Valeria Tokun Haga/THE RIDER
As new investments come to the region, the idea of the economic impact can be a question or concern for some residents on how their lives will be affected or benefited.
Gautam Hazarika, an economics professor and chair of the Department of Economics at UTRGV, said the companies that come to the area can help in job creation and economic development.
“So, with companies like SpaceX coming to the region, according to the company’s own figures, something like 50,000 jobs [are] created in the area,” Hazarika said.
He said the job creation in the region adds up as a multiplier effect in the local economy.
“Let’s say, when they hire an engineer who comes and lives here, well, the engineer spends his salary in the region,” Hazarika said. “He buys his groceries, and he buys a car, and things like that, so local business get a boost from that increased demand.”
He said companies such as SpaceX, Rio Grande LNG and America First Refinery, create a positive impact in the region, but have negative effects and cause concerns due to environmental impacts.
“As you have new industries coming in, they create pollution, and that can negatively impact fragile ecosystems and our ecosystem here is quite fragile,” Hazarika said.
He said the negative aspects essentially come from the question of how inclusive the development process is.
“In other words, is everyone going to benefit? Because society is made up of rich, skilled people and less skilled, poor people,” Hazarika said.
He said the Valley is one of the poorest regions in the U.S. and some people are “not very well” educated.
“So, is this development going to take them along?” Hazarika said. “Include them? If it does not include them, then it could be quite bad for them, because with home values going up, these people will be less able to afford to buy a home.”
Valeria Tokun Haga/THE RIDER
He added residents may face rising taxes, home values and rent.
Hazarika said this type of impact on the economy can lead to gentrification that happens when the poor in a region are being priced out of the market and having them need to leave.
“So gentrification has happened in cities like San Francisco, for example,” he said. “Right now property prices are just so high in San Francisco, which is why you have this huge problem of homeless people in the city of San Francisco. So, we don’t want something like that happening in the RGV.”
Hazarika added the economic development of a city should benefit everybody and the way to do this is through education.
“We have to make sure that our school prepares the local population, the young people, to prepare them for these newer opportunities that are coming because these opportunities that are coming can only be grabbed by people who have skills,” he said.
The Rider tried to contact Jerry Briones, executive vice president for the Greater Brownsville Economic Development Corporation for comment on the economic impact that may come with the growth of Brownsville. As of press time, he was unavailable.
Emiliano Mendez, a biomedical science sophomore, said he thinks when big companies come over, it hinders the smaller companies in the area and has a “negative impact” on the local region.
He added he thinks when companies come, the community seems to benefit from the creation of jobs.
Axel Rodriguez, a psychology junior, said he thinks the economy of a city can be “better” when big companies arrive.
“But at the same time, it could also affect our economy by raising taxes or just overall inflation,” Rodriguez said. “The prices of things would go higher.”
