I remember 1981 in Oklahoma very well; it was a happy and memorable time for my family. As a young man, I watched my father take such pride in the success of his fledgling office supply company.
Every week after church my family and I would go to the Heritage House Buffet where each and every delight a young boy could want was available in abundance. Lunch was almost always followed by an afternoon football game in the streets with the neighborhood kids. Oil was booming — having reached a peak of $113 per barrel — and the unemployment rate was averaging 3.6 percent. Life was good for our middle-class family.
Then came the oil and gas collapse, and Oklahoma’s economy nearly stopped in place. Oil prices fell to $22 a barrel, and what ensued was a domino effect on several of Oklahoma’s once vibrant industries.
After the failure of Penn Square Bank came the savings and loans crisis entering Oklahoma in a nearly 20-year recession. Our family, like so many across Oklahoma, found ourselves adapting to a new reality.
Over the next several years, oil prices continued to fluctuate while unemployment rates increased to nearly 9 percent by 1986. Major oil companies consolidated and left the state, leaving bustling downtown districts deserted and without opportunity.
Oklahoma’s economy was facing one of its most severe and devastating blows since statehood. The collapse, combined with high interest rates, left entrepreneurs with little option but to either travel for work or leave the state entirely.
In comparing the oil crisis of the 1980s and the oil collapse we are facing now, it is important to understand the fundamental differences. While they are similar in story, they are far different in structure.
Prior to the 1980s, Oklahomans had built their economy on the energy sectors — and some believed they were recession-proof. After the hard-learned lesson of the 1980s, Oklahomans endeavored to create a stronger, more diversified economy.
More specifically, over the last eight years, Oklahoma has remained focused on driving regulatory changes -- tort reform, worker compensation reform, tax reform and tax incentive reform. It has overhauled the unemployment tax system and eliminated waste fraud and abuse within government entities.
Additionally, Oklahoma has repealed costly regulatory burdens in the agriculture, tourism, manufacturing and energy sectors. These decisions have incentivized companies to create good-paying jobs and encouraged them to move their headquarters to Oklahoma. The results have been significant.
Growth in emerging markets has allowed Oklahoma to be ranked as one of the best places to start a business, according to Forbes.
The state’s GDP continues to see a steady increase. The aviation and engineering sectors have seen significant growth. Travel and tourism is Oklahoma’s third-largest industry. The agriculture sector has seen tremendous growth through the elimination of costly and unneeded regulations. This revitalization has allowed farmers across the state to have more autonomy and a greater ability to diversify their crops.
While the national economic system has been stagnant, Oklahoma has seen an increase in quality jobs with the average salary increasing to well over $40,000 per year. All these innovations and advances allowed the Oklahoma economy to grow at unprecedented levels. It also ensured that Oklahoma would not experience the devastation it faced in the 1980s if another oil and gas collapse occurred.
History was, in fact, repeated in 2015 when the price of oil dropped from $127 per barrel to $28 at its low. While Oklahomans felt the impact, the remaining pistons of our economy continued to run allowing unemployment rates to stay at an incredible rate of 4.7 percent.
Recently, economists stated that Oklahoma was feeling the effects of a recession, and they are correct. This is a time to take note of what is working and measure the successes that have been achieved. It is also a time to recognize there is more work to be done. By focusing on the elimination of unneeded regulations that hinder business growth, creating an environment where small businesses can succeed and meeting the education needs of emerging technologies, we will continue to diversify the economic landscape of our state.
While we currently face difficulties, Oklahoma’s best days are ahead. A path for diversification in economic engines of our state has been set and these efforts will undoubtedly leave a better future for our children and grandchildren.
Dan Newberry is a state senator and vice president of real estate operations at TTCU the Credit Union.
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