment fell by 92,000. Support activities for mining 

accounted for 74 percent of total employment losses in 

mining. Oil and gas extraction accounted for 4 percent of 

employment losses in the sector during the same period. 

Oil and gas employment by State

Four States—Texas, Louisiana, Alaska, and California—

accounted for more than three-fourths of oil production 

in the United States in 2008, a peak year for production. 

Furthermore, these States accounted for over half of all 

jobs related to oil and gas extraction and support activities 

for mining at that time. (See table 2.) Of the States that 

produce natural gas, Louisiana and Texas produced about 

 Table 1. Employment in mining during the 2007–09 recession, seasonally adjusted

[in thousands]

Industry Dec. 2007 Sept. 2008 June 2009 Change, Dec. 

2007–Sept. 2008

Change, Sept. 

2008–June 2009

Change, Dec. 

2007–June 2009

Total nonfarm..................................... 137,983 136,313 130,493 -1670 -5820 -7490

Mining.................................................................... 681 728 637 48 -92 -44

Oil and gas extraction.................................. 154 164 160 11 -4 7

Mining, except oil and gas......................... 223 228 208 5 -20 -15

Coal mining................................................ 77 84 81 7 -2 4

Metal ore mining...................................... 39 41 34 2 -6 -4

Nonmetallic mineral mining................ 107 103 92 -4 -11 -15

Support activities for mining.................... 305 336 269 32 -68 -36

Support activities for oil and gas........ 202 227 193 25 -34 -9

SOURCE: Bureau of Labor Statistics, Current Employment Statistics survey.

Table 2. Production of natural gas and oil, and employment in oil and gas extraction and support activities for mining, 

 for selected States and the U.S. as a whole, 2008

State

Natural gas, annual production Oil, annual production Employment, Sept. 2008 

(not seasonally adjusted)

Cubic feet, in 

millions

Percent of U.S. 

total

Barrels, in 

thousands

Percent of U.S. 

total

Thousands of 

jobs

Percent of U.S. 

total

Alaska............................................ 398,442 1.9 249,874 13.8 13 3

Texas.............................................. 7,403,720 34.9 447,076 24.7 220 44

California...................................... 296,469 1.4 238,691 13.2 21 4

Louisiana....................................... 3,082,492 14.5 445,606 24.6 51 10

Colorado....................................... 1,389,399 6.5 24,054 1.3 12 5

New Mexico................................. 1,446,204 6.8 59,403 3.3 117 3

Oklahoma..................................... 1,913,029 9.0 64,065 3.5 151 10

Wyoming...................................... 2,274,850 10.7 52,943 2.9 20 4

United States............................... 21,239,516 100.0 1,811,819 100.0 503 100

1 Datum is from the BLS Quarterly Census of Employment and Wages.

SOURCE: Unless otherwise noted, employment data are from the BLS CES survey. Production data are from the U.S. Energy Information Administration.
Monthly Labor Review • April 2011 21

half of all output in 2008, and only four other States produced more than one trillion cubic feet of natural gas—

Colorado, New Mexico, Oklahoma, and Wyoming. 

Louisiana held only a 10.1-percent share of oil-andgas-related employment but produced nearly as much 

oil as Texas, which employed nearly half of all workers 

in these industries. This paradox stems from the fact that 

a substantial share of offshore oil production takes place 

in Louisiana waters but that a majority of the workers in 

those waters are employed by firms located in Texas. 

After September 2008, the boom in oil and gas employment ended. Nearly half of the 84,000 jobs lost during the 

remainder of the recession were in Texas; most of the rest 

of these losses occurred in the other major oil-and-gasproducing States. (See table 3.) 

Other mining resources

Coal mining saw substantial job growth before the peak 

in energy prices. The energy market played a role in bolstering coal mining employment because high oil prices 

created a substitution effect9 in some markets by which 

coal was purchased in lieu of oil. For instance, China 

started to demand more coal over oil in order to increase 

the production of electricity.10 The number of U.S. carloads of coal—that is, the amount of coal traveling on 

domestic rail—spiked one month after the 2008 peak of 

West Texas Intermediate oil prices.11 From January 2008 

until well after the recession ended, employment in coal 

mining declined; however, the number of carloads of coal 

began to rise in June 2009 as the recession ended.

Metal ore mining has a relatively small workforce, but it 

did see employment rise with a boom in commodity prices that started in 2003 and lasted until around June 2008. 

After that point, both nonferrous metals prices and metal 

ore mining employment began to decline. (See chart 1.) 

This employment trend was similar to the trends that occurred during and after the recessions of the 1960s, 1970s, 

and 1980s. During all of those periods, the employment 

peak in metal ore mining lagged the onset of the recession, and the industry group continued to shed jobs for 

some time after the end of each economic contraction.12

Price change proves to be the dominant force in determining employment trends within metal ore mining. 

Nonmetallic mineral mining relies mostly on the construction industry to utilize its products, which include 

sand, stone, and clay. During the 2007–09 recession, employment in nonmetallic mineral mining declined by 14 

percent. In fact, employment had begun to decline before 

the start of the recession, reflecting a reduction in public infrastructure spending and the sharp decline in residential construction in the United States.13 From 2007 to 

2008, production of sand and gravel for construction and 

that of crushed stone, both for consumption, each fell by 

roughly 200 million metric tons,14 bringing the production of each of the commodities to its lowest level since 

1997. 

Stepping back

The rise and fall of oil prices in 2008 is similar to the price 

shock that occurred during the early-to-mid 1970s. The 

difference is that oil prices in the early-to-mid 1970s rose 

sharply as a result of an OPEC embargo that constrained 

the world supply of oil, whereas in 2008, worldwide demand for oil outpaced the growth in supply. Both shocks 

resulted in rapid increases of employment in the mining 

industry. However, employment in mining continued to 

grow through the 1973–75 recession until peaking in October 1981. (See chart 2.)

 

Table 3. Employment in mining and logging in selected States during the 2007–09 recession, seasonally adjusted

[in thousands]

State Dec. 2007 Sept. 2008 June 2009 Change, Dec. 2007–

Sept. 2008

Change, Sept. 2008–

June 2009

Change, Dec. 2007–

June 2009

Alaska............................ 15 16 15 1 0 1

California...................... 28 29 26 1 -3 -2

Colorado...................... 26 29 24 3 -6 -3

Louisiana....................... 53 55 51 2 -4 -2

New Mexico................ 20 22 17 2 -5 -2

Oklahoma.................... 49 53 43 4 -11 -6

Texas.............................. 216 236 198 20 -38 -18

Wyoming...................... 28 30 25 3 -5 -3

SOURCE: Bureau of Labor Statistics, Current Employment Statistics survey.
The 2007–09 Recession: Mining

22 Monthly Labor Review • April 2011

Chart 1. Metal ore mining employment and the PPI of nonferrous metals, monthly data, seasonally adjusted,

 January 1967–December 2010

300

250

200

150

100

50

0

150

125

100

75

50

25

0

Employment

(in thousands)

PPI 

(1982 = 100)

NOTE: Shaded areas represent recessions as determined by the National Bureau of Economic Research. The PPI is seasonally 

adjusted except for the 1990–2003 period, when seasonal adjustment was not applicable. There is a break in the metal ore mining 

employment series because of the transition from the Standard Industrial Classification system to the North American Industry 

Classification System.

SOURCE: Bureau of Labor Statistics. 

 1967 1972 1977 1982 1987 1992 1997 2002 2007 2010

Metal ore mining 

employment

PPI, nonferrous metals

 Chart 2. Mining employment (seasonally adjusted) and the real spot price for West Texas Intermediate crude oil, 

 January 1958–December 2009

Price

(real 1983–84 dollars)

Employment 

(in thousands)

NOTE: Shaded areas represent recessions as determined by the National Bureau of Economic Research. 

SOURCES: Bureau of Labor Statistics and Dow Jones & Company.

Mining 

employment

Oil spot price

80

70

60

50

40

30

20

10

0

1,200

1,100

1,000

900

800

700

600

500

400

1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
Monthly Labor Review • April 2011 23

During the 1990–91, 2001, and 2007–09 recessions, the 

trend in mining employment lagged that of total nonfarm 

employment. Although there was a moderate oil shock in 

the 1990–91 recession, the oil price peak in October 1990 

did not coincide with the beginning of the decrease in mining employment as the oil price peak in 2008 did.

The timing of swings in oil prices during the 1990–91 recession was similar to that during the 2007–09 recession, although the swings differed in amplitude. The decline in mining employment during the 1990s was not solely a result of a 

decrease in mining activity, but also of a shift towards greater 

productivity. Following the most recent recession, mining 

companies have made efforts to increase productivity.15

Historically, the mining industry has faced diminishing 

returns to production as the least costly sources of output 

are exhausted. Consequently, mining producers increasingly 

have relied upon sustained and significant price increases as 

signals for justifying increased investment through added 

employment. As this article has shown, mining employment 

grew even during the first half of the 2007–09 recession in 

response to notably higher prices and then fell when energy 

prices decreased substantially.

Notes

1 In this article, the term “mining industry” is used to denote the 

industry known as the “mining division” under the Standard Industrial 

Classification (SIC) system or the “mining, quarrying, and oil and gas 

extraction sector” in the North American Industry Classification System (NAICS). 

2 Recessions are identified by the National Bureau of Economic 

Research (NBER). According to the NBER, the most recent recession 

began in December 2007 and ended in June 2009. The previous two 

recessions were from March 2001 to November 2001 and from July 

1990 to March 1991. For a complete list of business cycle dates, consult 

the NBER webpage at http://www.nber.org/cycles/cyclesmain.html 

(visited Nov. 2, 2010). The data on employment used in this article 

are from the Current Employment Statistics (CES) survey, which is 

a monthly survey of approximately 140,000 nonfarm businesses and 

government agencies representing approximately 440,000 individual 

worksites. For more information on the CES program’s methods, see 

“Technical Notes to Establishment Survey Data Published in Employment and Earnings” at http://www.bls.gov/web/cestn2.htm (visited Apr. 13, 2011). CES data are available at http://www.bls.gov/ces

(visited Apr. 13, 2011). The CES data used in this article are seasonally 

adjusted unless otherwise noted.

3 International Energy Statistics (U.S. Energy Information Administration), http://tonto.eia.doe.gov/cfapps/ipdbproject/iedindex3.cf

m?tid=5&pid=5&aid=2&cid=ww,CH,IN,&syid=2006&eyid=2007

&unit=TBPD (visited Apr. 13, 2011).

4 James D. Hamilton, Causes and Consequences of the Oil Shock of 

2007–08,(Cambridge, Mass., National Bureau of Economic Research, 

NBER working paper series, no. 15002, May 2009); and Yanan He, 

Shouyang Wang, and Kin Keung Lai, “Global economic activity and 

crude oil prices: A cointegration analysis,” Energy Economics, July 2010, 

pp. 868–76.

5 International Energy Statistics.

6 Guro Bornes Ringuld, Knut Einar Rosendahl, and Terje Skjerpen, 

“Does oilrig activity react to oil price changes? An empirical investigation,” Energy Economics, March 2008, pp. 371–96.

7 Table 4.5, “Crude Oil and Natural Gas Exploratory and Development Wells, Selected Years, 1949–2009,” Annual Energy Review, 2009

(U.S. Energy Information Administration), http://www.eia.doe.gov/

aer/pdf/pages/sec4_11.pdf (visited Apr. 14, 2011).

8 See G. 17, Industrial Production and Capacity Utilization (Federal Reserve Board, Federal Reserve Statistical Release), http://www.

federalreserve.gov/datadownload/Download.aspx?rel=G17&ser

ies=b194d5644bbe8dee772666612041a553&filetype=spreadshee

tml&label=include&layout=seriescolumn&from=01/01/2000&

to=11/30/2010 (visited Apr. 14, 2011).

9 Robert Halvorsen, “Energy Substitution in U.S. Manufacturing,” 

The Review of Economics and Statistics, November 1977, pp. 381–88. 

10 Andy Xie, “Asian Oil Demand Declining,” Global Economic Forum, July 14, 2005, http://www.morganstanley.com/views/gef/

archive/2005/20050714-Thu.html#anchor2 (visited Apr. 15, 2011).

11 The relevant data come from the data extract titled “Rail Time 

Indicators 2006–2010” from the Weekly Railroad Traffic Report of the 

Association of American Railroads (Washington, DC, 2010). 

12 Historical data for metal ore mining are based on two industry 

classification structures. Employment data from before 1990 are based 

on the Standard Industrial Classification (SIC) system, and later data 

are based on the North American Industry Classification System 

(NAICS). As of the first quarter 2001, employment in the SIC-based 

series accounted for 93.1 percent of employment in the NAICS-based 

series. Given this high level of overlap, a comparison can be made.

13 Adam Hadi, “Construction employment peaks before the recession and falls sharply during it,” Monthly Labor Review, this issue, pp. 

24–27.

14 Thomas D. Kelly and Grecia R. Matos, “Historical Statistics 

for Mineral and Material Commodities in the United States” (U.S. 

Geological Survey, data series 140, 2010), http://minerals.usgs.gov/

ds/2005/140/ (visited Apr. 15, 2011); see the documents for “stone 

(crushed)” and “sand and gravel (construction).”

15 Russell Andersson, Sudhir Chawla, and Zafar Khan, “Effects of 

Cutbacks in the United States Oil and Gas Industry on Employee 

Attitudes: An Empirical Study,” International Journal of Management, 

December 2009, pp. 400–10.