The Texas economy has experienced rapid growth and decline throughout history. This essay will chronologically explore the circumstances that placed the state of Texas on the path to becoming a booming economy. It begins with the first settlers coming to Texas to farm the land for cotton and the cowboys herding cattle on their way north. From the discovery of oil that redefined the leading industry in Texas over the next few decades, to the recent technology boom. Texas has always been a beacon for immigrants seeking the opportunity to earn a good living through hard work. This essay will conclude with predictions about Texas' population and climate change, and what they hold for the future. The discovery of oil in East Texas played a huge role in the booming Texas economy in the 1930s. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay. What was once a predominantly agricultural state, Texas would soon be pushed into the 20th century thanks to the industrial sector that was growing due to oil production that helped provide a mechanical workforce that had not been widely used before the 1930s in Texas. With mechanical work, production exploded. For example, the invention of the tractor which could produce more bodies than a team of men working on a farm. However, this effectively drove farmworkers out of work, but from a progressive perspective, it certainly helped industrialize the Texas economy. It follows that the working class suffers at the hands of progression. As McFarlane explains: “Despite the unprecedented size of the East Texas oil field, so many people came looking for work that contractors were able to reduce wages. In the same way that a "surplus population" allowed Southern agriculture to depend on cheap labor, oil entrepreneurs found that the underemployment of the Great Depression provided them with their own reserve of cheap labor. » (865). According to Schumpeter's theory of creative destruction, massive oil production in Texas disrupted the cotton and livestock industries. These two once-predominant industries would soon decline as people flocked to the boom towns springing up across East Texas. Over time, the enactment of the NAFTA trade agreement also impacted the Texas economy, which is still a source of controversy in today's political economy. NAFTA is the free trade agreement between the United States, Canada and Mexico. Since Texas borders Mexico, this trade agreement has played the most important role in the Texas economy. What essentially happened was the outsourcing of cheap labor from Mexico to produce industrialized goods across the border that could then be easily transported to the United States through the free trade agreement. This caused disruption among Texas' working class, who quickly experienced a loss of industrial jobs. As Klier and Rubenstein demonstrate regarding the auto industry: "Among the top five Mexican producers, premium VW had 82 percent of its North American production in Mexico in 2016, while the shares of the three Detroit producers varied between 13 percent and 20 percent. percent. Nissan, which fell between the extremes, with 45 percent of its North American production in Mexico in 2016, more than doubled its shareNorth American production located in Mexico in 1995.” (6). This is causing political tension between the United States and Mexico, as we begin to see an increase in cheap labor outsourcing and even illegal immigration at the border. Racial tensions soon ensue, as does xenophobia. The most recent wave of creative destruction in the Texas economy has come from high-tech industries. Texas is home to some of the most advanced medical facilities. Additionally, the economy is also impacted by the dominance of the IT industry in the San Marcos-Austin region. In 2002, the Texas government allowed the expansion of electric companies by allowing consumers to choose their own provider. The result was a competitive market that drove down the cost of electricity. This in turn would be of interest to large companies looking to establish their headquarters in an area with low electricity costs. As Preuninger explains: “In Texas, power generation operations and power plant investments are price driven. Wholesale and retail prices are set by competitive market rates and, in turn, determine market rates. The role of the wholesale market is to enable exchanges between producers, retailers and other financial intermediaries for the delivery of electricity in the short and long term. …electricity is almost always on the short list of cost considerations when companies are looking for locations for offices, manufacturing plants and e-commerce centers. With Texas' competitive market, businesses gravitate here for its low prices, reliability, and affordability. …these facilities require a huge amount of electricity from the state grid – and they come here because they know they can get it reliably and affordably. » (42). The Texas economy faces multiple threats that will affect the growth of the business sector. The main threats facing Texas are overpopulation and lack of resources which can impact the economy with the growing need to provide more services such as water, power grid, roads and schools more large. Texas' population boom calls for action to avoid shutting down major services due to pressure to provide more electricity and clean water as the population grows. Additionally, the number of cars in Texas is increasing, so the need to build larger roads is also a priority to plan for. Urbanization in Texas has changed the future of the state. As more people move to Texas, the pressure for growth in major metropolitan areas such as Dallas-Fort Worth, Houston, Austin and San Antonio continues to increase. This will force lawmakers to change their strategy in each city to accommodate the burgeoning population to meet the needs of the housing sector. In recent years, Texas' economy has faced the disastrous impacts of climate change, a threat that is slowly increasing every day. In recent years, high temperatures have caused significant damage to the Texas economy. Notably, hurricanes like Harvey have had a devastating impact on Texas, causing enormous damage to people and businesses. These hurricanes cause rising water levels and powerful winds that destroy everything in their path. Climate change, according to several scientific facts, indicates that the Earth is getting warmer, and for this reason there has been an increase in deadly hurricanes inthe Gulf of Mexico. Indeed, hurricanes form and strengthen in warm waters. Water levels on the Texas coast have also increased significantly in recent years. Texas will be one of the states that will significantly feel the impact of climate change. According to The Houston Chroncile "Among the study's findings, Texas will likely experience by the 2050s: The number of extremely hot days per year — with temperatures topping 95 degrees — more than double, from an average of 43 to 106. About 4,500 additional heat-related deaths per year, and almost half of this increase will occur over the next five to 15 years. (For comparison, the study points out that there were about 3,400 total deaths due to traffic accidents in Texas in 2013.) Sea level rise of up to 2 feet at Galveston. A $650 million per year increase in storm losses along the coast, bringing the state's annual damage total to more than $3. 9 billion. A marked decline in worker productivity and crop yields. » (Baddour 2016). The air pollution that factories put into the air also causes climate change by increasing the percentage of poisoned air and oxygen. This problem also impacts people's health and leads to lower productivity and higher budget to provide medical care in hospitals and other medical centers. It is very important to prepare for climate change before it causes more damage to the economy. Texas can address this problem by educating and raising awareness about climate change and the potential threat it can pose to everyone. Texas has faced multiple disasters in recent years and they have taken a toll on the economy. After Hurricane Harvey, people lost their possessions, including their homes and cars. This loss had an impact on a certain industry in this area. Despite the trauma and headaches, the auto industry boomed right after because people were buying new cars after the flood damage. According to the Houston Chronicle, “while devastating for cities, counties and families in Southeast Texas, this phenomenon has created a small macroeconomic boom for the state. As many Texans lost their cars to floodwaters, new car sales experienced a short-term boom, leading to 13% growth in motor vehicle tax revenue during the most recent quarter. Ditto for a small increase in sales tax revenue as flood victims rush to replace items lost in the storm” (Baddour 2016). Another problem facing the budget crisis is funding for government programs. The Texas Department of Health and Human Services is one of the primary branches serving low-income families in Texas. According to the Houston Chronical, “during a special session called by Gov. Greg Abbott over the summer, state lawmakers embezzled another $500 million from the Texas Health and Human Services Commission to fund public education programs. As a result, lawmakers could be fined $2. The $5 billion Medicaid bill shortly after they met again in Austin in 2019. Then there are the additional drains on Texas coffers from Hurricane Harvey recovery efforts, Hegar said. That's bad news for lawmakers given the comptroller's prediction that the state won't.