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I'm working on a project for my Professor at UW on the effects of Boom and Bust cycles on normal people. Would appreciate any responses from people personally affected by these cycles as well as thoughts and insights from the others, living in or lived in Wyoming.
Thoughts on how Boom and/or Bust affects:-
1) The economy and jobs
2) Community issues like increase in crime, drug-use
3) Infrastructure
4) Workers leaving Wyoming
5) Family life
I'm working on a project for my Professor at UW on the effects of Boom and Bust cycles on normal people. Would appreciate any responses from people personally affected by these cycles as well as thoughts and insights from the others, living in or lived in Wyoming.
Thoughts on how Boom and/or Bust affects:-
1) The economy and jobs
2) Community issues like increase in crime, drug-use
3) Infrastructure
4) Workers leaving Wyoming
5) Family life
Thanks in advance.
To boom and bust is devastating on the economy and on jobs. One would think that a boom is good. It's not and here's why.
When a area booms, it brings in a bunch of high paying jobs. But these jobs are to dig wells, set up rigs, put in pipeline, build the coal silo and crushers or whatever. Once those are built, it only take 1/4th of the people to maintain it once it is running. So the other 3/4's move on to greener pastures. Sound good? How about this.
Methane came into a town. Created over 400 jobs paying pretty darn good. Oh oh. Schools had to gear up for some 600 more kids. Schools were built onto, funding had to be obtained from Cheyenne, planning, bids and such all had to be set up. They hired some 30 teachers and a dozen administrators. Couldn't plan on it because over 900 people (men, women, and children) moved into town in a matter of 30 days.
The grocery store all of a sudden couldn't meet demand. They expanded and set up a 5 year lease on a warehouse. They completely remodeled so they could handle the volume. They put on a night manager and about 10 more people to help because they were pretty fast paced.
Wow, housing is short. Where do you put 1000 people. Motels are jambed, people are scrambling to make trailer space, running new sewer, water lines, electicity. The utility department has to put on extra people, MDU has to add people. Course all of this takes more equipment. Expensive equipment. Trucks with tools and such. People put out good money to put up affordable housing.
But with this demand, the prices sky rocket. They hit the ceiling. Lots that were for sale 6 months ago for $30,000. Are now over $90,000. That's ok, these people following the boom don't care, they're making big bucks and can afford it.
Now let's look at the down side. Prices went up due to demand. Houses went up, due to demand. Food, gas, supplies of all sorts, went up due to demand. But what didn't go up is the wages being paid to the local folks that were here all along. They don't quit and take on a boom job because they know it'll end and they'll be stuck without a job. So they stay in the job that used to be plenty to make them secure and comfortable. Only now, they are no longer secure, and they are becoming uncomfortable.
The bust occurs. The school has too many staff. Let's lay some off. Mrs XXX and her husband uprooted and moved here. It looked solid, so they bought a house. They're now upside down on the house because there's 300 other houses in town that are for sale. The grocery store has too many people and they still have 3 years left on the lease of the warehouse they no longer need.
But you see. Everything went up in price. Vendors got used to that. They won't lower it. They know they can get it because, hell, what else can people do. So the prices went up, they'll stay, but wages didn't go up.
What kind of life did my family have before the boom, what kind of life do they have now? Prices went up over 40% for supplies, wages didn't. The house we was looking at in the country for $126,000. It's on the market for $560,000. now.
All your savings is used up. Wages are just making the bills. That 6 year old car should be replaced but can't afford a car payment. House needs paint and if we scrimp real tight, we'll be able to paint it in a year or two. Daughters getting married next year. Wonder what kind of wedding I can afford for her.
Yup, put in 30 years for a job, make your way up the ladder. Buy a house and make payments for 30 years. Finally free and clear. The old truck is payed off so nothing is owed. And the damn boom and bust has made it so a person can't afford to survive even with everything paid off.
To boom and bust is devastating on the economy and on jobs. One would think that a boom is good. It's not and here's why.
When a area booms, it brings in a bunch of high paying jobs. But these jobs are to dig wells, set up rigs, put in pipeline, build the coal silo and crushers or whatever. Once those are built, it only take 1/4th of the people to maintain it once it is running. So the other 3/4's move on to greener pastures. Sound good? How about this.
Methane came into a town. Created over 400 jobs paying pretty darn good. Oh oh. Schools had to gear up for some 600 more kids. Schools were built onto, funding had to be obtained from Cheyenne, planning, bids and such all had to be set up. They hired some 30 teachers and a dozen administrators. Couldn't plan on it because over 900 people (men, women, and children) moved into town in a matter of 30 days.
The grocery store all of a sudden couldn't meet demand. They expanded and set up a 5 year lease on a warehouse. They completely remodeled so they could handle the volume. They put on a night manager and about 10 more people to help because they were pretty fast paced.
Wow, housing is short. Where do you put 1000 people. Motels are jambed, people are scrambling to make trailer space, running new sewer, water lines, electicity. The utility department has to put on extra people, MDU has to add people. Course all of this takes more equipment. Expensive equipment. Trucks with tools and such. People put out good money to put up affordable housing.
But with this demand, the prices sky rocket. They hit the ceiling. Lots that were for sale 6 months ago for $30,000. Are now over $90,000. That's ok, these people following the boom don't care, they're making big bucks and can afford it.
Now let's look at the down side. Prices went up due to demand. Houses went up, due to demand. Food, gas, supplies of all sorts, went up due to demand. But what didn't go up is the wages being paid to the local folks that were here all along. They don't quit and take on a boom job because they know it'll end and they'll be stuck without a job. So they stay in the job that used to be plenty to make them secure and comfortable. Only now, they are no longer secure, and they are becoming uncomfortable.
The bust occurs. The school has too many staff. Let's lay some off. Mrs XXX and her husband uprooted and moved here. It looked solid, so they bought a house. They're now upside down on the house because there's 300 other houses in town that are for sale. The grocery store has too many people and they still have 3 years left on the lease of the warehouse they no longer need.
But you see. Everything went up in price. Vendors got used to that. They won't lower it. They know they can get it because, hell, what else can people do. So the prices went up, they'll stay, but wages didn't go up.
What kind of life did my family have before the boom, what kind of life do they have now? Prices went up over 40% for supplies, wages didn't. The house we was looking at in the country for $126,000. It's on the market for $560,000. now.
All your savings is used up. Wages are just making the bills. That 6 year old car should be replaced but can't afford a car payment. House needs paint and if we scrimp real tight, we'll be able to paint it in a year or two. Daughters getting married next year. Wonder what kind of wedding I can afford for her.
Yup, put in 30 years for a job, make your way up the ladder. Buy a house and make payments for 30 years. Finally free and clear. The old truck is payed off so nothing is owed. And the damn boom and bust has made it so a person can't afford to survive even with everything paid off.
It's not just in the "energy patch" and not just in Wyoming. It's happening in the "recreation" and second-home areas, too. Big money coming in from outside, driving up prices, and destroying the local quality of life. People from California, Texas, etc. can't figure out why they are often so resented when they move into the Rocky Mountain West. Getting priced out of the place you lived all of your life will tend to make long-term residents pretty bitter when they see the affluent "newbies" taking over the place.
True, so very true. I was talking about a boom in general. You can substitute the word Methane with "Land, oil, gas, natural gas, housing, coal" or whatever. I just used Methane as an example for him/her to use on his/her term paper.
Last edited by ElkHunter; 10-06-2007 at 05:32 PM..
It's not just in the "energy patch" and not just in Wyoming. It's happening in the "recreation" and second-home areas, too. Big money coming in from outside, driving up prices, and destroying the local quality of life. People from California, Texas, etc. can't figure out why they are often so resented when they move into the Rocky Mountain West. Getting priced out of the place you lived all of your life will tend to make long-term residents pretty bitter when they see the affluent "newbies" taking over the place.
If you had the opportunity to take a better job and give your children a better quality of life and upbringing, you wouldn't do it based on how your presence there would contribute to the negative effect on the local economy? If you absolutely feel like resenting someone, resent "the man". Big oil, for example, is going to go wherever they want to produce natural resources - there's almost no fighting it. But to hold it against the little guy and give him a hard time for being here...well that hardly seems right. Most of the people working in methane out here are not the one's making the big bucks anyway. I sure as heck can't afford those $90,000 lots that were mentioned.
saviomac123, I grew up in Denver, my dad did well in his own business and retired in Jackson Wyo. After some very shady people up there got done with him he was broke. Luckily the boom of the 1970's was on in Rock Springs. We moved there and started rebuilding our lives. This was during the infamous 60 Minutes "Sin City " times.
There were lots of jobs, Mom, Dad and my oldest brother could pick and choose jobs and eventually settled in at two of the big trona mines there. My younger brother and I were in high school and worked in local restaurants to help the family out. It seemed that everyone at school was from somewhere else and in simalar situations. Most folks had come to make thier lives better and if they could make it through a few winters they did well. My class was the first class to graduate out of the new Green River High school, we lived in a home that was built as part of a company owed neighborhood, as employees we got a good deal on a home. When the boom was over the folks who work construction type jobs moved on to the next project , those who could not handle the Wyoming winters had moved on. The community started to settle down. Or did it ? Seems like the newspapers would be a good reflection on those times, My family generally stayed out of trouble and did well. The boom and following bust helped us regain most of what was stolen from us. I lead a fairly sheltered life and as I got older I came to realize that there was all sorts of drug and alchohol related problems all around me. Lots of unhappy/unlucky people coming and going. I guess we were some of the lucky ones.
When I left Wyoming , after 27 years, I sold my $80,000 home for $125,000 and three years latter , when the next boom hit it sold for $225,000. ( I should have held on a few more years ! )
jgussler covered the topic pretty well, I just thought I would add my 2 cents.
Some of the areas are more mature in their boom than the others are. We ended up in Gillette instead of Rock Springs, and I was not disappointed about it. Gillette's coal boom matured a long time ago, and the methane and oil are very small in comparison to the operations that places like Arch and Foundation are running.
The coal seam up here has been explored completely, and with today's current expansion and technology the mines here generally have a life cycle of 200-300 years. That's not even compensating for the new technology that's inevitable every so-many years. Once we're through 10% of that seam's life from this point on we will find that new technology will enable the extraction of deeper coal.
Gillette has already had a few serious boom and bust situations, and the infrastructure is already in place. The issues that jgussler was describing with the new construction are already passed for the most part. There is expansion, but the current coal operations have nearly all of the seam tied up with ownership/leases, so the construction of new mines is very unlikely. Since this is the main economic force in the area the boom situation is not nearly as tedious as in a place like Rock Springs.
The local government has also learned from some of the past booms, and the expansion of the town has been severely limited in comparison to past times.
Really, I guess I'm trying to say that not all of the energy money is bad..... I would seriously avoid places like Rock Springs as, like jgussler mentioned, the new construction and development can have serious effects on the economy. Places like Gillette, Casper, and Cheyenne seem to be more established in these areas, and their economy isn't so dependent on things that aren't built yet.
I'm here in Gillette for the next 10 years or so to stash some $$ away, and then I'm moving to the Sheridan/Buffalo area or back over to Cody. Kind of a trees and water guy, so Gillette really isn't the place for me in the long run. It was, however, a good way for us to get back into the state. I should have never moved back to CA.... that place is a nut house.
What you say is hitting the nail on the head for Gillette area..... Now.
I was in Gillette during the first boom. There was one coal mine in town and it wasn't much. Had less then 50 people working there. Wyodak. We put in Interstate 90 and I watched Gillette go from 2,000 people to 7,000 people for two reasons. Oil and Coal. Oil was just booming and although the coal streak was there, they weren't opening it up, it wasn't needed yet. Then the Fed Gov come along and said, "We want 40% more production by the end of the year." Oh crap. Here's comes the boom again.
Gillette has been hit with boom after boom and the town has grown because of it and has really been lucky in that the booms are hitting one right after the other. But a lot of towns, there's a boom, 3 or 4 years of nothing, then a boom, 3 or 4 years of nothing. You can see how that hurts.
By the way, that coal streak? Gillettes only opened a very small portion of it. It actually runs from Elmo/Hanna area, straight north to almo Forsyth Montana.
well lak i'm not convinced gillette is as stable as you are or is much different then rocksprings.rocksprings boom and bust cycles date back to the 'eighteen' seventies.theyve had even more time to adjust.my cousins been living in gillette since the early 80's and his wife since the '70's.when i lived there in the mid-late '90's oil had been bust for awhile and while those who already had coalmining jobs were still doing good they rarely hired any new miners.realestate prices were about half what theyd been in the 70's.there were some jobs for those with certain skilled trades,but there was no abundance of them many high school graduates moved to casper or beyond for work and even though housing was cheap it sold very slowly.there is a lot of construction in gillette right now but at some point enough houses will be built and there wont be a need for a bunch of constuction workers and they'll move on.the # of employees needed at the mines will stabilize,and they dont need a lot of people to maintain the gas wells once they are built.i think coal is more stable then gold so i think gillette's realestate will crash less then somewhere like elko,nevada which is currently overly dependent on gold prices,but at some point the boom around gillette will slow,employment growth will slow and realestate will start heading the other way again,how much is anybodys guess
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