When people think of Houston, they think oil. The “Energy Capital of the World,” is second only to New York City when it comes to the number of Fortune 500 companies headquartered there, with the majority of them involved in the oil and gas industry.
Historically, most people would be correct–in 1980, 80 percent of the jobs in Houston were oil and gas related in some way. But historical dependence on that singular industry is changing, according to president and CEO of Rockspring Capital, Jim McAllister IV. And with oil prices at their lowest in six years, that’s a good thing for the city.
“There’s a lot of headline news about people thinking there’s going to be a problem, when there’s really nothing on the horizon,” McAllister says.
“There’s a really interesting study called Metrostudy, that took a look at the price of oil and how it effects the real-estate market in Houston and they determined the sweet-spot for price of oil for the real-estate market is between $55 and $95 a barrel,” McAllister says.
Less than half of the jobs in Houston now are oil related. McAllister says that in part due to what former Gov. Rick Perry termed “The Texas Miracle.”
“What’s been happening over the past 15 years or so in Texas has been really unbelievable,” McAllister says.
“Thirty-one percent of all private sector jobs in the United States have happened Texas between 2000 and now. Almost one-third of the jobs in the United States have been in Texas. Energy is one of the reasons, because the shale has been so strong, but there are so many other reasons as well why Texas has just been destroying the competition for jobs.”
While the current price of a barrel of crude is floating around $50, outside the so-called “sweet-spot,” McAllister among others believes that’s due to rise.
“There’s almost no case for it to be staying there at any great length of time. January futures for oil is at $60 a barrel. I expect we’re going to be back in that sweet spot somewhere between six and 18 months from now.”
But commentator Michelle Garcia of the Texas Observer says Texan women have largely missed out on the “Texas Miracle.”
“Buried under the ‘Texas Miracle,’ are the multitude that toil at or slightly above the federal minimum wage of $7.25 an hour, making Texas a national leader in low-paid work,” Garcia says.
“Women account for 55 percent and 65 percent of minimum wage earners.”
According to an analysis from Oxfam America, south Texas has one of the highest concentrations of low wage workers in the US. Garcia says that raising the minimum wage in Texas to $10.10 would largely benefit women over 130,000 workers in south Texas.
“Raising the minimum wage to $10.10 an hour would mean a shot in the wallet for an estimate 1.95 million working Texans,” Garcia says.
“In south Texas, many women rely on subsidized health clinics for care. That region was also the hardest hit by state cuts to women’s health programs.”