So, Is Missouri Really Falling Behind?
That question is asked a lot these days. The answer really depends on which figures are examined. If one looks at Missouri’s April unemployment rate (the latest figure from the Bureau of Labor Statistics), Missouri’s 7.3 percent looks pretty good compared to the country’s unemployment rate of 8.1 percent. Yet Missouri’s total economy actually shrank from 2010 to 2011. The value of all the goods and services produced in Missouri was a billion dollars less than the previous year. Total employment (that is, the total number of people actually working) also declined. Based on the weight of the evidence, Missouri is falling behind.
Considering this, it is pretty fair to say that there is considerable room to improve Missouri’s economic performance. For example, people on both sides of the aisle have called for tax credit reform. My colleague Patrick Ishmael and I have called for eliminating Missouri’s corporate income tax and making up the lost revenue with the elimination of economic development tax credits. Despite calls in the legislature for reform, the status quo remains.
It is easy to understand why different people have differing views on Missouri’s economic performance. However, the weight of the evidence supports the contention that Missouri is under-performing. Eliminating the corporate income tax is one way to make things better. State officials can do other things to improve as well (such as reforming occupational licensing).