The city of St. Louis has suffered from a deep rooted history of racial tensions, issues and inequalities for years. Businesses that once thrived within the city have left the city for suburban areas. The events in the Michael Brown case in Ferguson, Mo on August 9, 2014 forever changed the face of the city and a Nation. In this paper, the author would like to delve into the economic effects that the city has dealt with prior to, during and after the events of August 9, 2014. This paper will evaluate and examine the economic effects that the events has had on this city and community. This paper will explore the decisions made by government officials during and after the riots that affected businesses in the immediate and surrounding areas. This paper would also look at how and if the city can recover.
History of St. Louis St. Louis is a metropolitan city which has 92 suburbs that make up the St. Louis County. The city of St. Louis is divided up into the north side which is predominately African American, the south side which is predominately Caucasian, the central west end which is a mixed group and East St. Louis which despite the fact that it is in Illinois is predominately African American. The counties of St. Louis are also divided by race with North County being predominately African American, South County predominately Caucasian, and West County predominately Caucasian. There are twenty four county school districts and one large school district for the city of St. Louis. There is a program in the city of St. Louis that allows students who live in the city to attend a county school which is set up to provide diversity within school districts. This also allows students to attend an accredited school district because the St. Louis City school district is unaccredited. With this program some children travel as far as thirty to forty miles to attend a “good” school. Students from St. Louis County can also be bussed to a city school. St. Louis also has several different police departments. St. Louis City has their own police department, St. Louis County has the largest county police department and individual municipalities have their own police departments. According to census.gov The suburbs in the County such as Country Club Hills which has a population of 1,268, Flordell Hills which has a population 819, Uplands Park population 477, Velda Village Hills population 1,052 all have their own police departments. The population in the City of St. Louis is 318,416 as of 2013. The make up in the city is 43.9% Caucasian and 49.2% African American. The median household income in the City of St. Louis is $35,582. The population below poverty in the City is 27.4%. The County of St. Louis has a population as of 2013 of 1,001,444 with 70.3% Caucasian, 23.7% African American. The median income in St. Louis County is $58,910 and 10.9% of the population living below poverty. The city of Ladue which is in West St. Louis County has a population of 8,560 with 94.1% Caucasian, 1.0% African American. The median household income as of 2013 is $176,369 and 1.6% or residents live below the poverty level.
What is Hurting the Socioeconomic Status of Residents in St. Louis and Ferguson? St. Louis has experienced the usual litany of urban ills that have helped to make the suburbs look so attractive to many families. St. Louis City has a history of machine politics, large and unsatisfactorily accountable government, greater taxes, higher crime rates, run-down infrastructure, second-rate services and mediocre education. The city’s school system has come under fire for state accreditation issues and poor performance. It could be that the City of St. Louis has been cursed with a more compelling combination of urban ills. However; one thing is very clear for the City of St. Louis, which has been in ruins for so long, it make significant recovery and reinvent itself. This can be achieved by “reinventing itself as a city where entrepreneurship is rewarded, while public safety and education become as good as any suburb” (publicpurpose.com). The city of Ferguson, Mo which is in North St. Louis County has a population as of 2013 of 21,111 with 29.3% Caucasian, 67.4% African American, the median household income is $38,685 and 24.9% of the population lives below poverty. Despite the fact that Caucasians make up only 29% of the city’s residents, five members of the city council are white out of six, the Mayor is white and six out of seven school board members are white according to Roth, 2014. According to KMOV.com out of fifty three police officers in Ferguson, on three are African American, again in city that has a population of 67.4% African American.

Like a lot of cities throughout America the city of St. Louis and the City of Ferguson suffered from the economic crisis in 2008. Job loss, foreclosed housing, jobs relocating have plagued the city. On August 9, 2014 the shooting death of Michael Brown brought about an overwhelming media presence, police presence, state trooper presence, armed National Guard presence, and riots and looting to the suburb of Ferguson, MO. Riots ensued in Ferguson because people have long felt that police brutality on citizens particularly in this case African Americans is unjust. In this case Michael Brown an African American unarmed teenager was shot and killed by Officer Darren Wilson who is Caucasian. In some accounts Brown was surrendering with his hands up as Officer Wilson shot him. His body lay in a pool of blood for hours uncovered in the streets of an apartment complex while his mother looked on not able to officially identify her child. Officer Wilson was acquitted of all charges state and Federal and Ferguson was turned upside down while the process took place. This acquittal ignited more feelings of frustration, anger and distrust of local police officers in a city already plagued with racial tensions.

The outside media presence made Ferguson look like a suburban ghetto or concrete jungle instead of a middle class suburb. The police presence helped to perpetuate an already tense situation between residents and police. The presence of state and highway troopers and the National Guard made Ferguson look worse than a war torn country. Even with all of the extra police, highway and state troopers and the National Guard rioters and looters were still able to take over the city of Ferguson not once, but twice.
Economics in Ferguson Businesses along the half mile stretch of West Florissant which was the epicenter of the riots have been the most affected since this turmoil has taken place. In August, 2014 some businesses such as the Swish Bar and Grill were forced to close for seventeen days because the police command center took over the front of the business blocking the front door with port a potties and desk. The parking lot was filled with police cars and mobile units. Other business were forced to board up windows which eventually led to a decrease in business in some instances business owners saw an 80% decrease in weekly profits (McAllister, 2014). Some businesses were without insurance which would have helped however; the business owners with insurance never thought in a million years that they would need riot insurance which would have covered damages to their businesses. The night that the verdict was delivered hit Ferguson the hardest. Instead of the police and National Guard being positioned in Ferguson, the governor had them deployed in Clayton, Missouri a high end upper class suburb of St. Louis. Meanwhile in Ferguson, buildings began to burn and looting took over. Not only did small business owners feel the effect of the fires and looting, but national chains such as Walgreens, AutoZone, Little Caesars Pizzeria, Public Storage, Advanced Auto Parts and Dollar General to name a few all burned down. Approximately twenty five structural fires took place all at once in Ferguson and all the business owners, residents, media and firefighters could do was watch them burn. After the verdict the destruction in Ferguson amounted to approximately $4.6 million in damages. Nearby cities such as Dellwood, which is along the same strip of West Florissant as the epicenter of riots experienced $1.6 million in damages (Unglesbee, 2014). Several businesses were deemed to be unsafe and therefore not able to be opened for business. Months later burned and abandoned building still remain as a reminder of the riots in Ferguson. One small businesses a local Chinese restaurant has a signs that they will re-open and have started the rebuilding process. However; at the same time major retailers such as Big Lots and Kmart have closed and Toys R Us are holding sales because they are closing their businesses in this area. Businesses are rebuilding slowly since the riots through loans, grants, crowd funding sites and insurance policies. The city of Ferguson has started the #FergusonRebuild initiative which offers business owners non-governmental grants to destroyed and damaged businesses in Ferguson and surrounding areas. The grants will pay for expenditures such as rent, utilities, payroll and inventory. However in order to receive the grant the business must rebuild in the current location or city if the business was destroyed or remain in its current location if the business was burglarized or sustained damage according to the Missouri Times, 2014. Some small businesses have started crowd funding accounts which are set up on internet sites such as gofundme.com in order to get assistance. Natalie’s Cakes and More has raised $267,519 well beyond her goal of $20,000, Fashion R Boutique raised $20,608 with a goal of $20,000 and Queens Royal Touch raised $9,580 with a goal of $19,000. Approximately 13,500 people around the world have donated to $500,000 on the gofundme site to help businesses rebuild in Ferguson (Ries, 2014). Safety is a problem not only for the residents of Ferguson, but also for the business owners of Ferguson and surrounding areas such as Jennings and Dellwood. During and after the riots businesses in surrounding areas took financial hits as well as security hits. The author of this paper who has two businesses in Jennings, Missouri a neighboring suburb of Ferguson had to have both businesses boarded up because of gunshots through the windows of her business. Not only did this cost the businesses money to repair the glass, but employees had to be sent home early for nearly four months because the owner felt there was a higher security risk and nothing was more important than the safety of her employees. Many business throughout the surrounding areas of Ferguson did the same. As a business owner in Jennings, Missouri, the author of this paper commends the police and the mayor and elected officials for stepping up taking concerns of business owners seriously. Not only do they have a high presence in the area day and night, but they patrol parking lots and business more than what could have ever expected. The police have gone to individual business owners to talk about things they could do to help them better patrol the area. Despite have security systems in place the police recommend and ask that blinds be left open so they can view inside of businesses at night. They have made follow up calls and they continue periodically stop by to see if there are any other issues with security for local businesses. This step up in patrolling, security and extra safety measures are all associated to elected officials trying to keep businesses from relocating to other areas.
The Economic Crisis Facing Ferguson Sam’s Meat Market was the only grocery store in Ferguson on West Florissant the epicenter of the riots before it was looted and burned down in November, 2014. Many residents who walk, take public transportation, or just out of convenience in this area relied on this market for their grocery and everyday essential needs. North County which includes Ferguson continues as good employment base. Emerson, a global manufacturer on the Fortune 500 list, is based in Ferguson. Boeing, Express Scripts based in Ferguson, the University of Missouri-St. Louis based in Ferguson and Mallinckrodt are among big employers producing a $7 billion annual payroll in North County (Gallagher, 2014). The city of Ferguson will have to make sure that they do not disregard principal agent issues in the community moving forward. Everyone must have the same goal which should be to make the City of Ferguson a profitable community for residents and business owners. In the case of rebuilding Ferguson incentives matter. Giving tax breaks to small business owners, giving grants that assist with rebuilding, making the community as a whole feel safe. It is very important that city officials as the principals understand the community (agents) diversified needs and goals. The city government in Ferguson has started transforming its downtown area. This area has become a destination spot for patrons of all ages with wine bars, a brew pub, trendy restaurants, a community garden, and a fitness center. Programs for new college graduates who would like to purchase homes are in effect and programs for residents who need home repairs are being offered (Gallagher, 2014). While rebuilding business owners and civic and government leaders should be cautious of price equilibrium once businesses reopen. In a community that has had significant job loss, business closure and overall panic having prices for food or everyday necessities increased simply because this is the only place in town selling items is unfair. This is also a great way for a business to fail. For businesses if a price is not at equilibrium whether the price is to high which causes a surplus or prices are to low and inventories are depleted they idea is to keep consumers coming back for business. Despite all of the turmoil in Ferguson, Centene, a fortune 500 company has decided to build a call center in Ferguson which will employ approximately two hundred people. This company is looking beyond the risk which include insurable and uninsurable risk. The company has taken into consideration the structural changes that have occurred in the economy as well as the city. The company is also taking a risk with the economic environment in which it is locating too. With all of the possible risk the company has decided to expedite its timeline and have this call center open despite the fact that it normally would take a project of this magnitude 18 months to complete. According to Brown “The Missouri Department of Economic Development has offered Centene an unspecified amount of incentives through the Missouri Works Training Program for the new facility, based on the number of jobs that are added and the amount of Centene’s investment in the project. Through the program, St. Louis Community College will provide targeted job training to staff the new center. Governor Nixon states that “Attracting new jobs and investments is vital to creating greater economic opportunities for all Missourians in this region”.
Economic Analysis of Ferguson When it comes to government people in the city of Ferguson must understand the importance of voting. Voter turnout in Ferguson is not as high as it is in many other cities and the residents can’t understand why the local government does not have the same interest as the majority of its residents. According to Montes et al., “The problem of an unrepresentative government starts with low overall turnout in Ferguson’s municipal elections”. Elected officials will have to have to make sure the businesses in Ferguson will abide by all rules and regulations. Antitrust policies have to be followed in order for one firm to monopolize this area. Price regulations have to be followed in order for the city to become prosperous. Businesses who come to the area as well as those who have been in the area need to make sure that there is truth in their advertising. Consumers should have the option to make purchases freely without being misled regarding products by greedy business owners.
Conclusion
The city of Ferguson has started to make a comeback with incentives for college graduates, small and large businesses to move into the area. The city has started a commission that is an independent, diverse group that is studying economic and social issues in Ferguson. Reinvest North County fund has been started to help business owners with grants. The Small Business Administration is offering low interest disaster loans to businesses owners. Ferguson can recover from the riots it will just take time as it has in other cities with similar riots. The most equivalent example to the Ferguson riots may be “Cincinnati in 2001, when a riot spilled from a residential area into downtown after a white policeman shot a black teenager. The unrest frightened customers, and the fear lingered long after the rioting stopped. A popular downtown entertainment area faded, and a five-star restaurant closed. A boycott by black leaders hurt the convention industry. It took a few years, but downtown eventually recovered its prosperity. The Over-the-Rhine neighborhood where the riot began is now gentrifying” (Gallagher, 2014). Ferguson will be able to pull through it will just take a matter of time.

References
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References
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References
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http://www.census.gov/quickfacts/table/PST045214/2914572,00