Yesterday, Reuters reported on the economic upswing that has led to record levels of employment and wages in West Texas. The report highlighted one oil company that has been able to triple its workforce in the past two years and raised wages for its 1,200 employees.
Beyond the oil companies themselves, it also pointed to the effect oil development had on the local economy, increasing spending at hotels, restaurants, car dealerships, and other local businesses. Among other factors, the report’s analysis indicated that technical advances in the oil sector have contributed to increased wages and increased tax revenue for local cities:
“Oil companies are drilling wells faster, and putting more wells on a single site, using technology to find the best angles and depths to get the most out of each layer of shale. That has helped boost per-employee output by Texas oil and gas companies to an estimated $820,000, according to Waco, Texas-based economist Ray Perryman. ‘Companies are making enough money to be able to afford to pay higher wages,’ he said. Unemployment was 3.2 percent in Odessa and 2.5 percent in Midland in February. Average weekly earnings in March hit records in both towns, which have a combined population of about 250,000. Sales tax receipts have soared.”
According to David Berson, chief economist for Nationwide Mutual, Texas can be an example for the rest of the country:
“If the rest of the country starts to look more like West Texas…then we will certainly see stronger wage gains”