Presentation on theme: "The Missouri Economy: In Transition or Decline? David M. Mitchell Associate Professor –Dept. of Economics Director—Bureau of Economic Research and the."— Presentation transcript:
The Missouri Economy: In Transition or Decline? David M. Mitchell Associate Professor –Dept. of Economics Director—Bureau of Economic Research and the Center for Economic Education Missouri State University
Every lost job in Missouri diminishes taxable sales by $16,435 or decreases in sales tax revenue of approximately $1,477. Every job lost in Missouri diminishes total tax collections (income and sales tax) by about $3,600— therefore, we see a decrease of approximately $570 million. This does not include the decrease in gas tax, alcohol, etc. or the increase in costs for greater AFDC, food stamps, Medicaid, unemployment compensation, etc.
Also, consider what employment would be at if we didn’t have the ‘bowl effect’ and had grown at the rate in the 1990s. Assume no recession, and employment would be 3,427,000 today—an additional 700,000 jobs or $2.5 billion in the state budget or an increased $11.5 billion in taxable sales compared to today. With the same percentage drop in the current recession? Employment would be 3,058,000 or an increase of 325,000 jobs compared to today—an additional $1.2 billion in the state budget or an increased $5.3 billion compared to today
Forecast of Missouri for 2010 Based on US GDP growing at 2.1% and US unemployment rate of 9.6% Mo Employment will decline another 5,040 to 2.713 million Mo Unemployment Rate of 10.1% Missouri Taxable Sales—flat Missouri Tax Revenue—down 4%
Missouri and the Midwest GSP as a percent of US GDP
Growth of Missouri Employment less Growth of US Employment Seasonally Adjusted Year over Year
Understanding the Problem The Missouri economy has been in a state of decline for over 50 years Had the Missouri economy grown at the same rate of the nation, its Gross State Product would be 35% larger than today. Furthermore, had the Missouri economy grown at the same rate as the nation, its Personal Income would be 20% larger than today