Falling energy prices are deepening the pain felt in West Texas, according to a recent article in The Wall Street Journal. In an examination of the economic effects in the Permian Basin, the Journal noted that there is downward pressure on wages as job applicants swell. Meanwhile, prices on everything from hotel rooms to tacos are falling, and late payments on small business loans are increasing.
Cities like Midland have been hit the worst. At least 65% of economic activity in that community is directly tied to the energy industry. Unemployment rates in the Midland-Odessa area crept up to just over four percent in the fourth quarter of last year. That’s up from 2.6% a year earlier. It should be noted that that unemployment rate is still well below the national average of 5.5%. Even so, small business loan delinquencies have risen above the national average.