I was idly playing around in FRED last night looking for some figures that might turn into a post someday when I ran into this:
This strikes me as something of a mystery. Starting around 1998, gas station employees began to plunge even as sales continued to rise.¹ This was before the 2000 recession, which doesn't seem to have played a role. And the numbers continued to decline pretty steadily through 2010, unaffected by either the Great Housing Bubble or the Great Housing Bust. Then in 2010, as sales dropped and then stayed roughly flat for years, the number of employees suddenly started to rise and are now near their peak.
(I cut this off before the pandemic, which has slashed employment everywhere.)
What's the explanation here? It seems to be mostly independent of both recessions and housing bubbles. Why the big drop from 1998-2010? And why the sudden turnaround after that? Even if the answer is that employment at gas stations is all about food and drink these days, not gasoline, I'm still puzzled. What's going on?
¹Sales are in units of 10,000 gallons in order to fit them on the chart.
I imagine the decline is due to some combination of the decline of filling station attendants (outside of NJ) and the rise of card point-of-sale machines attached to the pumps so you can pay for your gas without human intervention.
According to wikipedia, "pay at the pump" was introduced in the States by '86, had 13% penetration by '94, up to 80% in 2002, so that fits pretty well. Imagine the tight labor market of the 90's also decreased employment at filling stations, simply because it would raise wages in what I understand is a sector with a very thin profit margin.
Oregon also makes it illegal to pump your own gas.
Mostly, but not comprehensively illegal: https://bityl.co/6Ih2
In eastern Oregon, new law allow non-retail stations to sell gas to consumers, which by default means that they can pump their own gas.
In a handful of coastal Oregon counties, you can pump your own gas at retail stations between 6pm and 6am.
The Beaver State lacks the sheer number of Italians who would rather pump their fists than pump their gas. Thus, the scattershot requirement for full service.
Oregon erasure.
I also wouldn’t be surprised if the number of actual gasoline selling retail outlets has declined in the United States, perhaps precipitously, in correlation with the rise of large retailers getting into the gasoline selling business. If the market share of inefficient mom and pops has declined relative to that of large (and labor efficient) behemoths like Walmart, we’d expect to see a corresponding decline in gas station employment.
Kevin
You are forgetting that gasoline stations are very rare
Convenience stores that sell gasoline are more prevalent, and with the advent of 7/24 convenience stores along with many that require 2 employees at a time on the overnight shift
Then there's also the Lottery sales which have taken off since 2010. I have seen times when the lottery grand prize is over $100M where the local C-Stores put clerks on just for lottery sales.
More C-Stores - More operating hours - selling lottery tickets all contribute to this phenomena
Exactly. Or to put it differently
"Even if the answer is that employment at gas stations is all about food and drink these days, not gasoline, I'm still puzzled."
Even if? Seriously, Kevin, are you not aware that that is where all the money is? I thought this was just common knowledge.
https://www.npr.org/templates/story/story.php?storyId=10733468
This is the rise of self-serve computerized pumps. Even though there was some self-service before that, the rise of the modern gas station, with a tiny booth surrounded by a dozen pumps, didn’t start until you could pay at the pump. And those systems started being common in the mid-late 90s tech boom, as did so much else that we didn’t notice.
And now the station with the tiny island has become rare, as there's usually a convenience store with several employees next to the station. Often an entire rest area is devoted to this combined purpose. There are far more Travel Centers and truck stops than there used to be.
Employees looks to be a mirror of oil prices, which bottomed in 1998, peaked in 2008 and then declined to 2020 lows. Employees showed a low in 2010, but 2008-2009 oil was volatile, and post 2009 (after prices have stabilized somewhat) there's a peak in 2010.
So: 1998-2008, more sales are good, but not enough to offset the rise in oil prices and employees are let go. 2008-2010 employee drop was due to sales dropping from great recession. Post 2014, oil dropped dramatically, which accounts for increasing sales and the need for more employees.
My story doesn't work for 2010-2014 period unfortunately, but that's all I got.
Here's the link for oil prices:
https://www.macrotrends.net/1369/crude-oil-price-history-chart
that's the correlation I would have wanted to look at, price of gas vs employment. The higher the price of oil, the more margin there's in the business.
I think sales-to-employee ratio shift likely has to do with sales composition. The sales number here is in gallons, but if it was in dollars, there would be a substantial decline because of the 2014 oil price crash and subsequent lower prices, followed by a modest recovery - see here: https://fred.stlouisfed.org/graph/fredgraph.png?g=CWST
Looking at that chart, 2010 sales look similar to 2019 sales, but 2010 oil prices were something like 30% higher than 2019 prices. That seems like non-fuel sales comprise a larger percentage of revenue in 2019 than they did in 2010. Non-fuels revenue likely comes from not just convenience store sales, but also things like prepared food that are more service/people intensive.
I can't be sure without disaggregating revenue by source, but looking at sales figures over the decade, an almost 60% decline in oil prices from 2013 to 2016 led to a 20% decline in US gas station sales, indicating that fuel sales are likely less than half of revenues (roughly). I would not be surprised that fuel sales as a percent of revenue has been declining since at least 2010, but that commodity price fluctuations make it hard to see a clear trend.
“Even if the answer is that employment at gas stations is all about food and drink these days, not gasoline, I'm still puzzled.”
It’s not just food and drink. Many gas stations around my area have essentially become restaurants specializing in sandwiches (Wawa), fried chicken (Royal Farms) and the like. (Not talking about the gas stations that have separately branded food counters inside them, like Subway or McDonalds.) Places where people who live or work around them actually go visit to spend their whole lunch or dinner break there. With that expansion, they’ve had to add lots more staff to comply with health codes and make “quality” food.
Yup. The number of food & sevice staff at "gas stations" has increased, while the number of actual gasoline attendents (even if it's just one person inside the store) has decreased. That's pretty much what is happening.
Fully agree with this point.
As one empirical point, Sheetz, which seems to be the fastest growing gas chain in these parts, opened there first commissary to supply stations with food products in 2008. That model has proven very successful for them, and times up roughly with the bottoming out and subsequent rise of employment.
I also wonder how gas stations at grocery chains or places like Sam's club get factored in to this? How much of their employment counts as gas station employment?
Austin-
My late son in law (RIP) actually worked for a company that found small food service companies to occupy a space inside a C-store or larger box retailer. It is a multi million dollar industry because you have to find the right fit for the space and the landlord company can be very ornery.
Think Subway franchise inside a WalMart for instance. Different hours etc but WalMart wants those food outlets open !!! Another one that is popular in the SE is having a Starbucks inside a grocer like Harris Teeter (we have 2 locations like that within 12 miles of my house)
It may be popular with the customers but poses all sorts of problems for the landlord and tenant
Given that pay at the pump penetration was 80% in 2002 (see simplicio's post above,) I would expect a near random correlation between number of employees and gallons of gasoline sold.
The money (and labor) in C-stores is not in the gasoline, but in all the crap inside.
So they say. Grocery stores have always complained that they only make $0.01 on a gallon of milk...but they turn that gallon over 365 times in a year. So is the margin 0.25% or 149% ?
As others have talked about, I suspect that the increase in the last decade is that there are a lot of things now called gas stations that didn't used to exist or have been greatly expanded. Costco type places with gas and other types of "Gas Stations" that count as more gas stations employees.
Are the employment figures “full-time equivalent” or just total regardless of hours?
I'd like to see the number of employees corrected for population growth. It would tell me if it's just keeping up with population vs gain/losing ground.
Lots of small, old gas stations disappeared toward the end of the last millennium as a result of EPA's LUST program (regulations to eliminate Leaking Underground Storage Tanks). I worked on the economic impact assessment of those regulations -- we were astonished that our analyses showed a massive decline in the number of small businesses, and yet there wasn't that much push-back: the old, steel tanks really were rusting and leaking gasoline into the ground (and, often, groundwater). We expected bigger, newer, cleaner stations to take over -- and that's probably what happened. Cars that need less maintenance (longer oil & tire life, struts replacing shocks, electronic fuel injection replacing carburetors, etc.) probably reduced the need for mechanics at service stations, too. Why employment is rising again isn't as clear to me -- more convenience stores is probably an important part of the answer, but if it's really a restaurant that also sells gas, wouldn't the employees be counted in a different industry?
I'm just here to be another person to tell you about automated pay at the pump machines, which I use every time I buy gas, congrats on learning something new I guess.
Others have said this other ways, but put simply you are actually charting the revenue contribution of gasoline sales compared to other products sold at gas stations over the last few decades.
Kevin-
The NAICS codes are assigned by the PRIMARY source of revenue for that particular business. (This used to be the old SIC Standard Industrial Classification codes)
So a Walmart w/gas pumps would be general retail even though they may have multiple gas station employees
I see a decadal oscillation. This has to be El Nino's fault.
http://www.cleanmpg.com/community/index.php?threads/46994/
Fuel economy.
The number of employees per car drops with automation and the number of car visits to sell a given amount of gas also drops through about 2005 as fuel economy gets worse. After 2005, saturation of automation and rising fuel economy means more cars per employee to sell the same amount of gas.
I'll chime in with the convenience store employment others have mentioned. In addition, I believe the big chains made it difficult for franchise owners to continue running vehicle repair shops as part of their gas stations b/c the mechanics kept a greater share of the income (e.g. billing for skilled labor hours) than the chains would keep of the food/drinks/etc if the places pivoted to convenience stores. Guessing the original drop in employment was among full-time mechanics and the increase was in hourly retail workers.