By Kevin Tang
The first major hurricane of the 2017 Atlantic hurricane season, Hurricane Harvey struck the Lone Star State, inundating the area with trillions of gallons of water. It not only disrupted thousands of lives, but also it devastated the economy. The storm damaged billions of dollars' worth of property and crippled the chemical, energy, and shipping industries, leading some to call it the most expensive storm in American history, at a total of $190 billion.
Last year, Texas accounted for nearly 8 percent of American output with GDP of $1.5 trillion. The US economy was projected to grow by 2.8% before Harvey but now, it is expected to decrease by 1-1.8%.
Most of the losses were due to damaged uninsured property. In situations like these, after natural disasters, it is common to see more unemployed people who are willing to help rebuild; however, Texas is a special exception. In Texas, a disproportionate amount of the construction workforce is comprised of illegal immigrants. Due to the state's harsher stance on immigration, many would not help rebuild for worry about deportation. This not only spells longer reconstruction times but also a longer time for Texas's economy to bounce back. Without the necessary infrastructure, the affected industries cannot operate properly and contribute to the state's already declining economy.
Furthermore, the cuts in Texas's manufacturing capacity in 2008 have dire consequences today as there is a shortage of building materials. Due to these factors, investors are wary and prudent, therefore unwilling to help out. This stinginess will only elongate the time needed to rebuild.
Ultimately, the oil industry is taking a big hit. While it used to account for 24% of America's oil, Texas was forced to shut down its facilities recently. This both exacerbated the unemployment problem within the state and increased gas prices across the entire country. "It may take weeks for refineries to repair and replace damaged equipment, " Mr. Dye, a chief economist at Comerica Bank, said. "Port facilities have also been damaged, and this may result in an export bottleneck." Until Texas's infrastructure is rebuilt, all Americans' will directly see the impact of Harvey through their gas prices.
Those not in Texas still face the broader ramifications. The hurricane toppled thousands of bridges and ruined major freeways. A month later, transportation is still at a standstill as road closures persist, lengthening what would be short commutes by hours. Only with continued funding from FEMA and help from other organizations can Texas recover.
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