Should we be happy about gas?
As we have all noticed, the price of gasoline has been plummeting. No doubt everyone has been enjoying a little bit of extra change in their pockets to spend elsewhere, but the problem in question is the impact oil prices have on the economy.
The stock market is not joining in our celebration of lower gas prices; in fact, brokers are appalled.
However, stock brokers are not focusing on the general population. They are, of course, focusing on big business energy firms whose stock shares have plummeted.
Many companies are experiencing layoffs, spending cuts and a decline in use of oil rigs. So what, right? The big man can take a hit. What does it really matter to us?
The problem is that this not only affects the oil companies, but the people working for them as well. Thousands of people have been put out of their jobs. This is a problem because nearly a million US workers are currently employed by the oil industry, but with this trend how many will still have jobs?
Although it seems that the negative impacts are much steeper than anything positive, that is not the case. I believe that the winners outweigh the losers in this situation. The main, and only, losers here are the oil industry and its employees.
Even though people might be getting laid off, the drop in oil prices is adding to the growth of open jobs in other markets.
With more money, people are investing their money in other things, which leads to a stronger demand that may require businesses to open more jobs.
The New York Times reported that the average American household is saving $750 annually with the drop in prices, and people who depend on heating oil and propane for their homes are projected to save another $750.
For students, it means we can have a little more pocket cash for things like paying off bills, a night on the town, going to the movies with friends, and dining out.
The price drop benefits many working-class people, retirees, and it seems to disproportionately help lower-income groups. However, businesses are being affected in a positive way as well.
The New York Times states that the auto industry is projected to reach sales of 17 million this year; sales have not been that high since 2005.
This increase in auto sales will lead to a boost in manufacturing jobs.
Although there are some negative consequences to the sudden drop in oil pricing, the positive outweighs and counteracts many of them.
So, next time you’re at the pump, rejoice all you want and revel in it while it lasts.