Deep freeze adds another layer of woe for struggling workers
Last Tuesday, as Houston temperatures hovered below freezing for much of the day, Gloria Sanchez’s lights — and heat — cut off and on. For Sanchez and millions of other Texans, necessities usually taken for granted — including warmth, water and access to food — had suddenly been thrown into question. Then she got a call from her manager at one of the two jobs she works to make ends meet. Bath & Body Works would close because of unsafe driving conditions.
With that, 32 hours of wages disappeared.
“It broke my heart,” Sanchez said. “Because I knew my check was going to come out short.”
The winter storm will likely cost the country $50 billion in damage and economic loss, according to an estimate from forecasting company Accuweather. Much of the economic impact will be felt by hourly workers such as Sanchez, economists said.
“You need to think about what’s permanently gone and what has just been delayed,” said Patrick Jankowski, an economist at the Greater Houston Partnership, a business-financed economic development group.
Oil and gas production can ramp back up to meet demand. Sanchez’s 32 hours without pay are gone forever.
The winter storm hit an economy already grappling with a yearlong pandemic that had shaken up what work meant for many. Corporate office employees who worked from home for the past year suddenly found themselves unable to do their jobs without power, heat and water. Office buildings temporarily closed, but there was no way to keep working remotely without Zoom meetings and strong cell service.
Delayed production
Houston’s ports and airports reflected the dichotomy of the regional economy. On Presidents Day, the Port of Houston was eerily quiet. The surrounding petrochemical facilities had largely powered down in response to calls to reduce energy consumption as the winter storm crippled the electric grid, and not a ship or barge came in or out of what is usually one of the nation’s busiest ports because of icy conditions. Across town, the airfields at Hobby and Bush Intercontinental airports were also closed, canceling hundreds of flights.
But the loss of power and water pressure at the petrochemical facilities surrounding the port merely delayed the production of goods that will be shipped once operations resume, said Bill Diehl, president of the Greater Houston Port Bureau. In contrast, airline trips that were canceled, airport restaurant meals that were never served and wages that were unable to be earned by hourly workers are unlikely to be made up.
When the Metro bus that Monique Warren, a guard at Bush Intercontinental Airport, takes to her graveyard shift was canceled Feb. 14 due to snow, she had to miss a day of work. The next two days, the weather closed the airport altogether. The three days without pay came on the heels of a seventh-month airport furlough that had largely depleted her savings, which she had hoped to use to purchase a car.
“The money that I lost, I was planning on saving it and buying food,” Warren said. She earns $9.50 an hour and said a higher minimum wage would make it easier to weather calamities such as the pandemic-induced furlough and the cold snap’s closures.
Joe Garland, who called out of work at Kroger after spinning out on ice on his way in, is now worried about next week’s bills as a result of missing three days of pay. He said one way business owners could come to the aid of front-line workers in this type of an emergency would be to cover hours that were unable to be worked because of the disaster.
“It’s a kick while you’re down to all of the service industries, restaurants and others who were already battling through the pandemic,” said Peter Rodriguez, an economist and dean of Rice’s Jones Graduate School of Business. “Regrettably, it really exacerbates the pain for them, more than it creates new pains for other industries in particular.”
Not all will be hurt by the storm. Businesses that will help fix the damage — such as those that make oil field equipment, work on plumbing or landscape homes and businesses — should see a temporary boost in business, Jankowski said.
For example, the well-site valves, compressors and pipes damaged by the freeze will have to be replaced, and many of the manufacturers who make those parts are located in the Houston region.
“It’s possible if you’re an oil field service and supply company, you may get some revenue from this,” said Karr Ingham, a petroleum economist with the Texas Alliance of Energy Producers. “But we haven’t heard there would be vast damage. In any case, all of these companies have insurance.”
Boost for hotels
Texas, the nation’s top oil-producing state, experienced its largest disruption to production as power outages and freezing temperatures rendered wells inoperable. Crude production statewide fell by about 40 percent, or 2 million barrels a day, down from 4.8 million barrels per day before the arctic blast hit. While that crude can still be extracted and sold when temperatures thaw, oil companies lose out on revenue whenever they can’t get their product to market, Ingham said.
In general, however, Jankowski said bumps from pent-up demand and temporary boosts to certain sectors would neutralize hits to industries that saw business disappear during closures.
“It won’t show up in GDP,” he said, “because we’re a $512 billion economy.”
And for one industry hit hard by the pandemic, the storm may have opened an avenue for survival. The hotel industry, which was having a historically poor year as the pandemic put a halt to the travel, conferences and events that drive bookings, suddenly had empty hotels sell out as families without heat or water looked for places to shelter.
Typically, hotels see occupancy rise for as long as a month after a natural disaster, said Paul Vaughn, senior vice president of the hotel consulting firm Source Strategies in San Antonio.
“During the immediate event, you’re going to have people needing hotel rooms,” he said. “But in the aftermath, you’re going to end up with some construction crews and a bunch of other people coming in to clean the mess, and they will also need rooms. So you’ll see a ripple effect because of the effect of this crisis.”
As for long-term impacts, Rice’s Rodriguez fears employers may think twice about relocating their businesses, both to Texas in general and to Houston — no stranger to natural disasters — in particular. He said the prolonged outages could make it look like the state has unreliable infrastructure.
“It’s true that this is very rare, but that’s not the way it will play into the memories of people making investment decisions,” Rodriguez said. “They’ll wonder about just our overall ability to manage crises.”