In this essay, Rik Hafer and William Rogers provide insight into what has happened to cause such slow statewide growth. The authors go beyond the standard measure of economic growth, gross domestic product, and examine alternative measures of prosperity such as personal income and job growth. The picture that emerges is complex, but perhaps the most troubling finding—given the connection between an educated workforce and economic growth—is that Missouri consistently struggles to attract college graduates, particularly those with advanced degrees, to the state.

To read the complete essay, click on the link below.

The post The Missing Million: Missouri’s Economic Performance Since the Moon Landing appeared first on Show-Me Institute.

The post Taxes: Hitting Some Missouri Businesses Harder than Others? appeared first on Show-Me Institute.

You might assume that as a red state, Missouri’s corporate income taxes would be low. Since 1993, the top corporate income tax rate for Missouri has been 6.25 percent, currently the fifteenth-lowest in the country. However, a new essay by R.W. Hafer and Howard J. Wall argues that categorizing Missouri as a low-business-tax state isn’t quite that simple.

Drawing on data from the Tax Foundation, Hafer and Wall examine the total tax burden facing businesses, including income, property, sales, and unemployment taxes. They find that the tax burden on a business depends heavily on the type of industry the company is in. Because of different incentives and tax breaks offered to businesses in different industries, the effective tax rates paid by some firms are much higher than what others pay. For example, manufacturers enjoy a relatively hospitable tax environment; retail establishments and distribution centers, not so much.

This uneven distribution of tax burdens might not be harmful if the firms that were taxed the least were those that have the most beneficial effects on the economy. Unfortunately, the opposite seems to be the case. It turns out that the industry Missouri favors (manufacturing) seems to be the one in which low taxes are not related to higher state growth.

It seems (again) as if policymakers are trying to pick winners and losers—and finding out how hard it is to make the right call.

The essay, available at the link below, also explores the different tax burdens faced by companies in the same industry depending on whether they are new or established firms. Hafer and Wall’s findings help explain why our allegedly low-business-tax state has experienced such anemic growth in recent years.

The post Essay: Taxing Business in Missouri appeared first on Show-Me Institute.

Drawing on data from the Tax Foundation, Hafer and Wall examine the total tax burden facing businesses, including income, property, sales, and unemployment taxes. They find that the tax burden on a business depends heavily on the type of industry the company is in. Because of different incentives and tax breaks offered to businesses in different industries, the effective tax rates paid by some firms are much higher than what others pay. For example, manufacturers enjoy a relatively hospitable tax environment; retail establishments and distribution centers, not so much.

This uneven distribution of tax burdens might not be harmful if the firms that were taxed the least were those that have the most beneficial effects on the economy. Unfortunately, the opposite seems to be the case. It turns out that the industry Missouri favors (manufacturing) seems to be the one in which low taxes are not related to higher state growth.

It seems (again) as if policymakers are trying to pick winners and losers—and finding out how hard it is to make the right call.

The essay, available at the link below, also explores the different tax burdens faced by companies in the same industry depending on whether they are new or established firms. Hafer and Wall’s findings help explain why our allegedly low-business-tax state has experienced such anemic growth in recent years.

The post Taxing Business in Missouri appeared first on Show-Me Institute.

Some background: In January 2014 the Mayor of Seattle formed an advisory committee charged with raising the city’s minimum wage. After deliberation, the committee’s plan was forwarded by the Mayor to the Seattle City Council, which approved the proposed changes. The minimum wage thus far has been increased in two phases: from $9.47/hour to as much as $11/hour on April 1, 2015, and from that level to as much as $13/hour on January 1, 2016. Future increases are on tap to eventually increase it to $15/hour.

To evaluate the impact of the minimum wage hike, the city contracted with researchers at the University of Washington’s Evans School of Public Policy & Governance, who used this policy change to test for three effects:

• Do such wage increases affect the number of low-wage jobs?
• Do workers in low-wage jobs face cut backs in hours worked?
• Do workers in low-wage jobs suffer reductions in total earnings?

Using data from across the state, the researchers formed a control or comparison group to which changes in employment conditions in Seattle could be compared. Their control group covered all low-wage jobs—not just jobs in one or two industries (such as the restaurant sector), as is sometimes the case in such studies. So what did they find?

The UW study, which is available here, finds that the first increase, from $9.47 to $11, had relatively minor effects on low-wage job employees. There were small reductions in jobs available, and little change in the total payroll for low-wage jobs.

After the minimum wage was increased to $13/hour, however, things changed for the worse for existing low-wage workers in Seattle. While hourly wages rose slightly, many low-wage employees suffered a sizable reduction (9 percent, on average) in hours worked under the higher minimum wage. The study also found this wage hike reduced overall payroll for low-wage jobs. Following the 2016 increase in the minimum wage, the annual total payroll for low-wage jobs in Seattle declined by over $100 million. This amounts to about a $125 reduction per month for the average low-wage worker.

The loss of earnings among Seattle’s low-wage workers reflects one of the more nefarious (though usually ignored by politicians) aspects of raising minimum wages: Even though hourly wages rise, the decline in hours worked and/or jobs available can lead to a reduction in the total income of those on the lowest rung of the employment ladder. That outcome, which will only get worse as additional increases occur, is just another flaw in what really amounts to a misdirected welfare program.

The post New Study Documents (Again) the Harmful Effects of Raising Minimum Wages appeared first on Show-Me Institute.

A new essay by Gail Heyne Hafer and Rik Hafer explores questions like these by examining data across Missouri counties to track not only economic outcomes but also social behavior in order to see whether different levels of education produce different outcomes at the county level and to inform debate about how educational funding should be allocated across the state.

Click on the link below to read the entire essay.

The post Education, Income, and Social Behavior Across Missouri appeared first on Show-Me Institute.

A new essay by Gail Heyne Hafer and Rik Hafer explores questions like these by examining data across Missouri counties to track not only economic outcomes but also social behavior in order to see whether different levels of education produce different outcomes at the county level and to inform debate about how educational funding should be allocated across the state.

Click on the link below to read the entire essay.

The post Essay: Education, Income, and Social Behavior Across Missouri appeared first on Show-Me Institute.

Why the defeat? As stated in the Post-Dispatch, “opponents to the bill said it was up to the state to better manage the money in its coffers and not expect Missourians to cough up more out of their paychecks.”

Just how much would the average Missourian have coughed up if the tax actually passed? Using national figures, a rough estimate is that the average family—two adults and two driving children—put about 45,000 miles a year on their automobile(s). With a reasonable assumption that the cars used would get 25 miles per gallon, the average family uses about 1,800 gallons of gas a year. The six-cent, one-time increase would increase the family’s annual cost of driving by a paltry $2 a week. So the House’s vote protected the public from a decision about whether to increase our tax burden by less than the cost of a cheap coffee a week.

The case for increasing the fuel tax has been made many times before by Show-me Institute writers. Such a tax increase is a sound method for funding the repair and upkeep of Missouri’s deteriorating highways and bridges. Unlike the ill-conceived sales-tax approach suggested in the past, at least raising the tax on fuel levies the tax on those who actually use state roads.

The inability to raise funds needed by the Missouri Department of Transportation for maintenance and improvements of the state’s roadways will not enhance economic growth in the state. This most recent decision by political leaders is instead likely to solidify Missouri’s position as one of the slowest-growing states in the nation. 

The post Penny Wise and Pound Foolish? appeared first on Show-Me Institute.

The state minimum wage is currently $7.65. In 2015, the City of Saint Louis sought to raise the minimum wage on businesses within its borders. This initial attempt was struck down by a circuit court judge in 2015, but Tuesday’s ruling reversed that decision. As a result, the minimum wage that applies to businesses within Saint Louis proper (not the county or surrounding areas) will rise to $10 this year and $11 in 2018.

Saint Louis businesses will face higher labor costs, putting them at a competitive disadvantage against businesses located just across the city–county boundary. If I were an entrepreneur or business owner unsure of where to locate or expand, this minimum wage increase helped make the decision for me.

Show-Me Institute analysts have written many times about the effects of minimum wages hikes; see here and here for two examples. There are two main effects from this wrongheaded action.

First, and most obvious, raising the minimum wage imposes higher costs on businesses. Some of those businesses simply will not be able to maintain current operations: they will reduce the number of workers they employ, close up shop, or move. Why is it that supporters of the minimum wage hike have so much disdain for small business owners? After all, not every employer is McDonald’s.

Liberals and conservatives alike recognize that increases in the minimum wage will negatively affect exactly those workers for whom proponents claim to be champions; namely, the least skilled, entry level workers whom this higher wage will make even more unemployable. This is perhaps the most pernicious (there’s that word again) effect of all: Of the city’s estimated 69,000 individuals earning less than $11 an hour, how many will lose their jobs or face reduced hours? Can proponents claim success if the number of employed individuals declines by 6, or 600, or 6,000? It is bad policy that claims success on the backs of those made worse off.

And how many of those who are harmed by this latest minimum wage increase will we see interviewed so that the public understands how they were put out of a job by this unwise intervention? My guess is that the answer is zero. Out of sight, out of mind.

Lawmakers and union leaders will now sing their own praises and pat themselves on the back for the “good” they have done—no matter how much harm is done to workers and business owners.

The post Pernicious: St. Louis Goes Forward with Minimum Wage Hike appeared first on Show-Me Institute.

Between January 1 and December 31 of 2016, Atlas reports that 1,062 households left Missouri and 989 households moved in. A similar tale is told using the data from United Van Lines: Of the 4,362 total moves made in 2016, 2,256 were outbound and 2,106 were inbound. Although the numbers are close, it is still true that on net more Missouri households are deciding to leave the state.

The United study is valuable because it breaks down the total number of into reasons for moving, and they disaggregate the data by income and age. In terms of reasons for moving, not surprisingly the vast majority of households move because of jobs. Sixty-two percent of those moving out cited job-related reasons, and 60 percent of those moving into the state did so because of work. The second highest category was “family,” with about 20 percent inbound and outbound choosing that reason for the move.

The income and age characteristics of those moving are more revealing. The table below breaks down of inbound and outbound moves by income (left-hand side of table) and age (right-hand side of table). The data suggest that those in the highest income ranks—incomes exceeding $100,000—were, in 2016, net out-migrants: more left Missouri than moved in. This accords with earlier results: Michael Rathbone and I found that, based on IRS data, those who moved out of Missouri tended to be higher income individuals.

When age is the common denominator, it appears that in-migration in 2016 is concentrated in the younger age groups (those younger than 44). Of those between the ages of 45 and 64, prime wage-earning years according to a New York Federal Reserve study, there was a net migration out of Missouri, however. And for the 65-plus age group, it is essentially a wash: just about as many moving out as moving in.

This 2016 data builds on the prevailing story that Missouri’s residents continue to reveal their preferences and, on net, seek other, more attractive economic environments. 

The post Was It Something We Said? appeared first on Show-Me Institute.

When the BEA announces its real GDP growth rates for states, it uses an “all-industry” value.  This includes both private industries (all economic enterprises owned by individuals or groups) and also the government (which encompasses the purchases of goods and services at all levels/branches of government).  Because the private and public sectors both contribute to total (all-industry) output, this total measure can provide misleading signals on how well the private sector of the economy is doing.  After all, the private sector of the economy is the growth engine for future economic well-being. 

The table below illustrates how total measures don’t always paint the full picture. The table shows the growth rates for three categories: All Industry; Private Industry, and Government.  The data cover the most recent four quarters for which information is available. All growth rates are based on year-over-year comparisons to smooth short-term wiggles in the data. In other words, the growth rate for 2016Q3 is the growth rate from 2015Q3 to 2016Q3, etc.

The data show that government “output” grew in the third quarter but declined in the previous three. This resulted in an all-industry output growth that was lower than that of the private sector, which actually expanded in every quarter shown.  While the all-industry growth rate averaged 1.6 percent over these four quarters, private industry output—excluding government—increased at a faster average rate of 1.9 percent. 

You might be thinking, “But such small differences in growth rates are trivial.”  They are small, but they are not trivial:  Using the average all-industry growth rate, it would take 45 years for the state’s output to double.  The private industry values, in contrast, indicate that income would double in 38 years, a 16 percent reduction.  Surely most of us would prefer our income to grow faster. 

After separating out the effects of government, it appears that the private sector’s output of goods and services expanded at a faster pace than is suggested by the commonly used all-industry measure.  This example shows that including government’s activity can affect our perception of how well the economy is actually doing.

The post Missouri’s Private Sector Expanding appeared first on Show-Me Institute.

Employment in small firms—those with fewer than 20 employees—declined in Missouri following the recession. The U.S. overall eked out a only small increase in this category. For all other firm sizes, employment in Missouri establishments increased at a pace slower than the national average.

Payrolls in Missouri generally rose at a significantly slower rate than in the nation overall. This holds true across all sizes of firms. Only for large firms—those with more than 500 employees—was the increase in payrolls similar in Missouri and the nation.

The post Employment and Payrolls in Missouri Lag Nation appeared first on Show-Me Institute.

The two charts below tell the story. The first chart shows real personal income per capita (hereafter income), measured in 2009 dollars, for Missouri since 1950. In that year income stood at $10,168. By 2015 it had risen to $38,612. That almost-fourfold increase means that individuals today are, on average, much better off than they were in 1950. That’s the good news.

The second chart uses the same data, this time shown using a log scale for income. That means we can look at the slope of the line to better see how fast income has been growing over time. I have picked out what look to me like three fairly distinct stages of decline. The first runs from 1950 through 1979, and is highlighted with a green line. During these three decades Missouri income increased at an annual average rate of about 2.7 percent. The next period runs from 1980 through 1999 and is delineated by the amber line. During this period income in Missouri grew at an average annual rate of less than 2 percent, a notable drop from the previous period. The final stage, shown by the red line, is the period since 1999. So far in this century, income in Missouri has increased at an average rate of just slightly more than 1 percent per year. Income in Missouri today is increasing at about a third of the pace that it did 40 years ago.

If you are not used to thinking about growth rates of income, you might think that such changes are not really important. But they are, and some context shows why.

The slower the growth rate, the longer it takes for income to double. For the first period, that growth rate implies that income would double approximately every 26 years; for the second period the time to double increases to every 37 years; and the current growth rate means that it would take 68 years for income to double. The slower income growth means that it will take much longer for Missourians’ standard of living to increase.

Another way to think about what these growth numbers imply is to ask “What would income be today if the growth slowdown had not occurred?” Recall that income in 2015 was $38,612. Starting with the level of income in 1979, if Missouri's economy had continued to grow as fast as it had from 1950 to 1979, income today would be over $57,000. Or, suppose we use the 1999 level of income, which was $32,524, and ask what it would be in 2015 if income had increased at its slower 1980–1999 rate. The answer is about $44,300. In either case, income today would be appreciably higher that what it has turned out to be. Slower economic growth translates into lower standards of living.

The upshot is that ever-increasing layers of regulations that have impeded business formation, an increasingly complex tax structure that reduced incentives to work or expand businesses and, perhaps most important, a dysfunctional educational system all help explain Missouri’s slowing rate of income growth. If we continue down a current policy path that perpetuates this dismal performance, we will sentence future generations—at least those that choose to stay—to ever-diminishing standards of living.

The post How Low Can We Go? appeared first on Show-Me Institute.

The Show-Me Institute has weighed in on such public projects, from the Stan Span to trolley systems in University City and Kansas City. In each instance we asked, just as you would before taking out that home-improvement loan, whether the projected benefit of the project was greater than the projected costs borne by taxpayers. And even if we make the somewhat dangerous assumption that the costs won’t increase as the project goes on, the answer too often is “no.”

Our conclusions are shared by Harvard economics Professor Edward Glaeser. In a recent article that appeared in the City Journal, Glaeser exposes the fairy tale of infrastructure investment as an economic cure-all. It isn’t that he (or we) believes that well-thought-out investment in roads and bridges is unimportant. Quite the contrary. The problem is that the way in which policymakers decide which project goes forward often leads to costly miscalculations that in the end simply do not deliver the promised improvements.

A couple myths about infrastructure that Glaeser dispels are:

• Infrastructure spending stimulates economic growth. Japan, which spent over $6 trillion on “construction-related public investment” between 1991 and 2008, and has arguably one the world’s best train systems, has not experienced sustained economic growth in over two decades. Will building more highways in areas with little population improve economic conditions in U.S. States? It seems unlikely.
• The public benefits, so funding should be done with general tax revenues. It is a near fact of life that funding a project from afar reduces the discipline needed to make sure it is done in a cost-efficient manner, and—perhaps more importantly—makes it less likely that the project will actually benefit the public (and not just those proposing it). Ill-advised, federally funded projects such as Detroit’s People Mover Monorail and Alaska’s Gravina Bridge (a.k.a. “the bridge to nowhere”) serve as cautionary tales. Spending federal funds on local projects like Kansas City’s trolley system is similarly likely to yield little or no economic benefit.

There is much more to Glaeser’s article, and I cannot do it justice in this space. I think you will agree, after reading his article, that maybe that new road or light rail extension being peddled by the local mayor or city council isn’t as critical to the region’s economic vitality as some might have you think.

The post About That New Home Addition . . . appeared first on Show-Me Institute.

The Bureau of Economic Analysis (BEA) data on personal income across states and metropolitan areas (http://www.bea.gov/newsreleases/regional/rpp/2016/_images/rpp0716.png ) shows that real per-capita personal income for the state of Missouri—personal income adjusted for inflation and measured on a per-person basis—increased at a rate of 2.1 percent in 2014.  That puts Missouri squarely in the middle of the pack, with the 26th-fastest growth among states.  Several neighboring states fared worse: Iowa, Illinois, Kansas, and Nebraska all registered slower growth rates. 

Because the state is a mixture of rural and urban areas, it’s worth asking if this middling record is reflective of all areas in the state?  To answer this question, we use BEA data for metropolitan areas in the country to see how real per-capita personal income grew in Missouri’s metropolitan areas.

The table below lists the name of the metropolitan area (metropolitan statistical area, or MSA as defined by the BEA), each MSA’s growth in real per-capita personal income and the MSA’s national ranking based on that growth rate.  For some perspective, the average growth rate in real per-capita personal income across the 381 MSAs nationwide was 2.04 percent in 2014.  The Hanford-Corcoran, California, MSA had the highest growth rate at 7.5 percent; the Danville, Illinois, MSA the lowest growth rate at -3.1 percent.

From the table we see that real per-capita personal income growth in Missouri’s MSAs lags behind most of the nation’s other metro areas.  Only Springfield and St. Louis are at or above the national average, though Cape Girardeau and Kansas City are close to the average.  Columbia basically saw personal income in 2014 remain at its 2013 level. 

The upshot is that the majority of the MSAs in the country had better personal income growth in 2014 than Missouri’s metro areas.  It might not be wise to look to urban growth to raise the state’s average.

(Source: Bureau of Economic Analysis)

The post Personal Income in Missouri Continues to Lag appeared first on Show-Me Institute.

The recently released National Financial Capability Study (NFCS) indicates that the average individual in the United States is not very financially literate. Based on responses to a six-question quiz on basic financial concepts (take it here), the average adult scored a whopping 3.16 correct answers. Some good news is that adults in Missouri are slightly less financially illiterate: We answered an average of 3.25 questions correct.

The financial literacy quiz is designed to see how well adults understand basic financial relationships, such as the role that interest rates play in making savings decisions, how interest rates and inflation are related, and how mortgage payments work. As pointed out in the Council for Economic Education’s 2016 “Survey of the States, not knowing how your money grows when put into savings increases the chances that you will not save enough for the future. And if you do not know the relationship between interest rates and inflation, you are more likely to make poor investment decisions that could cost you dearly in the long run.

Studies find that financial literacy education outside the home improves scoring on the quiz. In Missouri, unlike many other states, K-12 students are exposed to personal finance education, especially in high school coursework. While the most recent results indicate a lot of ground to make up in financial literacy, at least Missouri is headed down the correct path.

If you are curious how Missouri’s score compare to others, the table below reports the survey results for the nation, Missouri, and its neighboring states. Though most of the scores are pretty close (and low), Missouri did better than the national average and five of its neighbors.

Results of 2015 Financial Literacy Quiz

Source: National Financial Capability Study.

The post Financial Literacy in Missouri Needs Improvement appeared first on Show-Me Institute.

After comparing more than 60 measures across states, all from publicly available data, CNBC put Missouri at a mediocre 31st in 2016. This is down five notches from its 2015 position of 26th. (Utah gained the top spot; a complete listing is available at http://www.cnbc.com/2016/07/12/americas-top-states-for-business-2016-the-list-and-ranking.html.)

Where a state lands in CNBC’s annual ranking may not be that important. But if that state is headed in the wrong direction or seems mired in the lower tiers, that could well signal that something is amiss. The table below reports Missouri’s overall rankings in the CNBC study since 2012. In all five years Missouri has had a middling outcome, though its 2016 showing is the worst. And the last three years show a downward trend.

The table also shows the areas where Missouri did its best and worst since 2012. The state has done well in the areas of “cost of doing business” and “infrastructure.” The former category looks at a state’s tax climate and government incentives to lower costs of doing business. This is a double-edged sword: Providing companies with corporate welfare may lower costs of doing business but it also impairs market forces. Infrastructure focuses on transportation: lower commuting times, the value of shipments by air, water and land, and the quality of roads and bridges improve a state’s score in this category.

On the negative side, Missouri often ranked nearly dead last when it comes to “work force” and “quality of life.” Workforce captures the education of the workforce, the ability to retain and attract workers, and workforce productivity. Quality of life encompasses factors like crime rates, quality of health care, and overall population health. While some measures included in quality of life are based on subjective survey responses (e.g., local attractions) most of this category gets to the idea that when businesses plan to relocate, there are noneconomic aspects at work.

Even though state boosters may discount CNBC’s ranking, consider the fact that three of Missouri’s neighbors—Iowa, Kansas, and Nebraska—attained a higher overall rank than Missouri every year since 2012. Suppose their promoters will use this information to our disadvantage?

The post Missouri Drops in CNBC Ranking appeared first on Show-Me Institute.

To illustrate the education–income relationship we use scatter plots, reproduced below. Each dot represents a county in Missouri. Let us explain how each county is located in the plot. Each county’s value (income or education) is measured relative to the state average. If a county’s median income is equal to the state average, its median income value in the plot is 1.0. If the county’s median income is less than the state average, its median income value is less than 1.0; if it is greater than the state average, its value is larger than 1.0. A similar technique is used to measure educational attainment across counties. The combination of a county’s relative median income and relative educational attainment value locates it on the scatter plot. If a county is just like the state average on both measures, it would be located at the intersection of the black lines. The vertical axis is county median family income relative to the state average in 2015. The horizontal axis is one of two education measures in 1990, again relative to the state average.

Two measures of educational attainment are used. In the top scatter plot, education is measured as the percent of adults with no high school diploma: In effect, someone who got no more than a high school education. In the second panel educational attainment is measured by adults in each county who graduated from high school and obtained some college. “Some college” is two or fewer years, which can occur at a four-year college, community college, or at technical school. By comparing the outcomes using these two education measures, what we are asking is whether counties that have more adults with educational beyond high school in 1990 are counties that generally have higher median family incomes in 2015. Does education matter for future income?

Comparing current median family incomes across these two educational outcomes shows that the average county with a higher proportion of adults who in 1990 did not finish high school (upper panel) is likely to have a lower median income today relative to the state. That relationship flips when education is extended to include some college (lower panel). The positive slant of the dots in the lower panel means that if in 1990 a county had a higher proportion of adults who had obtained some college training it is more likely that in 2015 median family income in that county is higher than the state average.

The relationships illustrated below support for policies aimed at raising educational attainment. Completing high school is important. It may be even more important economically to extend that preparation to include some post-high school training. At a minimum, policymakers should understand the positive long-term implications of funding post-secondary education.

Note: Each dot represents a Missouri county. The axes compare county values to the state average. If a county’s median income is equal to the state average, its median income value is 1.0. If the county’s median income is less than the state average, its median income value is less than 1.0; if it is greater than the state average, its value is larger than 1.0. A similar technique is used to measure educational attainment across counties. The combination of a county’s relative median income and relative educational attainment value locates it on the scatter plot.

The post Why Education Matters appeared first on Show-Me Institute.

The Bureau of Labor Statistics’ monthly release of employment data revealed that there has been meager growth in Missouri jobs over the past year. Between May 2015 and May 2016 there was an increase of about 24,000 jobs, or less than a one-percent increase. Is this slow increase a recent phenomenon or something more persistent?

The chart above plots total non-farm employment since 1990 for both Missouri and the United States. To make the two series comparable, each is indexed to their January 1990 values. The two lines show that jobs in Missouri and the nation both react to changes in economic activity. They both expanded during the economic boom of 1992. Conversely, employment fell during the recession that occurred in 1991, and during the so-called Great Recession, which lasted from 2007 through 2009, employment dropped significantly.

What makes the chart interesting is the fact that while Missouri’s job growth kept pace with the nation for most of the 1990s, it has lagged far behind since then. From the beginning of 2000 to the beginning of 2016, employment at the national level increased by about 9 percent. Missouri, in contrast, has seen employment increase by less than 2 percent. And while the nation has rebounded from the Great Recession with employment higher now than what it was in 2007, total employment in Missouri has changed very little.

To answer the question posed above, Missouri’s lack of job growth is a persistent phenomenon, one lasting well over the past decade. 

The post Missouri’s Weak Employment Mirrors Weak Economic Growth appeared first on Show-Me Institute.

The fact that Missouri’s economy is expanding at a much slower rate than the national economy is not new. To compare the pace of economic activity in Missouri and the United States over time, the chart above tracks the levels of output (real gross state and domestic product, respectively) over the past 20 years. So that the two series are comparable, each is indexed to its 1997 value.

The chart below shows that by 2015, output of the U.S. economy was about 50 percent higher than it was in 1997. In Missouri, however, output in 2015 was only about 20 percent higher. Not only did Missouri not expand as fast as the U.S. economy prior to the Great Recession of 2007–2009, but it also has not recovered nearly as much. Since 2010, the U.S. economy has grown by about 11 percent. Over this same period Missouri’s economy is just a little over three percent larger.

Missouri’s slow growth has many consequences, such as diminished opportunity for new jobs and a business environment that is not conducive to new start-up firms. The situation also has many causes, some of which stem from policy decisions, such as those related to taxes and education. The fact that Missouri is falling further behind should create some urgency in discovering causes and exploring some possible solutions.

The post Missouri’s Recent Slow Growth Continues Trend appeared first on Show-Me Institute.