economics

Recently Lisa posted some photos of what resource extraction looks like. I thought I would show a different side of this phenomenon: what an oil bust looks like. I grew up in the Middle of Nowhere, Oklahoma. The area has been through two oil booms, one in the 1920s and one in the 60s through the 80s.

But with any energy boom eventually comes the energy bust. I took some photos I took showing what communities looks like if their economy is disproportionately based on oil and the oil companies leave, which were reproduced at Business Insider.

Oil wells that have never been installed sit around on empty lots, slowly rusting. Many oil wells that were in use at one time now sit motionless. Because of high oil prices in the last few years, some oil wells have been put back in production; it’s the first time since I was a kid that you can look across pastures and see many of the oil wells actually pumping. Pipes crisscross the landscape, often slowly tumbling downhill from lack of maintenance. When they get old and rusty enough they start breaking apart, leaving jagged edges that occasionally lead to trips to the doctor for a tetanus shot. An old storage tank, long past any usefulness, slowly rusts.

In an energy bust, real estate prices plummet. If there aren’t many other industries in the area, there’s no way to attract buyers, and houses flood the market as people move looking for work. Houses, many of them perfectly serviceable, slowly decay from lack of upkeep. Families that became wealthy from oil lose their fortunes. The house below was owned by a family that became wealthy from the 1920s oil boom. When that oil bust hit, they lost everything. Their house sits far out in the country and slowly crumbles. Downtowns die and the buildings sit empty and deteriorate over time. Towns don’t have enough children to run independent schools, so rural school districts consolidate. This school was sold off and a local resident told me that it has been, at various times, a bed and breakfast, internet cafe, and beer-only bar, between bouts of sitting empty.

Ponca City is centered around the Continental refinery plant. Continental was owned by Conoco until 1984. There used to be a significant Conoco presence in the town, and as with Bartlesville, it has faced hard times since the Conoco-Phillips headquarters moved to Houston. Some neighborhoods were polluted by the refinery, leading the company to buy out homeowners and tear down the houses (some owned by private individuals, others by the Ponca tribe). In one area where this occurred, the land is now a park. Local residents have heard that Conoco is planning to tear down a lot of its old administrative buildings so it doesn’t have to pay insurance or maintenance costs, meaning there will be even more large swaths of empty land scattered around the city.

There’s nothing exceptional about the experience of these communities. They simply represent a story played out in many towns as oil booms fade and corporations move their headquarters to larger cities. Now, as the Keystone XL pipeline project goes forward, many such communities gear up for their next ride on the energy roller coaster.

Gwen Sharp is an associate professor of sociology at Nevada State College. You can follow her on Twitter at @gwensharpnv.

Stephen W. sent us a link to a Walmart YouTube channel that recreates the supermom mythology.  The website encourages moms to submit videos of themselves explaining how they’ve figured out how to save money while shopping, cooking, and cleaning.  The website reads:

With creativity, ingenuity, and Walmart’s unbeatable prices.  Moms can do anything.

(I bet they can’t coupon us out of this economic crisis though.)

Here’s a screen shot:

My first thought was: So apparently the wife is the one doing all the spending and, if she is a good little wife, she’s frugal and makes her husband’s hard-earned money go further.  This would reproduce the husband as money-earner/wife as money-spender stereotype.

But then I realized: There’s no mention a dad or any earner anywhere on the front page.  It’s nothin’ but moms.

I have seen lots of graphs showing rates of immigration to the U.S. over time, but I just found this graph showing the rates of emigration from Mexico from 2006 to early summer of 2008 (from the Migration Information Source website; this is all emigrants, regardless of destination, though of course the vast majority will be to the U.S.):

A quick note on the data: Since it required someone from a family to be left in Mexico to be asked about family emigration patters, it doesn’t include those situations where an entire family left all at once; however, my understanding of immigration patterns is that this type of immigration is a minority of all movements, since most families prefer to send one or two family members to get a foothold in the host country.

As we see, there’s a general overall downward trend during that time period, which isn’t surprising given the downturn in the U.S. economy, especially the construction industry. The Mexican government reports that remittances sent back to Mexico are down this year as well.

 There is also a seasonal pattern, with the period from August to February of each year being the lowpoint and then picking up again in the spring. My first thought, since I study agriculture, was that this might have something to do with the growing season and when agricultural workers are needed in the U.S., but of course it’s a stereotype that most Mexican immigrants are field workers, so that’s probably not it.

Any thoughts on what might explain that pattern?

If there are any method-heads out there who want to tell me this isn’t as bad as it looks, I’m ready to listen.

Actually, I just thought of one.  The line looks like it drops to the bottom, but the scale starts at 61 and ends at 65.  Even still… method-heads?

(Found here, via Alas!)

Have you ever wondered why many stores now no longer require a signature when you make a purchase of $25 or less with a credit card?  Today, I found out why.

It has to do with the pressure to increase employee efficiency.  So how do you make employees more efficient?  According to this article from the Wall Street Journal, you change practices.  Consider:

Then, you start clocking employees.  For example:

Daniel A. Gunther has good reason to keep his checkout line moving at the Meijer Inc. store north of Detroit. A clock starts ticking the instant he scans a customer’s first item, and it doesn’t shut off until his register spits out a receipt.

To assess his efficiency, the store’s computer takes into account everything from the kinds of merchandise he’s bagging to how his customers are paying. Each week, he gets scored. If he falls below 95% of the baseline score too many times, the 185-store megastore chain, based in Walker, Mich., is likely to bounce him to a lower-paying job, or fire him.

According to the article, the cost is, in large part, paid by the employee in the form of comfort on the job, the ability to make human contact with regular customers, and having to be mean to old ladies to get them to hurry up. 

Jay Livingston has a nice analysis.

Sandra F. sent in a link to “Prop 8: The Musical,” a parody starring Jack Black, Margaret Cho, Andy Richter, John C. Reilly, Neil Patrick Harris, and other celebrities:

The clip, though a parody, brings up a reason some groups that might not care about the reasons gays and lesbians want to get married, or about gay rights more broadly, nonetheless supported gay marriage: money. The New York Times discussed this issue here. Weddings are big business, and the more people who are eligible to be married, the more money is potentially available to wedding-related businesses. In 2004, the Congressional Budget Office estimated the impact legalizing same-sex marriage would have on the budget (end result: an estimated $1 billion a year for the 10-year estimation period). That’s just the federal budgetary effect; it doesn’t include private-sector benefits.

This anti-Prop 8 video makes an explicitly economic argument for gay marriage:

You might compare these videos to the commercials in this post; in those ads, advocates of gay marriage try to rhetorically frame the issue as being about love–that is, gay marriages are equated with straight marriages by focusing on the idea that what is important in a marriage is love, regardless of the sex of the spouses. Clearly you could use them to discuss gay marriage, but they might also be good for illustrating the idea of framing of social issues.

Thanks, Sandra!

This ad — found at the height of the foreclosure crisis in a magazine for the obscenely rich — points out that, for obscenely rich people, the crisis is a bonus.  What struck me most was the double meaning in the headline. “Above It All” has both descriptive and moral meaning. 

It is also a good example of how the rich see the economic struggle of the masses as an “opportunity” to get richer.

Text below.

Text:

Above It All.

Despite the headlines, high-end properties still in demand among affluent set.

What do recent headlines proclaiming a dip the [sic.] current real estate market mean for upper-income vacation-home buyers? Opportunity! A survey released in April by American Express and Harrison Group revealed that among Americans with a household income of more than $500,000, 77 percent say real estate presents a ‘real opportunity’ right now, and 40 percent say they’re in the market for property this year. Of those in the market, 33 percent are looking for a second home, and 25 percent are looking for a third.

Here are some graphs about income inequality over time:

From the Working Group on Extreme Poverty.