Are Low Oil Prices Good for Texas? This Economist Thinks So
From Texas Standard:
Every January for the past three decades, state and local officials have gathered in Austin to hear economist Angelos Angelou give his annual economic forecast. Some say he's conservative in his forecasts, yet lawmakers follow his words carefully because he's been proven to be on the money in the past.
While there's been widespread concern about plummeting oil prices, Angelou says the year ahead doesn't necessarily look grim despite slower growth. In fact, he argues that lower oil prices may prove to be good for the economy.
"Let me set the record straight: lower oil prices are good for the state of Texas," Angelou says. "Higher oil prices tend to benefit specific regions of Texas, as well as the U.S., and certain parts of the world. But lower prices put a lot more money into people's pockets."
By his estimates, the prices gives consumers $23 billion annually, just in the state. Meanwhile, the slump has caused layoffs in the energy sector costing $9 to $10 billion, Angelou says.
"Some of them will find work elsewhere," he says. "A lot of them will have to retrain and get into other industries. So with a low unemployment rate in Texas, I don't necessarily see that as a huge problem."
Angelou says the future of the Texas is "bright" for 2016 because of the many different industries that make up the state's economy.
"We are far more diversified than the media portrays," Angelou says. "It's not all about the oil and gas industry. We have ports. We have finance and technology. We have the medical centers in Houston and other places. So it's not just the one single sector economy like Saudi Arabia, or Russia, for that matter."