What Texans really think about falling oil prices
Photo by Jerod Foster
Texans feel pretty good about the overall state of the economy, especially compared with the nation as a whole, but are nonetheless worried about jobs. Those are among the key findings of the inaugural Insight Texas effort, a partnership of Baselice & Associates, Influence Opinions and TXP that combines survey research, social media evaluation and economic analysis to take a snapshot of public opinion and combines that with Texas economic indicators to produce a quarterly analysis.
It’s been widely reported that Texas has added jobs at a remarkable rate over the last few years, and the employment data show statewide job growth last year of about 3.4 percent, the most rapid annual figure this century. Interestingly, over 40 percent of survey respondents said jobs were either “not so good” or “hard to get,” suggesting that the labor market could be weakening slightly.
As a whole, Texans overwhelmingly said local economic conditions are better than those of the U.S., with only 8.8 percent believing that the nation’s economy is in better shape than Texas’. Almost half of the survey respondents cited business conditions in Texas as “good,” a figure roughly matched by those who thought “jobs were plentiful.” This generally positive attitude toward the Texas economy comes through in traditional and social media as well.
The recent sharp decline in oil prices does worry Texans, who expect it to have negative consequences for the economy in general and state finances in particular. To determine Texans’ reactions to oil prices, Insight Texas asked a series of specific questions on the impact of oil. While slightly more than 50 percent of Texans see the fall in prices as bad for the state’s economy, more think it will help their individual business (44.3 percent) than hurt it (37.9 percent). This is also evident on social media, where the attitude toward declining oil prices is overwhelmingly more negative, while the drop in gas prices is largely seen as positive.
The explanation that fits this seeming contradiction, other than the fickleness of human opinion, is the concentration of industries and regions likely to be harmed, and the majority of the state that will actually benefit from paying less at the pump. Lower gas prices are leading to more disposable income being spent in the local economy. But when asked specifically about plans for the “extra money you have because of lower gasoline prices,” only 24 percent said they planned to spend it; the vast majority planned to either save it or pay down debt. While reduced debt loads and increased savings will pay economic dividends over time, in the short term that money will not be re-injected into the economy, reducing the positive impact on the local economy.
The Federal Reserve Bank of Dallas sees the impact of lower oil prices cutting what will still be overall positive state job growth by approximately 140,000 jobs during 2015. That figure includes both direct job losses in extraction-related sectors and the associated ripple effects of lost income. If the savings due to cheaper gas were entirely spent, that loss would be pretty much offset, as we estimate as much as $15 billion would be injected back into the economy. But the survey results suggest otherwise, meaning that the net effect of lower oil prices is likely to be the loss of at least 100,000 jobs. Translation: a pattern of economic growth more closely aligned with the nation as a whole, with overall job gains falling back toward pre-oil boom levels.
