THE ST. LOUIS ECONOMY IN THE 1990S
A PRODUCT OF DECENTRALIZATION AND RESTRUCTURING
by David Laslo, Ph.D., St. Louis Planning and Design Agency, and Donald Phares, Ph.D., University of Missouri

Although the 1990s have been kinder economic times for the City of St. Louis than the previous three decades, the central theme of any analysis is still one of population and job loss. While these trends have long been recognized and recounted over the years, they still represent the most salient feature of the economy and as such must be factored into any contemporary analysis. Entering the next century, the economy of St. Louis continues to transition from manufacturing to services, with the service sector now heavily represented by health, educational and communications and technology activities. The losses in population and total jobs have been mitigated in the most recent decade by a robust national economy that has seen a growing proportion of local earnings produced in these service and communications industries. In general, St. Louis has garnered a share of the recent economic growth that has helped lessen the impact of jobs and population decentralization.

Despite its continued losses in population and jobs, St. Louis is the site of many economic strengths and future opportunities. Its central location, which has always been its primary natural advantage, continues to provide these opportunities and strengths. As the location of the most concentrated employment center and the geographic locus of the region, the City of St. Louis remains one of the single most significant economic components of the greater regional economy, in spite of its continued losses. And because of its central business district, it remains the focal point of the region’s image and along with the Arch, the most commonly projected image to the nation and the world. Although modest by most large city standards, such as New York and Chicago, the St. Louis skyline and the economic activity that it represents, is a significant purveyor of the image of local economic prosperity. This image, as it has become in all cities, is significant for its intangible ability to attract capital and other import resources.

This essay will examine the economy of the City of St. Louis by first looking at the trends of population decentralization and economic restructuring and how they have effected St. Louis and how that compares with the changes it has imposed on other center cities. Placing the City of St. Louis in the context of the national trends of decentralization and restructuring will provide a picture of the City’s condition relative to cities in similar economic circumstances. This essay then looks at the St. Louis economy during the 1990s, focusing on its relative position within the regional economy. This includes looking at trends in employment, business establishments, personal income and earnings. It also includes a brief examination of the City’s fiscal condition. The essay concludes with suggestions on the prospects of future development.

OVERVIEW: THE POST WAR PERIOD TO THE 1990S

The story of the St. Louis economy is a familiar tale that finds its roots in the population decentralization and economic restructuring that began in the decade immediately following the Second World War. Causes for the population decentralization have been attributed to events ranging from a general rise in national prosperity and affluence to the building of the interstate highways to the passage of national legislation encouraging home building and homeownership. The Servicemen’s Readjustment Act (or G.I. Bill) and an amendment to the Federal Housing Act of 1934, greatly expanded the amount of loans that banks could originate, and essentially created housing mortgage insurance that made it cheaper to own a new home than to rent an old one. Collectively, these events helped build the infrastructure for the newly designed tract housing that a generation of returning servicemen could then now afford because of the generous national-based benefits.

The restructuring of the economy began a decade or so later, but once underway, began an on-going transformation of an economy based on heavy manufacturing processes to one based on producer services and new light manufacturing processes. The factory-based Industrial Age gave way grudgingly and generally with considerable local economic pain to an economy based on tall, glass office buildings and expansive, low rise manufacturing structures. Cities like St. Louis that had become centers for mass-produced durable goods and the material to assemble them, such as steel, autos, other consumer goods (notably garments and food products), and defense products, soon found themselves looking for a new role or “niche” in a new “global economy”. Manufacturing jobs, which often paid the best and were coveted by local development officials, rapidly disappeared, replaced by white collar and professional occupations in a wide range of business, education, and health services. St. Louis, like many cities across the country, saw many of its jobs migrate to suburban locations, disappear altogether, or, by the 1980s, begin a migration to the southern and western regions of the nation that became known as the Sunbelt. Prior to 1980, St. Louis because of its central location, remained a manufacturing and wholesale distribution center.

Between 1950 to 1980 St. Louis was home to notable industrial aggregations in banking, chemicals, food and beverage products, garments, and auto assembly. In the late 1970s, St. Louis was also home to thirty companies with more than $100 million in sales. Of those, 12 had sales of more than $1 billion. Companies like Monsanto and Anheuser Busch were not only among the largest in the region in terms of sales, but in the nation as well. Likewise, 24 out of 25 of the nation’s largest American companies had operations, offices, or plants in the metropolitan area, with most being in St. Louis. Two hundred ninety-six (296) of the Fortune 500 companies in the 1970s were in the St. Louis region in some capacity. The economy of the region was believed to be widely diversified with 15 manufacturing industries employing 10,000 or more in 3,300 plants. But St. Louis, in reality, was less diversified because of its large auto assembly sector. The restructuring of the automobile industry and the changes that it imposed on the St. Louis economy during the 1970s and 1980s was symbolic of the greater manufacturing to services shift that was occurring in the national economy.

[ Table B3-1, EMPLOYMENT COMPOSITION: USA, MSA, CITY OF ST. LOUIS, AND MSA-CITY ]

In 1951, goods producing activities in St. Louis mirrored the nation with 51.1% of total employment engaged in these activities compared to 51.3% that were employed in those industries in the nation. However, by the 1960s, employment in those sectors had dropped to 39.6% for St. Louis and 44.0% for the region. By the time the General Motors (GM) auto assembly plant in North St. Louis closed and moved to Wentzville in 1980, employment in goods producing industries in St. Louis had fallen to 34.8%, a proportion almost identical to the nation’s 34.9%. As recently as the late 1970s, St. Louis and its metropolitan region were second only to Detroit in terms of automobile assembly activities. The transformation of the national (and world) economies was well underway by the 1970s and in industries like auto assembly, significant events such as the energy crisis, the weakness of the Chrysler Corp. and the retooling of the manufacturing process that occurred in companies such as GM, served only to accelerate the often painful process locally.

Other changes in the St. Louis economy during the 1950-80 period could also be seen in activities such as wholesale distribution and light manufacturing. Once considered a “jewel in the economic crown”, the trucking industry fell from being second in the nation in the 1950s to seventh by the 1970s. Light manufacturing processes such as the garment and shoe manufacturing industries also moved to suburban and out state locations by the 1970s. The 1970s were a particularly harsh economic period for the St. Louis economy with employment growth rates declining 2.6% annually between 1969 and 1980, a sharp increase over the 0.5% annual average decline experienced during the 1951-69 period. During the same periods, non-City areas of the region grew at a robust rate of 7.7% annually between 1951 and 1969 and 4.9% annually between 1969 and 1980, outpacing the nation, which grew at 2.7% between 1951-69 and 3.0% between 1969-80. By 1989, the proportion of St. Louis employment in manufacturing and goods producing activities had fallen to 23.9%, down from its 1951 share of 48.9%. Further evidence of the restructuring and decentralization of jobs can be seen in the proportion of St. Louis employment relative to the region which was 71.5% in 1951, but had fallen to 49.0% in 1969 and to 23.7% in 1989. In nominal terms, goods producing and manufacturing employment in 1951 were 204,624 and 187,338 respectively, but by 1989, St. Louis employment in these industries had fallen to 57,679 and 48,923. The greatest declines occurring between 1974-80 (28%) and 1980-89 (24%).

[ Table B3-2, AVERAGE ANNUAL EMPLOYMENT GROWTH RATES ]

[ Table B3-3, Comparison of MSA and City of St. Louis Employment in City ]

[ Table B3-4.1, City of St. Louis Employment by Industrial Sector 1951-1993 ]

[ TABLE B3-4.2, PERCENT CHANGE IN EMPLOYMENT BY INDUSTRY SECTOR 1951-1993 ]

Population decentralization during the 1950-1990 period mirrored the migration of jobs and the restructuring of the St. Louis economy. Whether workers moved to follow jobs or jobs followed housing construction in suburban and exurban locations, the end result has been an annual average population loss of 1.3%. During the same period, non-city locations experienced a 3.7% average annual population increase, outpacing the nation’s rate of 1.1%. As with the significant average annual rates of employment loss during the 1970s, St. Louis’ greatest population losses were also during that decade, with an annual average rate of decline of 2.7%. This compares with loss rates of 1.3% between 1950-70 and 1.2% between 1980-90. As the majority of the out-migrants have been households with middle to upper incomes, higher educational attainments, and greater labor force skills, the net result of this population decentralization has been a rising proportion of persons of low income and low jobs skills and educational attainment. As the number of low skill industries and occupations continues to diminish, a large proportion of St. Louis’ population will continue to have difficulty finding higher wage employment. This has been reflected in unemployment rates that are at least double those for the region. In the section that follows, it will be shown that St. Louis has not been alone in its post World War II economic and social history.

[ Table B3-5, Average Annual Population Growth Rates ]

ST. LOUIS, CENTER CITIES AND CONTINUED DECENTRALIZATION AND RESTRUCTURING

The twin processes of population and jobs decentralization and economic restructuring have left their mark on St. Louis and have continued into the late 1990s. Today, however, the restructuring appears to occur more in response to changes in the service sector, especially in health services and technology and communications based services. Recent evidence shows that the out-migration of jobs and people continues and that St. Louis is not alone in its predicament. Tables B3-6, B3-7, and B3-8 show the trend in population growth rates between 1950 and 1998 for fourteen U.S. cities (including St. Louis) that are of similar economic composition or share geographic proximity. (Table B3-6 shows the total population, Table B3-7 depicts the population change from decade to decade and Table B3-8 shows the average annual growth rate for each decade. Data for 1998 are estimates provided by the U.S. Census bureau.) The data provided in these tables provides a now very familiar picture that has continued unabated.

POPULATION DECENTRALIZATION AND CENTER CITIES

As the data shows, St. Louis has experienced some of the greatest rates of population loss in the post Second World War period, losing over 60% of its 1950 population. This loss rate is significantly higher than the rates in Pittsburgh, Buffalo, Detroit and Cleveland, each of which has lost between 49.7% and 45.8% of their 1950 populations. The average annual rate of loss has ALSO been greater than any of the sample cities. Only Pittsburgh, Buffalo, Cleveland and Detroit’s 1.0% come close to St. Louis’ 1.3%. Some cities, such as Indianapolis, Nashville, and Memphis, have grown in population, in part due to large land areas within their boundaries and annexations. The remaining cities had population losses since 1950 in the 30-39% range. St. Louis’ sixty-one square miles is among the smallest of any significant cities in the nation. Although most cities in the sample that have lost population have done so consistently, some have shown a pattern of both loss and gain over the five-decade period. Only Buffalo (-22.7%) and Pittsburgh (-18.5%) in the 1970s came close to the 27.2% loss experienced by St. Louis, but some cities such as Detroit and Pittsburgh in the 1980s had a higher rate of loss than St. Louis. Of the sample cities, the 1980s were the only decade in which St. Louis had a slower rate of population loss than some other cities. In the 1990s, it would appear from the recent estimates that St. Louis would again have the enigmatic distinction of having a greater average annual population loss than in any of the fourteen cities in the sample. The analysis presented in the following section provides a more optimistic economic picture than the history of population change.

[ Table B3-6, Population for Selected U.S. Center Cities: 1950-1998 ]

[ Table B3-7, Percent Population Change for Selected U.S. Center Cities: 1950-1998 ]

[ Table B3-8, Annual Average Population Change for Selected U.S. Center Cities: 1950-1998 ]

ECONOMIC RESTRUCTURING IN ST. LOUIS AND OTHER CENTER CITIES

Like population, the fourteen-city sample also shows that St. Louis’ losses in employment, the number of establishments, and payroll in the manufacturing sector has been similar to that of the other cities. The economic restructuring that has impacted the St. Louis economy so strongly over the post Second World War period has impacted the sample cities in a similar rate of change. Tables B3-8-12 show in a variety of ways the change in total employment and the shift from manufacturing to services in the fourteen-city sample from 1970-1997. (Table B3-9 present the actual numbers of establishments for the 1970-97 period for total establishments and the manufacturing and service sectors. Table B3-10 shows the percentage change in the manufacturing and services sectors as a percent of total employment from 1970 to 1997. The data in these tables are from a national government time series that shows only private sector employment.) It should be noted that the data is for the counties in which the Center City is located and except for Baltimore and St. Louis, which are separate counties, the data will reflect countywide changes. While this poses problems of comparability, it will nonetheless provide a picture of how the inability of St. Louis to grow geographically and its current small size make continue to make it difficult to show positive economic growth in absolute terms.

The restructuring of the St. Louis economy is striking; manufacturing represented 35 % of employment and 11% of establishments in 1970 and declined to 16% of employment and 9% of establishments by 1997. Conversely, service sector employment has grown from 16% employment and 31% establishments to 44% employment and 40% of establishments in 1997. Those changes represent a 64% decrease in manufacturing employment and a 47% decline in the number of establishments. Service sector employment has increased by 52%, but as a sector, has lost 11% of its establishments since 1970. The amount of payroll generated by the manufacturing and service sectors has done a similar reversal as employment and the number of establishments. Manufacturing payroll has fallen from 39% in total payroll in 1970 to 20% of total in 1997. Likewise, service sector payroll has risen to 37% of total from 16%, an increase of over 133%. When compared to the sample cities and the nation, St. Louis, unlike population trends, appears to be in the middle of the pack rather than leading it.

It is clear that in terms of the proportion of manufacturing employment and establishments, St. Louis is very similar to the average of the fourteen-city sample and the nation. (Again it should be noted that there are problems of comparability in the data.) St. Louis’ share of manufacturing in 1970 and 1997 is almost identical to the proportion of employment and establishments in the sample and in the nation and would appear to have a slightly higher share of manufacturing establishments in 1997 than the sample or the nation. The St. Louis share of service sector employment and establishments appears to have been higher than the sample average in 1970 and has remained so in 1997. In 1970, the service sector employment was five (5) percentage points higher than the nation and four (4) percentage points higher than the sample average. And in 1997 the proportion of service sector employment has grown to nine (9) percentage points higher than the nation and eight (8) percentage points higher than the sample. The number of service establishments appears to be closer to both the nation and the sample perhaps indicating that the average employment of St. Louis service sector establishments is higher than both the nation and the sample.

Although the proportions of local manufacturing and service sector employment and number of establishments remains consistent with national and the sample averages, the percentage change tells another story. In general, the data for the percentage change in the manufacturing and service sectors has declined at a greater rate than any city in the sample. For manufacturing employment, St. Louis’ change was almost 50% higher (-64% to -41%) than the sample average and the number of establishments declined at nearly six times (-47% to 8%) the rate of the sample average. The service sector also shows that the growth in employment and the number of establishments is considerably less than the sample. Service sector employment has increased 52% since 1970, but the sample increased by 138%. Likewise, the number of service sector establishments actually declined by 11% while the sample average change was a 76% increase.

Again, it would appear that the inability of St. Louis to grow beyond its existing borders might in part explain the less than average growth or change in the manufacturing and service sectors. Of the fourteen sample cities, only Baltimore and Detroit experienced total employment declines during the 1970-98 period and although every city except Minneapolis lost manufacturing employment, the service sector growth in St. Louis has been less than only Buffalo, Memphis and Detroit. (It should be noted again that the data reflects countywide data for the counties that these central cities are in and it is probable that much of the growth documented here is due to growth in the outlying county and not the central city.) Still, the prospect that growth in the service sector has lagged behind growth in the nation and in the sample (on an average basis) is a cause for concern.

[ Table B3-9, TOTAL INDUSTRY ESTABLISHMENTS FOR MANUFACTURING AND SERVICES ]

[ Table B3-10, Manufacturing & Service Sectors as Percent of Total Employment for Selected Center Cities, 1970 and 1997 ]

RETAIL SALES AND THE CENTER CITIES

Another measure of economic vitality is the amount of retail activity that is found in a particular jurisdiction. Retail activity reflects both the spending capacity of local residents and ability of a jurisdiction to generate consumption that produces employment and earnings for residents and tax revenues. The data found in Tables B3-11, B3-12 and B3-13 measure the retail activity of St. Louis and other center cities. This data is based on data provided by Sales and Marketing Management Magazine for the years 1985, 1990, 1995 and 1998 which estimates the level of retail sales and measure of the spending capacity, a measure they call Effective Buying Income, of metropolitan areas and center cities. (It should be noted that comparisons over time are problematic in this data, since the method of estimating the retail sales and spending capacity has changed over the years. With this in mind, the data has been presented in a form that will allow comparisons to be made in the years presented under the assumption that for each year the estimates for each city would be consistent.) As in the previous sections, this data puts St. Louis in comparison with other center cities as a means to measure its status relative to cities in similar regional contexts. The data shows that the proportion of St. Louis continues to erode relative to the region and that because of the population out-migration, the amount of spending capacity continues to decline as well.

Table B3-11 provides a comparison of center city retail sales as a percent of its regional sales. It also includes the proportion of population that was estimated to be in the center city as a means of measuring the level of activity under the assumption that a good measure of a city’s share of retail activity would be roughly equivalent to its share of population. As this table shows, St. Louis has both one of the lowest proportions of population and sales when compared with the other center cities, but also has seen its share of sales relative to its share of population decline as well. In 1985 St. Louis’ share of population and retail sales were estimated to be roughly equivalent, but by the 1990s the difference between the two had widen. This no doubt reflects the continued loss not only on retail establishments, but the growing proportion of low-income residents that populate St. Louis. Furthermore, it would appear that of the fourteen-city sample, only Detroit has captured a smaller share of regional retail sales than St. Louis, again perhaps indicating the "landlocked" predicament that St. Louis finds itself within the region.

Tables B3-12 and B3-13 provide a similar picture of the declining regional share and buying power of St. Louis residents by providing a ratio of Center City and regional median and total buying capacity. Table B3-12 shows that St. Louis’ population has a median buying capacity that has declined since 1985 relative to the region’s median buying capacity. It also shows that aggregate buying capacity has declined relative to the region as well and that it remains among the lowest in the fourteen-city sample. Table B3-13 assumes that a jurisdiction would like to have its residents spend their buying income in their jurisdiction, thereby hoping to “capture” a healthy proportion of that buying capacity in their retail establishments. St. Louis’ “capture rates” for its buying capacity and its share of regional buying capacity would appear to be consistent with those for the sample of center cities. Its share of the regional buying capacity continues to decline, but it captures a consistent share of local buying capacity. Perhaps because of the inability of the large number of its low-income residents to travel to suburban shopping locations, St. Louis has maintained a consistent capture rate since 1985. (The estimates for 1990 appear to be significantly different than those used in 1985.)

[ Table B3-11, Retail Sales Comparison for Selected Cities, 1985, 1990, 1995, 1998 ]

[ Table B3-12, Comparison of Effective Buying Income for Selected Cities ]

[ Table B3-13, Comparison of Effective Buying Income for Selected Cities ]

As this section has shown, the post second World War period has been characterized by significant and continued losses of population, losses of jobs from center cities, and a restructuring of those economies from ones based largely on manufacturing industries to ones based on service industries. St. Louis’ economic history is similar to that of other center cities, so there is some solace in the fact that the condition and trend is not unique. But because the competition among cities is often intense, the creation of continued growth in economic activity and opportunity is essential to the fiscal health of the City and the earnings potential of its residents. The section that follows takes a closer look at St. Louis during the 1990s with emphasis on earnings, employment, the civilian labor force and some fiscal indicators.

ST. LOUIS IN THE 1990S

St. Louis in the 1990s appears to be a city with a restructured economy that is largely based on service-oriented economic activities and has maintained a proportion of manufacturing industries that are very similar to an average sample of center cities and the nation. Still, when comparing St. Louis to the region, the long established trends of employment and establishment decentralization continues to be evident. After starting with a recession, the 1990s have evolved into a period of unprecedented and uninterrupted economic growth. The evidence provided in the sections that follow will show that St. Louis has shared in this growth, but at rates below those experienced by the region as a whole. Tables B3-14 compares the personal income growth and total earnings generated in St. Louis relative to the region. Table B3-15 shows those earnings by industry and how they have changed over the decade.

PERSONAL INCOME, TOTAL INDUSTRY EARNINGS AND UNEMPLOYMENT

As Table B3-14 shows, St. Louis personal income and total earnings in current dollars grew by 20% and 22% respectively between 1990 and 1998 and compares somewhat favorably to the growth in income and earnings in the region (MSA) of 36% and 36% respectively. On a per capita basis, the growth in St. Louis personal income has been greater than that than the region. However, when accounting for inflation, the picture is less optimistic. Personal income actually declined by 2.2% and total earnings remained almost unchanged (-0.04%) from 1990. During the same period, the region’s personal income grew in real terms by 11% and total earnings by 10%. This indicates that, while there continues to be positive growth in personal income and earnings within St. Louis during the 1990s, it is at rates that have not kept up well with the modest rate of inflation of the decade.

Table B3-15 presents earnings in St. Louis by industry and shows that there has been significant growth in every industry group except mining, which is a small and insignificant sector of the local economy. Every St. Louis industrial sector enjoyed positive earnings growth, but were again significantly less than those of the region. In general, the data shows that manufacturing continues to decline in its capacity to supply earnings to workers in St. Louis and the region. St. Louis manufacturing earnings declined by 8% during the 1990s lead by a decline in durable goods earnings of 14%. Likewise earnings for manufacturing in the region declined by 9% lead by a 16% decline in durable goods. Retail earnings declined in both St. Louis and the region. The biggest earnings winners during the 1990s appears to be services and FIRE (finance, insurance and real estate) which grew at 12% and 13% in St. Louis and 14% and 11% in the regions.

[ Table B3-14, PERSONAL INCOME BY MAJOR SOURCE IN CURRENT DOLLARS 1990-1997 ]

[ Table B3-15, Earnings by Major Industry Group 1990-1997 ]

Taken together this data would indicate that the growth in industry earnings would appear to be slightly higher than that of the region’s. Table B3-16 shows the ratio of personal income growth between St. Louis and the region during the 1990s. It indicates that while the population ratio continues, personal income has remained relatively unchanged and total earnings have declined only slightly. The same could be said for total payroll, which is presented in Table B3-17. While St. Louis’ employment and establishments have continued their gradual, but steady decline during the 1990s, the payroll of St. Louis businesses has remained constant. Another indication of the relationship of St. Louis to the greater regional economy is found in Table B3-18, which shows the change in the size of the civilian labor force (CLF), the number of employed and unemployed persons and the unemployment rates during the 1990s. In general, the data follows the pattern of population and employment change as the CLF of the St. Louis continued to decline during the 1990s while it grew in the region. The St. Louis CLF declined by over 20,000 during the 1990s while the region increased by almost 51,000. These changes are reflected in changes in the number of employed persons in both the region and St. Louis and their rates of unemployment. As it has for several decades, the rate of unemployment in St. Louis continues to be considerably higher than the region, actually increasing as a ratio of the region’s unemployment rate. This coming as the number of unemployed persons in St. Louis has actually declined by 2,700 over the course of the decade and may be an indication of the continued loss of persons that have employable skills or persons wanting or having the ability to be in the labor force.

[ Table B3-16, PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY INDUSTRY ]

[ Table B3-17, RATIO OF CITY OF ST. LOUIS EMPLOYMENT, TOTAL PAYROLL AND ESTABLISHMENTS TO ST. LOUIS MSA ]

[ Table B3-18, ST. LOUIS CITY AND MSA CIVILIAN LABOR FORCE AND EMPLOYMENT CHANGE 1990-1998 ]

FISCAL INDICATORS

All of the previous analyses have implications for St. Louis’ fiscal health and Tables B3-19, B3-20 and B3-21 provide a picture of St. Louis’ fiscal condition during the 1990s. Table B3-19 shows changes in the St. Louis budget during the 1990s and shows that in real terms, the budget has increased at a modest annual average rate of 1.7%. It also shows that on a per capita basis the amount of expenditures continues to rise. In nominal terms, per capita expenditures rose at a rate of 7.6% during the 1990s and 3.8% in terms of constant dollars. This would indicate that although St. Louis’ population has continued to decline, the cost of providing services, particularly to one with a significant poverty population, continues to rise.

From Table B3-20, the manifestation of the impacts of social and economic losses can be seen in the decrease in the assessed valuation of taxable property in St. Louis. Although in current dollars the assessed valuation of taxable property increased by 18.7% during the 1990s, in 198-84 constant dollars, assessed valuation of taxable property actually declined by 4.9%. The annual average real loss of less than one percent were perhaps an indication that there is an actual decline in the amount of taxable property in St. Louis. Finally, Table B3-21 shows the growth of general fund revenues during the 1990s. Like budget expenditures and assessed valuations, general fund revenues grew in nominal terms during the 1990s by 17.5% or at an annual average of 1.9%. In real terms, however, revenues have actually declined by 8.5%, an average annual rate of .9%. In general, the fiscal health of St. Louis remains on uncertain footing due to the continued loss of population, jobs and businesses.

[ Table B3-19, City of St. Louis Budget Comparison FY1990-1999 ]

[ Table B3-20, City of St. Louis Assessed Valuation - Taxable Property FY1990-1998 ]

[ Table B3-21, City of St. Louis General revenue Fund Comparison FY1990-1998 ]

CONCLUSIONS

The above analyses have provided a picture of the St. Louis economy that continues to show signs of the decades-long processes of population and jobs decentralization and economic restructuring. Although these processes have extracted a heavy toll given St. Louis’ pre World War II economic status, there remains pockets of strength and opportunity and a context not unlike many other center cities in the nation. Evidence from the 1990s would seem to indicate that St. Louis has participated in the long, uninterrupted economic growth that has characterized the decade, but it has done so at a slower pace than the rest of the region In general, it could be said that St. Louis is not suffering as badly as it had in previous decades, particularly the 1970s when the manufacturing and service transformation began to manifest itself in factory closings and jobs transfers. It also appears that economic restructuring continues, but more within the now dominant service sector where health services, communications and technology based industries now compete for market share and dominance. Manufacturing industries remains a significant sector in St. Louis and in the region, but at a much smaller share of total employment and industry earnings.

Because of its location within the region and the nation, St. Louis will remain a focal point of economy activity. As many of the analyses have shown, St. Louis’ land area (61 square miles) is among the smallest of all significant cities in the nation and its inability to grow beyond its current boundaries will continue to hinder its ability to improve economically. Still, because of the CBD, the presence of several Fortune 500 companies and its natural location advantages within the nation, the prospects for improvement remain. In the short term, St. Louis might take advantage of the some its remaining strengths.

Recent plans underwritten by the private sector to revitalize the CBD, are a recognition that it is a natural location with the potential to recapture some of its lost share of economic activity. It is also recognition that the CBD is the foremost vehicle for the region’s image and, as such, an important draw for import capital and investment. Building on the CBD’s location advantages and importance as an intangible image-maker should continue to be a priority for development.

Likewise, St. Louis has invested heavily in tourism and meetings facilities over the past several decades and has transformed much of the land area devoted to obsolete economic structures into more economically and fiscally productive uses. This has included facilities for conventions and meetings, sports, retail and entertainment. In spite of having almost of all the components of this “next generation” of urban infrastructure, it generally remains disconnected and has experienced mixed results. St. Louis must strive to pull these components together in a more coordinated fashion that will maximize their use and economic and fiscal capacities. St. Louis should also take a lead in encouraging the growth in its health industries and communications sectors, which are its largest local employers.

Finally, St. Louis should consider the degree to which it emphasizes residential revitalization over industrial and commercial uses. In purely economic terms, industrial and commercial land uses are much more productive than residential uses, which are largely consumers of city services. Furthermore, history has perhaps demonstrated that job opportunities may serve as a stronger “pull” than available housing. Given the continued population loss, a dominate housing policy has at best moved existing population around within the city and save for a few exceptions, has not been successful in arresting population losses. The creation of sites attractive to contemporary industrial and commercial uses would provide net economic and fiscal benefits that decades of a predominate housing policy has not produced. In the unlikely scenario that there will be a large influx of in-migration given the perceived status of the school system and other social divisions, industrial and commercial job generating activities should be given priority.