Texas Town's Fortunes Rise And Fall With Pump Jacks And Oil Prices | KERA News

Texas Town's Fortunes Rise And Fall With Pump Jacks And Oil Prices

Aug 9, 2016
Originally published on August 10, 2016 7:41 am

Out on the wide open plains of West Texas, you can see the horizon for 360 degrees, interrupted only by the nodding up and down of pump jacks pulling oil up out of the earth.

There lies the aptly named town of Midland.

To get the hang of the place, you need to start downtown, on a corner near the Chase Bank, where an electric billboard displays the essentials: the temperature, a message — "God Bless Midland" — and a number. On this day, it's 45.94.

That number — the price of oil by the barrel — affects everything in Midland: whether people have jobs, how much they pay in rent, whether waitresses make tips.

And that number helps explain why the middle class in Midland shrank faster than almost anywhere else in the country since 2000 — because so many people here have gotten richer.

This boom-bust town reveals a complex picture of America's economic recovery.

During the boom, people got rich.

Stephanie Shelton, a 47-year-old lifelong Midlander, works at the community college.

At one point, she says, the local McDonald's was paying new hires between $16 and $18 an hour.

"When McDonald's is hiring at $16 an hour, you can imagine what dentist offices are paying or hospital reception is paying," Shelton says.

But when the bust comes, "you have vacancies everywhere," she says.

She points out two for-sale signs on nearby buildings.

"You would never have seen that before," she says.

A day in the life of Midland shows how it's an uneasy moment to be here.

Oil used to be more than $100 a barrel. Now it's less than $50.

Some of the people who got rich in Midland are now spending down their savings. Others have left. And some are hoping to use this downturn as a springboard when the next boom comes along.

It's 8 a.m. at the daycare center Ed Mayberry and his wife Latoya run out of their home. Mayberry, 31, is also a pastor, who used to minister to oil field workers.

When oil prices were at their highest, Mayberry says, the field workers would tell him about vacations in Hawaii and new car and house purchases.

"Just a lot of material stuff," he says.

But people didn't seem happier overall.

"Children were raised with Dad kinda out of the house most of the time, so Moms were overwhelmed even during the boom," he says.

Mayberry and his wife recently raised prices at their daycare center to $400 a month per child from $300.

There's a waiting list, so they're hoping to move into a bigger space. And Mayberry is looking to buy a church where he can minister.

"It's not to say that I'll be a millionaire next week or next year, but I feel like I'm kind of at a tipping point where all the momentum up until this point is kind of getting ready to tip me over," he says.

In some ways, Midland's wild economic swings are nothing like the rest of the country; its boom-bust cycle is pretty extreme.

But in other ways, the story of Midland does mirror the story of the U.S. In the last decade, two-thirds of Americans who left the middle class went up — they got rich. Only one-third who left the middle class sank down into poverty.

It's lunchtime at the Mulberry Café. The owner, Jerry Morales, is also Midland's mayor. The Mulberry is the newest of three restaurants his family owns in town.

Running any restaurant — or any city — can be challenging, Morales says. But it's even more challenging when the tax income and the population ricochet all over the place from one year to the next.

He says it's nerve-wracking just trying to figure out how much money to set aside for something like road infrastructure, for instance.

"You get a report from your staff saying 30 percent of the roads are unrepairable, we need $112 million to catch up on that 30 percent, not including if we get another boom here in a year or maybe less, and you have a 13 percent increase in your traffic, you're going to have a challenge, that's scary," he says. "You're only going to get further behind."

This holds true as a restaurant owner, too: Sales go up and down about 20 percent depending on the price of oil, Morales says.

Everyone finds creative ways to attract talent: The mayor closed his restaurants on Sundays, offered employees free meals, flexible hours and insurance. Other places offered free shuttles to and from work.

But when oil prices fell, everything changed.

Thomas Carney got laid off from his job in the oil fields. He has six children and has lived in Midland for nearly 32 years.

Three years ago, Carney was doing well financially: bills were paid on time, and there was money left over.

Last year his oldest daughter went to the Rose Bowl with her school band and played the flute in the parade.

He wrote the $3,000 check and told her to have fun. Not this year.

"We cut all that out. And everybody's like, 'Man that's your kids' stuff.' I understand that, and she understands that," he says.

Carney, who is 33, figures he has about eight more months of savings. He keeps applying for jobs, but nobody's hiring. If oil prices don't go back up soon, he'll leave town.

By mid-afternoon, the Texas sun is blazing.

Construction at the new amphitheater on the edge of town has stopped for the hottest hours of the day. The only movement is a pump jack nearby, slowly drawing oil up from the earth.

Barbed Cross Construction is building the amphitheater; John Dunn is its 35-year-old CEO. He started the company about 10 years ago, doing handyman work by himself.

He estimates he made about $150,000 by himself that first year. Now, the company does about $5 million annually in sales.

When he realized he had finally left the middle class for good, he sent his wife and kids on a Caribbean cruise.

Compared to other people in Midland, Dunn says, that's downright humble.

"People spend stupid money around here, I mean stupid money," he says. "We've done residential remodels where people put half a million dollars into a $400,000 house."

It's cliche to call America "the Land of Opportunity." And to many Americans, it feels like the phrase no longer rings true.

But opportunity — and risk — turn up everywhere in Midland.

Take Jesse Murillo and his wife, Megan Newman. Both 31 now, they met in college at Cornell, moved to the Texas plains, and bought a piece of property outside town.

"Just lots of brush and thorny things," says Newman, looking out at scrub and mesquite bushes. It's late in the afternoon, and the sun is low in the sky.

The couple decided to open Out West RV Park and wait for the next boom to hit. Right now, about one-third of the spaces are full, and they both work second jobs.

They've made sacrifices to get this far: They lived in an RV at the park for almost three months without water and electricity.

Both of them grew up poor. Newman's mother emigrated from Poland.

"She came over on a boat. All by herself, 19 years old," Newman says. "How much courage does that take?"

And Murillo's family has roots in Mexico.

"At a certain point we would bounce around from family member to family member. Because we just didn't have any food," he says. "I remember — I'm getting so choked up here — I remember one year, our bunk bed broke and we didn't have enough money to replace it, so we slept on the floor."

With their Ivy League degrees, they could have gone into banking or consulting. But they wanted to build something of their own.

They've already climbed out of poverty to enter the middle class. Now they hope that with the next boom, they catch a wave that will carry them even higher.

Copyright 2016 NPR. To see more, visit http://www.npr.org/.

AUDIE CORNISH, HOST:

The middle class in America is constantly shifting and changing shape. Since the 1970s, it's shrunk decade by decade. We also know that income inequality is growing. Meanwhile, the middle class recently crossed an important line. For the first time since experts started keeping track, it is no longer a majority in America. This is The New Middle.

(SOUNDBITE OF MUSIC)

UNIDENTIFIED WOMAN #1: I think middle-class is you can pay your bills comfortably. You're steady.

UNIDENTIFIED WOMAN #2: Family of five fifty, 50,000...

UNIDENTIFIED MAN: Well, I always see it as someone who actually owns their own home.

UNIDENTIFIED WOMAN #3: Yeah, being able to afford a place to live and pay your bills and enjoy life.

UNIDENTIFIED WOMAN #4: The new middle is a two-plus income family with a side hustle.

ARI SHAPIRO, HOST:

We recently visited a place where the middle class has shrunk faster than almost anywhere else in the country. That's because so many people there have gotten richer. This is a boom bust town that reveals a complex picture of America's economic recovery.

We are on the wide open plains of West Texas, where you can see the horizon for 360 degrees interrupted only by the nodding up and down of pump jacks pulling oil up out of the earth. This is a town conveniently named Midland.

STEPHANIE SHELTON: Oh, so you want the big tour of Midland. You got 10 minutes?

SHAPIRO: (Laughter).

Stephanie Shelton is a lifelong Midlander. She works at the community college, and she agreed to give us a quick spin through her home town.

SHELTON: You're going to take a right on Big Spring.

SHAPIRO: To get the hang of this place, you need to start in the middle of downtown where an electric billboard displays the essentials.

SHELTON: And I think the marquee is going to be right up here somewhere.

SHAPIRO: There's a Chase Bank here, and on the corner, there's a billboard that says the time, the temperature. It says, God bless Midland. And then it says, oil - 45.94 a barrel.

That number - the price of oil by the barrel - affects everything here - whether people in Midland have jobs, how much they pay in rent, whether waitresses make tips or not. And that number is also the reason the middle class here shrank so much since 2000. During the boom, people got rich.

SHELTON: At one point, there was a sign at McDonald's that said that they were starting new hires at, like, between $16 and $18 an hour.

SHAPIRO: What?

SHELTON: So...

SHAPIRO: At McDonald's - starting salary.

SHELTON: Yeah. I mean when McDonald's is hiring $16 an hour, you can imagine what dentists' offices are paying or hospital reception is paying or...

SHAPIRO: But what happens when the bust comes?

SHELTON: Then every - then you have vacancies everywhere. See; like, all these for sale signs now - you would have never seen that before. There's two on these corners right here.

SHAPIRO: We're going to show you a day in the life of Midland, and it's an unsteady moment to be here. Oil used to be above a hundred dollars a barrel. Now it's below 50. Some of the people who got rich in Midland are now spending down their savings. Others have left. And some are hoping to use this downturn as a springboard when the next boom comes along.

UNIDENTIFIED CHILD: What's this?

SHAPIRO: It's 8:00 a.m. We're at a daycare center where a dozen little kids are getting the jitters out before they sit down and start their lessons. Ed Mayberry and his wife run this center out of their home. He's also a pastor who used to minister to oil field workers. He told me what these guys would say when prices were at their highest.

ED MAYBERRY: Oh, Man, it was like, Man, we just came back from vacation in Hawaii, and we spent, you know, weeks there. And life is good. We just bought a new house and just got a new car - just a lot of material stuff.

SHAPIRO: Even with the cars and the vacations, Mayberry says people didn't seem happier overall.

MAYBERRY: Children were raised with dad kind of out the house most of the time, so moms were being overwhelmed and even during the boom.

SHAPIRO: So you're saying even having more money (laughter) - I want to say more money, more problems (laughter).

MAYBERRY: More problems - yeah, absolutely. That's exactly right, yeah. I mean you see guys, men go to work at - I don't know - 3 in the morning and work weeks. There was more problems for sure.

SHAPIRO: He's seen what life is like when the middle class disappears, and it worries him.

MAYBERRY: I think we'll kind of destroy ourselves without the middle class, Man.

SHAPIRO: And at the same time, do you dream of getting out of the middle class even though you say the middle class is really important?

MAYBERRY: Absolutely, yeah, and the reason (laughter) - yeah, that's kind of ironic. But the reason is I think getting out of the middle class, you can tend to help the middle class a little bit more.

SHAPIRO: Mayberry and his wife have raised prices at their daycare center from 300 a month to $400 per kid. There's a waiting list, so they're hoping to move into a bigger space. And he's looking to buy a church where he can minister.

MAYBERRY: It's not to say that I'll be a millionaire next week or next year, but I feel the momentum is coming. And I feel like I'm kind of at the tipping point where all the momentum up until this point is kind of getting ready to tip me over.

SHAPIRO: In some ways, Midland's wild economic swings are nothing like the rest of the country. This boom-bust cycle is pretty extreme, but in other ways, the story of Midland is the story of the U.S. In the last decade, two-thirds of Americans who left middle class went up. They got rich. Only one-third who left the middle class sank down into poverty.

(CROSSTALK)

SHAPIRO: It's lunchtime at the Mulberry Cafe - burgers, soup, sandwiches, wine and beer on tap. The owner is also Midland's mayor, Jerry Morales.

JERRY MORALES: This one opens for breakfast, so I'll come have a cup of coffee, check on them and then go to the other restaurant, work the lunch crowd, shake hands - hello; how are you doing - and then bounce out of there, go do some city work.

SHAPIRO: This is his family's third restaurant in town, the newest. He says running any restaurant or any city can be challenging. But imagine trying to do it when the tax income and the population ricochet all over the place from one year to the next.

MORALES: It's scary. It's - you know, you really get nerve wracked trying to figure out, how are you going to set aside money for road infrastructure, for example, when you get a report from your staff saying 30 percent of your roads are unrepairable? We need 112 million just to catch up that 30 percent and that - including - if we get another boom here in another - a year or maybe less and you have a 13 percent increase in your traffic, you're going to be challenged. You're - that's scary. So you're only going to get further behind.

SHAPIRO: He says as a restaurant owner, sales go up and down about 20 percent depending on the price of oil. Everyone finds creative ways to attract talent. The mayor closed his restaurants on Sundays, offered employees free meals, flexible hours and insurance. Other places offered free shuttles to and from work. But when oil prices fell, everything changed. Thomas Carney got laid off from his job in the oil fields.

THOMAS CARNEY: Well, I got six kids, lived in Midland for going on about 32 years.

SHAPIRO: If three years ago I'd asked you to describe your economic life, what would you say?

CARNEY: It was fun. It was fun - had all my bills paid, had things to do.

SHAPIRO: Last year his oldest daughter went to the Rose Bowl with her school marching band and played the flute in the parade. He wrote the $3,000 check and said, have fun - not this year.

CARNEY: I mean we cut all that out, and everybody's like, Man, that's your kid's stuff. I said, I understand that, and she understands that.

SHAPIRO: He figures he's got about eight more months of savings. He keeps applying for jobs, but nobody's hiring. If oil prices don't go back up soon, he'll leave town.

By mid-afternoon, the Texas sun is blazing. Construction at the new amphitheater on the edge of town has stopped for the hottest hours of the day. The only movement is a pump jack nearby, slowly drawing oil up from the earth. The company building this project is called Barbed Cross Construction. John Dunn is the CEO. He's 35, and about 10 years ago, he started the company doing handyman work by himself.

JOHN DUNN: And we probably did, oh, 150,000 that year me by myself and then to over - we're pushing around 5 million annually now in sales.

SHAPIRO: When he realized he had finally left the middle class for good, he gave his wife and kids a Caribbean cruise. He says compared to other people in Midland, that is downright humble.

DUNN: People spend stupid money around here.

SHAPIRO: (Laughter) What do you mean?

DUNN: I mean stupid money - I mean just the type of stuff. I mean we've done residential remodels where they'll put a half a million dollars in a $400,000 house.

SHAPIRO: It's a cliche to call America the land of opportunity, and to many Americans, it feels like the phrase no longer rings true. But over the course of this day in Midland, opportunity and risk turned up everywhere.

With the sun low in the sky, we drove outside of town to meet Jesse Murillo and his wife, Megan Newman. They met in college at Cornell and moved here to the Texas plains.

JESSE MURILLO: And we first bought this property as nothing. It looked like that.

SHAPIRO: Just field and scrub and...

MEGAN NEWMAN: Which is mesquite bushes and lots of tarantulas like you've seen on your drive in already.

SHAPIRO: (Laughter).

NEWMAN: Yeah, lots of brush and thorny things.

SHAPIRO: They decided to open Out West RV Park and wait for the next boom to hit. Right now about a third of the spaces are full, and they both work second jobs.

NEWMAN: We lived out here for almost three months without water and without electricity...

CORNISH: Seriously.

NEWMAN: ...Living in our RV while we waited for the electric company to finally plug us in. And it was a challenge. You know, it kind of tests your grit.

SHAPIRO: Both of them grew up poor. Megan's mother emigrated from Poland.

NEWMAN: She came over on a boat all by herself. She was 19 years old. How much courage does that take?

SHAPIRO: And Jesse's family has roots in Mexico.

MURILLO: At a certain point, we bounced around from family member to family member. They would feed us dinner because we just didn't have any food. I remember - I'm getting so choked up here. I remember one year our bunk bed broke, and we didn't have enough money to replace it. So we slept on the floor.

SHAPIRO: Now with their Ivy League degrees, they could have gone into banking or consulting, but they wanted to build something of their own. They've already climbed out of poverty to enter the middle class. They hope that with the next boom, they catch a wave that will carry them even higher. Transcript provided by NPR, Copyright NPR.