Patrick Jankowski, senior vice president of research with the Greater Houston Partnership, discussed his preliminary projections about how the storm affected the region’s economy in a presentation to partnership members Feb. 25.
“It's been a rough year for us economically; it's been a rough year for us public health wise. It's just been a rough year for us psychologically—first the coronavirus and then the freeze,” he said.
Economists at AccuWeather estimated the storm had a nationwide impact of $50 billion, including lost wages, damages, government cleanup efforts and other economic losses.
While it is still too soon to fully assess the event’s effects, Jankowski said Houston’s economic production amounts to about $1 billion in an average week.
He also clarified the storm, which shut down the local economy due to icy conditions, lost power and water issues, did not cause as much damage as Hurricane Harvey. The 2017 tropical storm damaged about 100,000 homes to unlivable conditions, and about 300,000 vehicles were destroyed, he said.
“One thing I do know is the impact of this storm fell heaviest on those people ... who could least afford it, and those tend to be the employees that were paid by the hour,” he said.
This includes about 59% of U.S. workers, or roughly 1.8 million Houstonians. Jankowski said on average, these individuals are being paid $14 an hour, which in a 40-hour work week adds up to a $560 paycheck that may never be recovered. Additionally, 700,000 Houston households are classified as ALICE workers, which stands for asset limited, income constrained and employed.
“I imagine for many of those, that’s their grocery budget for a week, or that’s what they spend on day care, or maybe that’s half a month’s rent payment,” Jankowski said.
Salaried professionals may not have been able to work even from home with no power or internet, but Jankowski said most still got paid despite falling behind on projects or having to cancel client meetings.
Those who lost power likely lost between $100-$300 in groceries, he said. Homeowners who had damages may be paying plumbers up to $175 an hour for repairs, and a drywall patching project could cost as much as $800, according to Jankowski’s research.
When it comes to the economy, the weather forced flight cancellations; restaurant and retail closures; lost production at factories and petrochemical plants; losses and delays in the supply chain; and consequences at hospitals, hotels and grocers due to power outages.
Another outcome of the freeze was a delay in COVID-19 vaccine rollout—a process which Jankowski said long-term economic recovery depends on.
The Houston metro is still down about 181,700 jobs since the start of the pandemic, and Jankowski said it would take at least two years to recover them even in a healthy economy.
He said he expects the region to begin approaching herd immunity this summer. At this point, the economy will reopen further, and pent-up demand will be released as people begin traveling and eating out again.
“We should be able to recover from this recession quicker than the Great Recession because the Great Recession was caused by financial collapse. This recession was caused by government mandate that we all stay home,” Jankowski said.