Tuesday, March 27, 2012

Prospects for the St. Louis economy

Today's Post-Dispatch has a column by Dave Nicklaus that talks about how St. Louis has slipped back into its usual position of underperforming relative to the country as a whole:
During the Great Recession and for a while afterward, the metro area's employment reports tracked national trends closely. We suffered the same devastating job losses, percentage wise, as the rest of the country in 2008 and 2009, and we experienced the same halting recovery in 2010.
Then, early last year, the lines diverged. The nation continued to add jobs, slowly but steadily, and St. Louis didn't. For all of 2011, the metro area lost 3,900 jobs, a shrinkage of 0.3 percent.
As for the near future, Nicklaus notes that Dave Rapach of St. Louis University forecasts job growth of about 13,000 jobs for 2012, which feels a little high to about right.  During normal times such growth would be a bit below average, but given the hole we need to climb out of, it would be woefully inadequate.

The article quotes me going on about two recurring themes of mine. The first is that what little recovery the country has seen has a lot to do with the energy sector:
“It's just our usual thing of being behind,” says Howard Wall, chairman of the economics department at Lindenwood University. “The industries that are doing well, we don't have.”
Of late, that's the oil and gas industry. Until someone discovers shale gas under the Gateway Arch, we won't keep pace with states like Texas, North Dakota and Pennsylvania.
The second is that we need to keep our focus on things we have control over and which affect our long term growth prospects:
“Our long-term problem,” Wall continues, “is human capital. We have not enough workers who are highly educated and too many of the poorly educated.”
Political leaders, however, don't get it. Instead of figuring out how to improve Missouri's education system, elected officials debate tax-credit programs that shift money to favored industries.
They're fighting over pieces of the pie rather than making the pie bigger.