Texas Economy: Not Just Relying on Oil Anymore
Candace D. Willson
Professor: Alan Leonard
Economics 100: Principles of Economics
May 29, 2015

Texas Economy: Not Just Relying on Oil Anymore
Oil prices have been declining recently due to an increase in supply. The effect has the potential cause a recession in Texas. As one of the largest contributors of national oil in the U.S., the price drop could impact the state’s economy (Economist, 2015). The article published in The Economist (2015) explains the oil history and current plight in Texas. Texas has a strong economy with some booming new industries; their banking sector has also changed their ways, but it might not be enough to keep the state out of economic trouble.
Four Observations
The first key point of the article is to explain the economy in the state of Texas. “From 2009 to 2014, one in five jobs created in America was in Texas” (Economist, 2015). The state was considered to have one of the largest economies in the world and produces a high percentage of the country’s oil. The recent price drop in oil could be devastating to one of the strongest economies in the country.
Secondly, the article deals with the potential for new industries to “take up the slack” created by the falling oil prices (Economist, 2015). Austin, the capital of Texas, has successfully created a tech start-up boom. There are many younger, educated individuals trying to make a life in the area. In fact, the percentage on young people is higher than most other states and the median age is slightly lower. Montgomery (2015) explains that Austin has no personal income tax and also has fairly low real estate costs. When these factors are compared to costs of living and working in Silicon Valley, Austin looks very promising for the tech industry. The tech industry alone saw growth of more than 40% in the 2000s. Montgomery (2015)