As I wrote about a few weeks ago, Missouri is also facing a demographic decline. Recent college graduates or businesses looking to relocate will be more likely to choose a state with a promising economic outlook. When I wrote about demographic decline in St. Louis, I mentioned that Austin, Texas, and Orlando, Florida, have experienced substantial growth. One likely reason for these cities’ success in attracting new residents is their lack of a local or state income tax, which serves as an incentive for businesses and individuals to move to those cities.

So what can policymakers do? Show-Me Institute analysts have written extensively about the benefits that an income-tax cut could have for Missouri. States such as Texas, Florida, and Tennessee have cut their income tax to zero and also consistently fare well in ALEC’s economic outlook and performance rankings.

While Missouri has made incremental progress on cutting taxes, we still lag behind the true national leaders. This year’s legislative session is almost over, and so far we haven’t seen any significant tax reforms become law. Lowering taxes could help both our economic and demographic woes. But we need more urgency from our elected officials on this issue, or Missouri will only continue to fall further behind.

The post Two Birds, One Stone: Could an Income Tax Cut Help Missouri Reverse Two Declines? appeared first on Show-Me Institute.

For this reason, I was surprised when I found out that only a small number of my St. Louis high school friends planned to move back home after college. I experienced a similar shock when I heard the recent Show-Me Institute podcast episode with Susan Pendergrass and Dr. Ness Sandoval. In that episode, Dr. Sandoval lays out the bleak fact that there are more people dying than people being born in the St. Louis region right now. We could rationalize this as a reflection of the overall birth rate decrease in the United States, but the data show that many U.S. cities, such as Austin and Orlando, do not face the same demographic decline.

The natural question to ask is: what is St. Louis doing wrong? Or, perhaps, what are these other cities doing right?

For one, most cities do not face the safety issue that St. Louis does. Every year, St. Louis fiercely competes against New Orleans, Detroit, and Baltimore for the title of “the murder capital of America.” This fact almost certainly contributes to St. Louis’s demographic decline. Who would willingly choose to move to the murder capital of America?

What many outsiders don’t realize is that the City of St. Louis is an independent municipality separate from St. Louis County. In 2020, the City of St. Louis had 300,528 residents and 263 homicides. That is a murder rate of 87 per 100,000 people. Meanwhile, St. Louis County had 1,004,125 residents in 2020 and a murder rate of 12 per 100,000 people. When news sources dub St. Louis as the #1 (or as of September, #2) murder capital of America, they are referring to the City of St. Louis, not the St. Louis region. Unfortunately, many outsiders don’t know this and the whole region suffers as a result.

John Boyd, a business relocation specialist, recently spoke about the impact crime has on a company’s decision to move: “One of the big reasons you see migration from California, New York and Philadelphia is not just high taxes, but crime statistics. St. Louis hasn’t enjoyed the type of growth Kansas City has in recent years, and crime is a big reason why.” Boyd continues, saying that companies are “not merely looking at crime statistics but how crime is and isn’t being prosecuted.” This idea is particularly relevant to St. Louis. Kim Gardner, the circuit attorney for the City of St. Louis, has faced a lot of criticism recently for the way she has handled crime.

If companies choose to relocate from St. Louis or don’t view St. Louis as an attractive relocation destination, job opportunities will be more scarce and fewer college graduates will see St. Louis as an attractive job market. That’s why it’s hard to blame my friends for choosing another city over St. Louis for their first job out of college.

While St. Louis could do a better marketing job of clearing up the perception issue and highlighting all its attractive features for new college graduates, the safety issues need to be addressed and prioritized. All the marketing in the world cannot change the reality of St. Louis City’s worrisome crime patterns.

The post The St. Louis Demographic Decline: One Explanation Among Many appeared first on Show-Me Institute.

A few months ago, the Archdiocese of St. Louis announced the closing of two high schools in the fall, citing a lack of funds to remain open. Being very fond of the education these schools provide, students, parents, and alumni rallied together to save their schools and were able to secure the funding needed to remain open, independent of the archdiocese.

The closing of a school is almost always heartbreaking news that nobody wants to hear. However, I do believe that school closures shed light on an important principle that is (in some cases) being enforced: students deserve to go to high-quality schools, and only those schools that offer the best value and fulfill their students’ needs will survive.

Through market forces, this happens organically at a private school—parents will not pay to send their kids to a school that isn’t meeting their academic or social needs. If enrollment declines sufficiently, the school will eventually see no other option but to close. Charter schools also face closures, as schools that aren’t performing well will likely experience declining enrollment and will not continue to receive funding from the state. Because of the possibility of closure, private and charter schools have an incentive to improve academically and fulfill the needs of students.

Traditional public schools, on the other hand, have very little incentive to improve academically. Unless the situation becomes truly dire, public schools continue to receive funding despite their failures, and many students are left behind in the process.

Show-Me Institute analysts recently developed a piece of model legislation that would help address the incentive problem for public schools by allowing parents to send their kids to any public school in the state. Creating a true marketplace in education is one of the best ways to ensure our schools improve and kids in Missouri get the best education possible.

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Under this new open enrollment program, Missouri school districts that choose to participate could receive transfer students from any public school in the state. While this bill would put Missouri on the path to education choice, policymakers could do a lot more to provide students with greater interdistrict choice by making district participation in the program mandatory. Not only would a mandatory program give parents and students a much greater number of educational opportunities, but it would also increase competition among schools and districts, which would lead to higher-quality schools that better serve the needs of students.

Director of Education Policy Susan Pendergrass created model legislation for what we are calling the High-quality Interdistrict Choice Act to demonstrate what a mandatory open enrollment program would look like. If implemented, such legislation could make Missouri a national leader in school choice rankings.

The post The High-quality Interdistrict Choice Act appeared first on Show-Me Institute.

Welfare programs often create perverse incentives regarding work; recipients don’t look for jobs due to the risk of reaching a level of income that would cause them to lose access to the welfare program. Because of this problem, welfare programs can exacerbate the poverty problem they are intended to fix.

Politicians have floated the idea of a universal basic income (UBI) many times as an antidote to the incentive problems welfare programs tend to create. Andrew Yang made it a prominent plank in his 2020 presidential campaign, promising to give out $1,000 per month to every American adult if elected. Since UBI offers every single person (rich and poor alike) a certain amount of money per month, no strings attached, its proponents argue that it wouldn’t create an incentive against working.

Some free-market economists have argued that the replacement of welfare programs with UBI could reduce the bureaucratic power of government—the state would have less of a say over how people choose to live or spend their money. Charles Murray emphasized replacement as a key feature of UBI implementation:

The first rule is that the basic guaranteed income has to replace everything else — it’s not an add-on. So there’s no more food stamps; there’s no more Medicaid; you just go down the whole list. None of that’s left. The government gives money; other human needs are dealt with by other human beings in the neighborhood, in the community, in the organizations.

For UBI to serve as a tool that helps low-income individuals while increasing government transparency and decreasing state paternalism, it must be accompanied by a complete overhaul of how the welfare state currently functions.

The proposal put forward by the City of St. Louis disregards all of the wisdom stated above. First, the incentive problem that UBI tries to address is mostly ignored in the guaranteed basic income (GBI) program. Recipients of the “free” money must fall at or below a certain mark of the poverty level, which could create an incentive against working. Second, the proposed GBI program would not replace other social welfare programs. A spokesman for Mayor Jones expressed that one of the administration’s priorities is to ensure that the GBI program does not force its recipients off other government benefits, such as food stamps, for fear that it “might leave residents worse off.” In other words, Mayor Jones is not looking to reform the current welfare programs in St. Louis—she is hoping to establish another one.

Additionally, this proposal does not address concerns about the future sustainability of such a program. Mayor Jones proposes using money the city received from the federal government in pandemic aid to pay for the program. Once the $5 million is handed out, how does the city plan to keep funding this program?

If the mayor really wants to help low-income individuals, how about using the $5 million to improve the bus system that has seen massive service cuts in recent years? The reductions in bus lines have negatively affected many low-income individuals who rely on buses to get around St. Louis.

In any case, countless problems accompany the program Mayor Jones proposes. As tends to be the case in public policy, closer attention to incentives and to future financial viability could help the City of St. Louis craft proposals that would better serve the poor of St. Louis.

The post Welfare Reform or Welfare Expansion? appeared first on Show-Me Institute.

The FDA decision to loosen regulations has allowed a new market for OTC hearing aids to surface. As tends to happen when the free market is allowed to function, brands now have to compete for the customer if they want to succeed, which leads to much more affordable and better-quality products.

According to the National Institutes of Health (NIH), approximately one in three people between the ages of 65 and 74 and nearly half of adults over 75 suffer from some sort of hearing loss. It’s likely many people don’t want to admit they have trouble hearing and go through the hassle of visiting a specialist, so they don’t take any action to improve their hearing. Hopefully, this increased accessibility of hearing-loss solutions will prompt more Americans to do so. While this is a great step forward in enabling access to hearing aids for the millions of Americans who have mild to moderate hearing loss, those with severe hearing loss still have many barriers, including high costs, to overcome.

To become a hearing-aid specialist in Missouri, a degree in hearing instrument sciences is not enough. A Missouri law requires those who would like to become hearing-aid specialists to obtain and consistently renew a special license that allows them to diagnose, prescribe, and fit people with hearing aids. These sorts of occupational licenses in theory mitigate risks and improve overall quality of services, but they tend to hurt more than they help. A Princeton study demonstrated that even in health-related occupations, “such as dental hygienists, nurse practitioners and opticians . . . licensing restrictions raise the cost of services without improving quality.” The hearing-aid examiner license required by Missouri raises the educational costs and creates barriers for those seeking to become specialists in the field, and in turn likely results in higher healthcare costs for Missourians who need to visit a specialist to obtain their hearing aids.

Kudos to the federal government (something you don’t often hear Show-Me Institute analysts say) for removing an unnecessary healthcare regulation and making hearing aids more affordable and accessible for older Americans. If Missouri wants to help its residents receive more affordable and accessible care, it may want to consider doing the same.

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