How does the St. Louis region fare as compared to regional economic growth across the U.S.? Charles Gascon, an economist at the Federal Reserve Bank of St. Louis, found that Midwestern cities have struggled to retain their population due to a decline in manufacturing.
He also found that people will go seek out better opportunities in areas with better amenities.
“Such as really nice weather or coastlines and factors like that that have made them very, very attractive for workers and people to live,” he said. “The benefit of that has been that, you know, it’s really allowed population growth to be quite strong in those places which then drives a lot of service sector growth in those areas as well.”
With manufacturing on the decline, the IT sector has seen rapid growth in many U.S. coastal areas.
“Cost of living is the price of living in a certain location,” Gascon said. “If that price is high, that generally reflects the idea that it’s a desirable place to live. There’s quality amenities. There’s good job opportunities and people are willing to pay a premium to live in that location.”
On the flipside of that coin, dramatically increased home prices have discouraged some people from moving to those “sought after” areas where they otherwise would make more money.
Regarding the St. Louis region’s decline, Gascon looks at average wage growth and average population growth.
“Particularly the growth also in the employment rate of those that are working age,” he said. “On those dimensions, St. Louis probably does not meet those marks. Now that doesn’t mean that we’re not setting the foundation for future growth, but some of this is a reflection of also some of the trends that we’ve had in the past.”
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