KANSAS CITY, MO – 65 years ago this week, moviegoers watched a tale unfold of what happens when oil is discovered in a rural area that had been a ranching stronghold. In the movie Giant, starring James Dean, a Texas town is transformed due to the discovery of “black gold”.
Over the past few years, researchers at USDA, the University of Oregon, and the University of Wisconsin-Madison studied the cumulative effects of oil booms and subsequent busts on communities and found that the oil booms offered a monetary incentive to families.
On average, according to the report, during the boom of the late 70s households experienced a $5,000 annual increase in income and almost $7,000 per year during the early 80s.
Unfortunately, the results of a “bust” were greater driven in part by increased unemployment and lower relative wage gains.
For example, researchers found that the losses averaged more than $8,000 annually per household, and were primarily targeted at workers between 25 and 54 years of age.
One interesting finding from the research is that after 1993, the subsequent booms and busts appear to have no effect on household income.
(SOURCE: All Ag News)