Oklahoma Economic Overview
Although Oklahoma is a major center for agriculture, oil, and natural gas, it is government, with 332,700 workers, that is the largest employer in the state. Between 2000 and 2006, Oklahoma’s gross state product (GSP) grew almost 11 percent from $122.5 billion to $134.6 billion, ranking it the fastest growing state in the country. Oklahoma's average per capita income is $38,516. On the down side, Oklahomans experience some 50 costly tornadoes annually, one of the highest numbers worldwide. A record-setting tornado in 1999 killed 44 people and caused about $1 billion in damage.
During the first half of the 19th century, the "Five Civilized Tribes" lived in what was known as Indian Territory, engaging in a mainly natural resource-based economy. Migrating from the South, the Native Americans had adopted slavery, which served as a supply of labor for slave-owning Indians.
During much of the 1800s, cattle ranching was a leading industry, and cowboys drove herds of cattle across the western portion of the state. Following the Civil War, there was rapid economic expansion in the eastern part of the state due to railroad construction, the growth of the timber and coal mining industries, and the increased immigration of white settlers.
Shortly after Oklahoma became a state in 1907, oil was discovered, and the city of Tulsa became known as the "oil capital of the world." After around 1910, farming and ranching declined in importance. Employment in agriculture fell from 70 to 37 percent, while trade and technical jobs increased, particularly in petroleum refining, meat packing, and cotton processing. It is estimated that from 1900 to 1919, total personal income grew from $90 million to $1 billion.
The economy thrived until the 1930s, when drought struck and many bankrupt farmers migrated westward. The Great Depression was followed by a recovery due to the boom economy of World War II, which continued through the restructuring of the farm economy in the next decade. In the 1950s, efforts were made to conserve water and soil, and hundreds of man-made lakes and reservoirs were created.
By the 1960s and early 1970s, Oklahoma’s economy had diversified and manufacturing had expanded. Manufacturing employment increased from 65,600 in 1950 to 86,600 in 1960, and some 65,000 new manufacturing jobs were added between 1960 and 1973.
The price of Oklahoma crude oil increased by a factor of 10 between 1972 and 1981, in line with OPEC. Oil continued to play a major role in the economy of the state until the 1980s, when rising OPEC oil prices led to almost 90,000 energy-related jobs being lost. From some 34,000 oil workers in the early 1970s, employment in Oklahoma’s oil industry peaked at 102,000 in 1981 and plummeted to about 40,000 in the late 1980s, as oil prices fell by nearly 50 percent.
Nevertheless, the state's diversified economy weathered the collapse, with nonfarm employment increasing by some 400,000 from 1986 to 2002. Oklahoma's 12.3 percent manufacturing ratio is only slightly lower than the national 14 percent. On the other hand, government employment accounts for about 19 percent of nonfarm jobs in Oklahoma, compared to 15.6 percent for the nation overall.
Some 86,600 farms in Oklahoma provide $5.8 billion worth of crops and livestock. Leading products are cattle and calves, at $3 billion, ranking the state fifth in the country. The state also ranks fifth in the growing of wheat, worth $1 billion annually. Other leading products are poultry and eggs, at around $749 million, and hogs and pigs, at $555 million. Milk and dairy products from cows account for another $191 million. The nursery and greenhouse sector generates $204 million, and other crops and hay bring in $173 million.
BANKING AND FINANCE
There are roughly 250 banking institutions in Oklahoma, with total combined assets of more than $79 billion. The largest concentrations of banks and assets are in Oklahoma City and Tulsa, the biggest cities in the state, where some 60 percent of the population live. Approximately 80,000 people work in financial activities in the state.
Some 50 newspapers are published in Oklahoma, including one in the Cherokee language, and 17 television stations and 218 radio stations broadcast in the state. Oklahoma is served by 65 telephone companies and cooperatives, with Southwestern Bell Telephone Company alone employing almost 4,000 workers.
Oklahoma ranks fifth in the country in amount of annual permits issued for single-family home construction. There are around 75,200 workers employed in the state’s construction industry, down from a high of 77,000 in 2008. Nonresidential spending in Oklahoma accounts for about $6.2 billion yearly and contributes $15 billion to the gross state product.
Roughly 654,500 students are enrolled in Oklahoma’s 1,850 kindergarten, elementary, and secondary public schools. More Native American students are enrolled in schools in this state than anywhere else in the country. Oklahoma ranks 46th in the country in terms of expenditures per student, with an annual average of $7,615, and 42nd in average annual teacher salary, $43,551. Oklahoma State University, with 32,030 students, 1,860 faculty members, and an endowment of $314 million, is the largest university in the state. It is followed by the University of Oklahoma, with 29,930 students, 2,940 faculty members, and an endowment of $848 million.
Some of the country’s largest oil and gas fields are located in this state, with small coal deposits in the eastern part. The industrial sector accounts for the highest consumption of energy. Oklahoma produces around 10 percent of the country’s gas and operates five petroleum refineries. More than half (57 percent) of Oklahoma’s electricity is generated from coal, followed by 37 percent from natural gas, four percent from hydroelectric sources, and the rest from renewable energy. Since the state is ranked eighth in wind energy potential, it is hoped that the development of this sector will reduce the country’s dependence on foreign oil.
Similar to many other states, Oklahoma’s film office offers various incentives to attract filming companies, such as up to 37 percent in rebates on expenditures. There are more than 82 casinos in the state, some of them run by Native Americans, as well as horse racing. Racetrack casinos employ some 1,000 workers and generate gross revenues of more than $92 million. About 58 percent of this is retained by the operators of the casinos, while $13.33 million goes to state and local governments and is mainly used for education.
Almost 19 percent of Oklahoma’s residents lack health insurance. More than 5,500 insurance companies and agents operate in the state, with Oklahoma City having the most, at more than 1,200. In 2008, there were around 10,000 agents and brokers employed in the insurance sector in Oklahoma. Some $5.5 billion of premiums are written annually, with automobile insurance accounting for $2.1 billion. Oklahoma’s Department of Insurance collects roughly $160 million in premium taxes, which helps fund its budget of $12 million, including salaries for its 120 employees, who deal with more than 43,800 complaints and inquiries annually.
Oklahoma has around 6,000 manufacturers, whose nearly 204,600 employees produce some $39 billion worth of goods each year. The largest manufacturing sectors are industrial machinery and equipment (34,571 jobs), fabricated metal products (24,610 jobs), and food products (around 21,600 jobs). Tulsa is the city with the most manufacturing jobs, followed by Oklahoma City. Tire manufacturers Michelin (1,848 employees) and Goodyear are based in this state.
MINING AND EXTRACTION
Around 245 mining operations in Oklahoma provide direct employment for 3,530 miners, at an average annual salary of $44,000, which is around 24 percent higher than the average state wage. Total earnings from mining are $150 million, and some $730 million worth of minerals, metals, and fuel products are extracted annually. Approximately 580 miners produce $40 million worth of coal, while the non-metallic mining sector employs 4,500 miners who extract minerals worth $570 million annually.
There are 22,168 tax exempt/nonprofit organizations in the state of Oklahoma with total assets of $35 billion and income of $25.8 billion. The highest amount of income reported from one of these organizations is $2.6 billion, but the average amount is $3.6 million. Of these organizations, 8,741 are charitable organizations, 3,573 are religious organizations, 3,509 are educational organizations, and the rest are others such as social and welfare organizations.
Roughly 14,000 retail stores do business in Oklahoma, with total sales of $32 billion. Some 168,300 employees work in the sector, at a combined total payroll of $3.1 billion. As in many states in the country, Walmart is a strong presence, with 75 supercenters, 11 discount stores, and 17 neighborhood markets. Around 32,000 employees work in Oklahoma Walmart stores, earning an average hourly wage of $10.91. Walmart collects sales tax of approximately $521.4 million annually and pays more than $33 million in state corporate taxes.
Oklahoma is involved in attracting new high-tech firms to the state in order to boost its economy. To this end, it offers state-funded awards (more than $9.6 million) to finance the commercializing of advanced technology and seed capital funds of $250,000 to $700,000. The sector generates some $130 million in revenues and pays nearly $40 million worth of annual payroll. The average annual salary in technology is $60,000.
The biotechnology and nanotechnology sectors have an annual impact of more than $3.4 billion on the state economy. The Oklahoma Medical Research Foundation, with an annual budget of $40 million and 650 employees, has filed for more than 600 U.S. and international patents for its biomedical products, and the Samuel Roberts Noble Foundation, with more than 360 employees, is the largest private foundation conducting plant science and agricultural research in the nation. The Presbyterian Health Foundation Research Park hosts 25 companies with some 1,000 employees and an annual payroll of $50 million.
Three interstate highways, four auxiliary highways, and 10 turnpikes are part of Oklahoma’s 12,000-mile road system. The largest commercial airport in the state is Will Rogers World Airport in Oklahoma City, which handles about 3.4 million passengers, 14.5 tons of mail, and 33,000 tons of freight annually. Tulsa International Airport services some 3 million passengers annually and is the home base of the 138th Fighter Wing of the Air National Guard. Amtrak provides service to the state, and Oklahoma City and Tulsa run mass transit bus systems.
TRAVEL AND TOURISM
Oklahoma’s tourism industry generates around $5.3 billion annually and provides jobs for almost 72,000 residents, who earn a combined payroll of $1.6 billion. Visitors to Oklahoma County account for $1.8 billion, followed by Tulsa County, with $1.3 billion. Attractions include museums, safaris, mountain bike trails, golf courses, and historic sites with reenactments of famous battles. In addition, rodeos and the Red Earth Festival (the largest Native American festival in the country) also draw visitors.
Advanced Doppler Weather Radar at the University of Oklahoma's Atmospheric Radar Research Center (ARRC)
Oklahoma is home to a growing weather industry, with weather research, weather-related commercial ventures, and education programs for training future leaders in the weather industry. The Oklahoma University School of Meteorology is the largest such program in the country, with almost 300 students, and ranks first in severe storm research. Some 700 employees work in the city of Norman, with 25 of them employed by an office of Weathernews Americas, Inc., the largest publicly traded full-service weather company in the world. The National Weather Center and the Weather Sphere, located on the campus of Oklahoma University, have helped the state become the world’s top atmospheric observatory. The National Weather Center spends around $60 million annually, with an economic impact on the GSP of $100 million. Other weather-related companies, such as Vieux & Associates, Inc., WeatherBank, and Weather Decision Technologies also have their home in the state.