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(Note: There’s a related thread with 300 posts, many of them news articles from Houston business.)
The Houston economy? No, it’s unfortunately not very diverse. Between oil and gas, petrochemicals, pipeline manufacturing, and other energy-related industries, we’re talking about the predominant force in the Houston economy. It’s safe to say most of the middle-class jobs in Houston are in these industries.
By sheer virtue of having 6 million people living in this oil-based town, there are of course many jobs in food service, retail, home improvement, automobile sales, etc. But these are mostly lower-income jobs. Without the primary force of oil and gas and related industries, Houston would look very different. In fact, if oil and gas were banned tomorrow, Houston would collapse, possibly shrinking to half its size.
Houston’s information technology sector is anemic for a city its size. This is no doubt because of the shadow of neighboring Austin, which has become a national hub for tech.
Houston does have a remarkable health care sector. The Texas Medical Center is one of the largest of its type in the world. It provides a nice cornerstone to the Houston economy. It helps Houston a lot in that most of it is comprised of non-profit organizations, which create twice as many jobs on a dollar-for-dollar basis as for-profit origanizations.
Unfortunately, Houston’s universities are comparatively awful for a city its size. We have elite Rice University, which only has 7,000 students enrolled. And we have University of Houston, which may someday become notable in the state, but today is unfortunately mostly notable only within the metro area. And that’s about it.
Houston is also highly segregated economically, like many places in America. We have a rich, cosmopolitan middle class of lighter-skinned people living on the west side. And we have a sea of low-income, darker-skinned people almost everywhere else.
So Houston has a very specialized and somewhat low-skilled workforce, with weak universities. If you’re looking for brilliant experts in the geology of shale deposits, we got ‘em. If you’re looking for experts in something useful for the 21st century, we’re unfortunately lacking.
And that takes us to Houston’s grim economic future. Oil and gas are today known to be like asbestos. They should have been banned or tightly controlled decades ago. Even plastics, which are a byproduct of petroleum, are also an ecological nightmare, and are becoming tightly controlled in many places. Someday, people will look back in horror and amazement that people actually had vehicles in their driveways with internal combustion engines, spewing smog into the air. It’ll be like using lead paint or wearing mercury-lined hats.
Fossil fuels are the most lucrative commodity on Earth. Oil deposits are like warehouses full of caviar, just waiting to be shipped and sold. Unlike complex manufactured goods like microchips or software systems, oil is just pumped from the ground into tanks and sold. It doesn’t take nearly the same kind of brain power for the money earned.
The problem with alternative forms of energy is that they’re much less lucrative. The power required to run my electric car costs me about $25 a month in electricity instead of $100 a month in gasoline. That might be good for society, but that’s bad for the oil industry. In fact, it’s downright unacceptable for the oil industry. Imagine if the oil industry shrank by that same ratio - to 1/4th its size. Companies like Exxon-Mobil would be decimated. Most of the major oil companies would have to consolidate or go out of business. They’d have to lay off 75% of their employees. Houston would be decimated.
So the oil and gas industry clings on desperately, to a poisonous and obsolete product. There is no good exit strategy for the oil industry right now. They’re just buying time and hoping for a miracle, one that will probably never come.
When fossil fuels begin to wind down, as they must, we know exactly what will happen to the oil industry and to Houston. Just look north to Detroit. Look to the Rust Belt.
Can Houston diversify in time? With what? A few geological engineers and cancer doctors, millions of cooks and car salesmen and the like, and no good universities?
And we haven’t even talked about Harvey-like flooding. And that’s not to mention sea level rise that will eventually claim places like Kemah and Clear Lake.
The good news is that, with 6 million people, Houston will limp along, whatever comes our way. Just like Detroit and New Orleans and Youngstown are still limping along. But if you’re betting on the future of Houston, you should know all these things. It’s a high-risk place to settle, long term. Those of us who love it here will stick by it. If you’re looking to move here, know what you’re getting into. The hype-filled business news magazines, chambers of commerce, and real estate agents won’t tell you the truth.
(Note: There’s a related thread with 300 posts, many of them news articles from Houston business.)
The Houston economy? No, it’s unfortunately not very diverse. Between oil and gas, petrochemicals, pipeline manufacturing, and other energy-related industries, we’re talking about the predominant force in the Houston economy. It’s safe to say most of the middle-class jobs in Houston are in these industries.
By sheer virtue of having 6 million people living in this oil-based town, there are of course many jobs in food service, retail, home improvement, automobile sales, etc. But these are mostly lower-income jobs. Without the primary force of oil and gas and related industries, Houston would look very different. In fact, if oil and gas were banned tomorrow, Houston would collapse, possibly shrinking to half its size.
Houston’s information technology sector is anemic for a city its size. This is no doubt because of the shadow of neighboring Austin, which has become a national hub for tech.
Houston does have a remarkable health care sector. The Texas Medical Center is one of the largest of its type in the world. It provides a nice cornerstone to the Houston economy. It helps Houston a lot in that most of it is comprised of non-profit organizations, which create twice as many jobs on a dollar-for-dollar basis as for-profit origanizations.
Unfortunately, Houston’s universities are comparatively awful for a city its size. We have elite Rice University, which only has 7,000 students enrolled. And we have University of Houston, which may someday become notable in the state, but today is unfortunately mostly notable only within the metro area. And that’s about it.
Houston is also highly segregated economically, like many places in America. We have a rich, cosmopolitan middle class of lighter-skinned people living on the west side. And we have a sea of low-income, darker-skinned people almost everywhere else.
So Houston has a very specialized and somewhat low-skilled workforce, with weak universities. If you’re looking for brilliant experts in the geology of shale deposits, we got ‘em. If you’re looking for experts in something useful for the 21st century, we’re unfortunately lacking.
And that takes us to Houston’s grim economic future. Oil and gas are today known to be like asbestos. They should have been banned or tightly controlled decades ago. Even plastics, which are a byproduct of petroleum, are also an ecological nightmare, and are becoming tightly controlled in many places. Someday, people will look back in horror and amazement that people actually had vehicles in their driveways with internal combustion engines, spewing smog into the air. It’ll be like using lead paint or wearing mercury-lined hats.
Fossil fuels are the most lucrative commodity on Earth. Oil deposits are like warehouses full of caviar, just waiting to be shipped and sold. Unlike complex manufactured goods like microchips or software systems, oil is just pumped from the ground into tanks and sold. It doesn’t take nearly the same kind of brain power for the money earned.
The problem with alternative forms of energy is that they’re much less lucrative. The power required to run my electric car costs me about $25 a month in electricity instead of $100 a month in gasoline. That might be good for society, but that’s bad for the oil industry. In fact, it’s downright unacceptable for the oil industry. Imagine if the oil industry shrank by that same ratio - to 1/4th its size. Companies like Exxon-Mobil would be decimated. Most of the major oil companies would have to consolidate or go out of business. They’d have to lay off 75% of their employees. Houston would be decimated.
So the oil and gas industry clings on desperately, to a poisonous and obsolete product. There is no good exit strategy for the oil industry right now. They’re just buying time and hoping for a miracle, one that will probably never come.
When fossil fuels begin to wind down, as they must, we know exactly what will happen to the oil industry and to Houston. Just look north to Detroit. Look to the Rust Belt.
Can Houston diversify in time? With what? A few geological engineers and cancer doctors, millions of cooks and car salesmen and the like, and no good universities?
And we haven’t even talked about Harvey-like flooding. And that’s not to mention sea level rise that will eventually claim places like Kemah and Clear Lake.
The good news is that, with 6 million people, Houston will limp along, whatever comes our way. Just like Detroit and New Orleans and Youngstown are still limping along. But if you’re betting on the future of Houston, you should know all these things. It’s a high-risk place to settle, long term. Those of us who love it here will stick by it. If you’re looking to move here, know what you’re getting into. The hype-filled business news magazines, chambers of commerce, and real estate agents won’t tell you the truth.
I won't dive too deep into this mass of delusion but "if oil and gas were banned tomorrow, Houston would collapse"... the entire nation and planet would collapse, the economy of Houston would be the least of our worries.
Government and Healthcare dominate the Houston jobs market, together totaling about 25%, followed by Retail, Hotel and Food and Manufacturing (another 28%). Oil and gas is way down the list - about 3% of all jobs. Most of the actual work in oil is not in Houston but in field locations around the global - just the HQ work is done here.
Rice is in the top 1% of all universities. UH is right in the middle of the pack for large state or city universities.
Houston is booming, despite low oil and very low natural prices, and will continue to diversify and grow for decades.
Government and Healthcare dominate the Houston jobs market, together totaling about 25%, followed by Retail, Hotel and Food and Manufacturing (another 28%). Oil and gas is way down the list - about 3% of all jobs. Most of the actual work in oil is not in Houston but in field locations around the global - just the HQ work is done here.
Rice is in the top 1% of all universities. UH is right in the middle of the pack for large state or city universities.
Houston is booming, despite low oil and very low natural prices, and will continue to diversify and grow for decades.
Lol at 3% of all jobs. Where do you get your source?
Government and Healthcare dominate the Houston jobs market, together totaling about 25%, followed by Retail, Hotel and Food and Manufacturing (another 28%). Oil and gas is way down the list - about 3% of all jobs. Most of the actual work in oil is not in Houston but in field locations around the global - just the HQ work is done here.
Rice is in the top 1% of all universities. UH is right in the middle of the pack for large state or city universities.
Houston is booming, despite low oil and very low natural prices, and will continue to diversify and grow for decades.
Firms actually categorized in the "Mining / Oil and Gas" sector are only a small share of local employment, yes. However, a very large share of Professional and Business Services is devoted to serving Oil and Gas employers. Also, a large share of manufacturing employment is also devoted to selling to Oil and Gas.
While unlike many metros, our health care / medical industry could be called a primary employer (because it sells to customers outside the local area), Houston still does not have a major primary employer outside Oil and Gas. We have significant individual primary employers outside the Oil and Gas industry, like Sysco, Igloo, and HP, but they constitute a small share of employment - they're not a main driver of our economy. And unfortunately, it doesn't look like Oil and Gas have real prospects for job growth anytime soon, outside of the aforementioned manufacturers. The firms just aren't expanding and don't need to.
I think Oil and Gas at best will be a source of stability for Houston - but if worldwide demand for its products levels off or even declines, we're in trouble unless a replacement primary industry is generated, or we can participate in the tech industry growth that has largely passed Houston by.
DFW long ago moved on from Oil and Gas and now has the most robust and lowest-risk economy in Texas. Austin is exploding, but is overly dependent on a single industry (tech). San Antonio has its usual moderate growth, maybe a little too dependent on government / military, but it does have an emergent cybersecurity sector.
I just looked up the U.S. Bureau of Labor Statistics data for the Houston metro area. Remember, we’re talking about what I called middle-class jobs, as opposed to low-skilled, low-paying jobs like food service jobs. Keep in mind that a $100,000/year job is worth 5 times as much to a local economy as a $20,000/year job.
So of the roughly 3 million jobs in the Houston area, over 600,000 are in the industry sector called “trade, transportation, and utilities”. A lot of those can include oil and gas and related companies. Another 500,000 are in the industry sector “professional and business services”. And many of those can include oil engineering services and so on. And another 200,000 jobs are in “manufacturing”, which includes manufacturing pipelines and associated products for oil and gas development. And under 100,000 are in “mining and logging”, which we can guess are mostly related to oil and gas development. So, with a few calculations, we can guess that 25% of all jobs in the Houston area could be related to the oil and gas industry.
And remember, those are all jobs. When we exclude the half or more of all jobs that are in food service and other low-skill, minimum-wage types, we could be looking at 50% of all middle-class jobs that are in the oil and gas industry or related industries.
No, trade transportation and utilities is spread across all the industries. Most will go to Government and Healthcare sectors, then a lot to Retail, Wholesale, Food and Hotel and perhaps 3% to oil and gas. Same for Professional and Business Services and Manufacturing - 3% to oil and gas.
You have no basis for claiming 50% of all Houston middle class jobs are oil and gas. It is probably less than 5%.
I just looked up the U.S. Bureau of Labor Statistics data for the Houston metro area. Remember, we’re talking about what I called middle-class jobs, as opposed to low-skilled, low-paying jobs like food service jobs. Keep in mind that a $100,000/year job is worth 5 times as much to a local economy as a $20,000/year job.
So of the roughly 3 million jobs in the Houston area, over 600,000 are in the industry sector called “trade, transportation, and utilities”. A lot of those can include oil and gas and related companies. Another 500,000 are in the industry sector “professional and business services”. And many of those can include oil engineering services and so on. And another 200,000 jobs are in “manufacturing”, which includes manufacturing pipelines and associated products for oil and gas development. And under 100,000 are in “mining and logging”, which we can guess are mostly related to oil and gas development. So, with a few calculations, we can guess that 25% of all jobs in the Houston area could be related to the oil and gas industry.
And remember, those are all jobs. When we exclude the half or more of all jobs that are in food service and other low-skill, minimum-wage types, we could be looking at 50% of all middle-class jobs that are in the oil and gas industry or related industries.
But wait there's more, if we selectively exclude any jobs that fail to support the narrative found in post #1 over 100% of the jobs found in Houston are oil and gas related.
No, trade transportation and utilities is spread across all the industries. Most will go to Government and Healthcare sectors, then a lot to Retail, Wholesale, Food and Hotel and perhaps 3% to oil and gas. Same for Professional and Business Services and Manufacturing - 3% to oil and gas.
You have no basis for claiming 50% of all Houston middle class jobs are oil and gas. It is probably less than 5%.
You are likely incorrect. Certainly you're wrong when it comes to primary jobs, and jobs that pay middle class or higher wages.
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