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Work Patterns & Economic Activities in Texas

Instructor: James Walsh

M.B.A. Veteran Business and Economics teacher at a number of community colleges and in the for profit sector.

This lesson will cover the growth of three traditional industries of Texas: cotton, ranching and oil. They dominated the Texas economy for many years but things are changing. Texas will need to look at a more diversified future with technology as a possible leader.

Industries of Texas

The words 'Texas' and 'oil' are practically synonymous, but it's not too far a leap to think of cattle ranching either. These associations are well-founded, as Texas' main industries for a long time were oil, ranching, and cotton.

However, as modernity edges in, Texas may focus more on technology. Let's take a closer look at the history and future of economic activities in Texas.

The traditional industries of Texas, cotton, ranching and oil are represented here
Texas

King Cotton

After the Civil War when slavery was abolished, the big plantations of the South were farmed by sharecroppers. At the same time, large parcels of land could be obtained in the state of Texas at low cost. Owning land was a powerful incentive for a sharecropper who often had little left over after 'sharing' his crop with the landowner.

Emigration to Texas boomed after the Civil War and most of the early settlers came from the Southern United States. These new settlers may not have been well educated, but they did know a thing or two about was growing cotton. Combined innovations of improved plows, the cotton gin, and the coming of the railroads all led to cotton becoming king in Texas.

Texas replaced many of the old Southern states as a leading producer of cotton and would remain that way until the 1920's.

Cattle Ranching

The abundant and cheap land available in Texas had other uses besides growing cotton and a primary one was cattle ranching. The cowboy with the wide brimmed hat and riding gear is still an American icon today. Riding the open range on a fast horse with a rifle and lasso at your side became an American symbol of freedom and independence.

Life wasn't easy raising cattle though. Driving the herd to market meant weeks of living off the land and sleeping under the stars. But the appeal was undeniable for many who just didn't feel comfortable in cities and towns. Cattle ranching in the Western part of the state has always been part of the Texas economy, and one that many in other parts of the country most closely associate with Texas.

When the railroads came, ranchers found it was easier to transport cattle to market by boxcar. It meant an end to a way of life, but Texas then became a leading producer of beef for America's tables.

Oil and Natural Gas

Oil as an economic driver in Texas started small, but in the 1890's major oil fields were discovered. More fields were found into the new century and Texas became a major oil producer.

Thanks to the natural gift of the Gulf of Mexico, an oil industry began to take root. Oil was found in fields around the state, and transported to the newly built refineries in Gulf port cities like Houston. From there it could be easily shipped to the eastern US and the world.

Oil drilling is a familiar sight in Texas
Oil well

As the automobile replaced the horse and buggy, the need for refined oil (gasoline) took off. Texas along with Oklahoma, Arkansas and Louisiana were primed to fill the need. By 1929 those four states with Texas at the lead filled 60% of America's oil needs.

Today, natural gas is used to heat many American homes. The oil producers often found it near oil deposits, so they became natural gas producers too.

The oil industry became vertically integrated right from the start. Exploration, drilling, refining and transport were all done by the same company. Today they are some of the largest corporations in America with billions in sales and profits. The largest of them is Exxon-Mobil headquartered right in Houston, and oil and natural gas in general are a major employer of Texans.

The Boom Ends

Texas' three big industries served the state well and employed many Texans for many years. However, cotton began to decline decades ago as better growing techniques evolved around the world; Americans consumed almost 20% less beef from 2004 - 2014; and hydraulic fracking has made other parts of the US and Canada major oil producers. Oil's price has also fallen from over $100 per barrel to as low as $26.

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