St. Louis, like the rest of the United States, still bears scars from the Great Recession, which ended more than five years ago. Unlike much of the nation, healing here has been slow and uneven.
The evidence shows up in the region’s job statistics, among other places. Over the past year, the number of jobs increased by 2.3 percent across the nation. In the St. Louis area, the number of jobs increased by 1.3 percent.
Since 2009, the year the recession ended, the number of jobs in the nation has increased by 8 percent. In metro St. Louis, it is 3.6 percent.
By last May, the nation had caught up on all the jobs lost in the recession and added more. As of December, St. Louis was still 35,000 jobs short of its peak in early 2008.
In fact, St. Louis ranks 45th out of 50 large metro areas in job growth from 2010 to 2013, according to an analysis from the East-West Gateway Council of Governments, the region’s planning arm.
Economic production is growing more slowly here as well. The value of all things produced in St. Louis grew 10 percent from the recession’s depth in 2009 to 2013, the last estimate available from the U.S. Bureau of Economic Analysis. Production in all metro areas in the U.S. grew 16 percent.
The region’s economy is seeing signs of recovery, but it trails the rest of America. People who study such things are uncertain why.
Weak population growth may explain much of it. So do cutbacks in government jobs and sluggishness in areas that had been a regional strength, such as education and health care. Manufacturing has seen no growth for four years.
For local job hunters, the slow recovery has been frustrating.
John Hild, 58, who had a long career as a financial analyst, saw his days of full-time employment end with a layoff in 2012.
Since then, he’s been part of the contingent workforce — picking up temporary jobs in finance to pay the bills. Most come with no benefits and no vacation. “It’s not that easy,” he said. “You always wonder when the next job is coming. You have to be constantly networking.”
Hild, of Florissant, thinks his age is his enemy. More than 100 job applications brought few interviews. “It doesn’t feel good,” he said.
People think of St. Louis as a big-shouldered brewer of beer and maker of missiles and fighter planes. But a few big industries don’t call the tune here. St. Louis runs on thousands of businesses, big and little.
That complexity makes it hard to analyze why the recovery from recession behaved differently here.
St. Louis actually had two recessions, while the nation had just one, according to Bill Rogers, who watches the regional economy from his perch as an economics professor at the University of Missouri-St. Louis.
We shared the big one with the nation in December 2007 through June 2009. Then St. Louis had its own minirecession around 2012, Rogers said.
That shows up in the region’s job count. St. Louis lost jobs apace with the nation during the Great Recession, and recovered jobs at the same rate from 2009 to 2011. Then the nation kept adding jobs, while jobs in St. Louis actually fell during mid-2012. When job growth resumed here, it was at a slower pace than the nation.
Our case of the slows extends to population trends. Population has been virtually stagnant here since the recession year of 2009. The nation gained 2.7 percent during that time, according to the Census.
“At the end of the day, it’s people and how productive they are,” said Kevin Kliesen, economist at the Federal Reserve Bank of St. Louis. “It’s hard to gain jobs when you have a labor force that is not growing.”
Even when we are growing, we don’t grow fast. Between 1993 and 2013, the area population grew by 6.7 percent, while the nation grew by 21 percent, according to the Census.
Blame the weather. “For the past 100 years, the best predictor of urban growth has been January temperature, and that’s still the case. You just have a general move down south,” Rogers said.
That’s reflected in the region’s migration statistics. Between 2010 and 2013, 30,000 more people moved out of St. Louis than moved in.
Of course, the story is more complicated than a preference for warm winters, beaches or mountains, none of which St. Louis offers.
Economic growth can be self-perpetuating. A region with lots of open jobs attracts newcomers. They spend their paychecks in local stores, car repair shops and other businesses, creating more jobs and more production, which attracts more newcomers. So, growing areas tend to keep growing.
Meanwhile, St. Louis doesn’t draw many immigrants — 12,500 in those years. The foreign-born make up 4 percent of St. Louis, compared to 13 percent nationally.
Slow growth shows up in the production statistics. From 2001 to 2013, St. Louis averaged growth of 0.6 percent per year in the value of goods and services produced. The rate was 1.7 percent for other metro areas, according to figures from the Federal Reserve Bank of St. Louis.
The silver lining lies in the unemployment rate. The number of people working or looking for work declined by about 1 percent from 2010 to 2014, notes John Posey, director of research at East-West Gateway. Stagnant population explains part of that, along with baby boomer retirements and perhaps discouragement among jobless workers.
But slightly more jobs among slightly fewer workers translates into a falling unemployment rate. As of December, 5.9 percent of St. Louis workers were out of a job, compared to 5.6 percent nationally. The local rate is down from a high of 10.4 percent in late 2009.
The number of jobless people looking for work is down 14,000 in the past year, to 79,000, according to the Bureau of Labor Statistics.
Among the unemployed, some groups suffer more than others. The jobless rate for St. Louis-area black residents was 8.6 percent, compared to 5.7 percent for whites in 2013, the last year for which a racial breakdown was available from the Bureau of Labor Statistics.
Joblessness also runs higher for youths. It was 24 percent for St. Louis blacks ages 20 to 24 in 2013, and 10 percent for whites at that age, according to the Census.
Montaz Jones, 36, of Normandy, has spent much of his life bouncing between temporary gigs in St. Louis warehouses, loading trucks and lifting boxes. When one job ended, he’d go hunting for another. The jobs paid $8.25 to $10 an hour — not enough for a man with two children to help support.
“They were laying me off, and I needed something permanent,” he said. “I wasn’t going nowhere.”
Now he’s finishing eight weeks training in construction at the Met Center, the regional job training center in Wellston. Construction is picking up again in St. Louis, and Jones is hopeful.
“I’m thinking in the next few years I could be making $15 or $20 an hour. It’s beautiful. I can see it now,” he said.
WHERE THE JOBS ARE
The St. Louis economy is like the nation in miniature. The distribution of occupations here pretty much matches America, with a few exceptions.
Education, hospitals, brewing, data processing, securities brokerages, aircraft manufacturing and gambling play a somewhat bigger role in employment here. So does “management of companies,” reflecting St. Louis’ status as home to divisional and corporate headquarters. “Amusements, gambling and recreation” is also a little larger here, perhaps due to six casinos and Six Flags.
But the extra jobs in those industries make up a small part of the total jobs picture. Mainly, we look like America.
Still, a stall-out in health care and education helps explain St. Louis’ sluggish performance since the recession. Together, they provide 14 percent of the region’s jobs, and they’d been growth engines in prior years.
In fact, if health and education had continued their pre-2011 growth rate, they would have filled in four-fifths of the remaining jobs missing since 2009.
Health care employment here actually grew during the Great Recession. “There are two reasons — capital was cheap and the expected demand for health services was strong,” said Dave Dillon, spokesman for the Missouri Hospital Association.
Then, surprisingly, it flat-lined in 2012 and hasn’t gained much since.
There are several reasons. Some of it was pressure from Medicare, which began changing the way it pays hospitals and penalizing those with poor performance. The trend toward rising deductibles and copays made people with health insurance postpone care.
The Affordable Care Act cheered the health business when it passed in 2010. Its promise of near-universal coverage meant fewer bad debts for doctors and hospitals. The Missouri Legislature changed that calculus when it refused to expand Medicaid, sticking hospitals with the cost of caring for poor people in emergency rooms.
Education jobs held steady in the recession, and started to grow afterward. Then the teaching business ran out of steam in 2012. It lost jobs and then held steady with no real growth for two years.
People who want small government are getting it in St. Louis. The government job count is down 1 percent in the past year and 3 percent since the recession, mainly due to cuts in state and local government. The sector makes up 12 percent of the region’s jobs.
Manufacturing, which provides 8 percent of local employment, has grown hardly at all since the recession ended, and it still is 24,000 jobs short of its pre-recession peak.
“We are still feeling the effect of both Chrysler plants closing. That gave us a much deeper hole to climb out of than the rest of the nation,” said Denny Coleman, the soon-to-retire head of the St. Louis Economic Development Partnership, the joint city-county effort to increase jobs here.
Chrysler closing its last Fenton plant in 2009 followed the closing of the Ford assembly plant in Hazelwood in 2006, and both had repercussions among local parts suppliers.
But Coleman notes expansion plans at several local companies that aren’t yet showing up in the job count.
General Motors is adding a third shift at its Wentzville plant, growing from 2,600 to 3,350 workers. Boeing, the region’s biggest manufacturing employer, plans to hire 700 over the next few years to build parts for the 777X commercial airliner. Monsanto is expanding its Chesterfield Research Center, adding 675 jobs over three years, and World Wide Technologies is also planning growth.
“What we’re seeing out of major corporations is very high paying jobs with significant multiplier effects. Those jobs have been announced, but are not being filled yet,” he said. “That will eventually get us pretty good numbers.”
With health and education in a rut, finance has emerged as St. Louis’ major employment strong point. The region is home to the biggest concentration of investment brokerages west of Manhattan. St. Charles County hosts the electronic backbone of MasterCard’s worldwide system and giant Citicorp’s mortgage operation. Downtown and Clayton serve as regional headquarters for major banks, and one of the world’s major reinsurance companies has a brand new headquarters in Chesterfield.
Finance employment here is up 14 percent in five years, and 2.5 percent in the past year. Its 90,000 employees account for 7 percent of the region’s jobs.
Finance tends to pay well, and that’s important if St. Louis is to gain momentum, says Kurt Rankin, a PNC economist who issued a report on St. Louis last week. Highly paid workers support other jobs as they spend their paychecks.
The St. Louis housing market suffered less than the rest of the nation in the Great Recession. It also began its recovery later, and construction jobs finally appear to be growing. As of December, a slow month for construction, the job count was up 8 percent from the year before, although it’s still far below pre-recession levels.
That’s good news for a long-suffering group of workers.
“God has to want me in this job,” said Stanley Matulewic of the post he landed in September after four years of looking. “I’m tickled to death.”
Matulewic, a civil engineer, was laid off from his job at a construction firm in 2011. He was 61.
“I vigorously looked for work,” he said, but construction was dead.
He ended up with a part-time job driving vans for $12 an hour. Then he found a temporary job walking around an old industrial site with a Geiger counter.
He spent too much time sitting at home. “My wife married me for better or for worse, but not for lunch every day,” he said.
Along the way, he’d kept up with a colleague from his old company. “I’d send him emailed jokes,” he said.
Then last year, the Austin Company set up a St. Louis office to handle health care construction jobs, which was Matulewic’s old specialty. His old colleague was doing the hiring, and called Matulewic.
He thinks he found one of the odder ways to land work. “Nobody ever told me to send email jokes to a recruiter,” he said.
NO EASY FIXES
St. Louis isn’t the only city experiencing a slow jobs recovery. The St. Louis Federal Reserve Bank monitors the economy in a swath of the lower Midwest and South. Cities such as Memphis, Tenn., and Little Rock, Ark., are in the same slow boat as St. Louis, says Kliesen, although Louisville, Ky., is doing slightly better.
By contrast, some smaller cities are more vibrant, he says. Some of that growth can be linked to big universities in towns such as Columbia, Mo., and Fayetteville, Ark. But growth is also strong in places such as Springfield, Mo., and Evansville, Ind.
Rankin, the PNC economist, thinks the area job market will improve “somewhat” this year but St. Louis will still lag the nation. “Unfortunately, this will remain the case in the coming year,” he wrote.
Meanwhile, there’s no easy way to rev up the local jobs machine. Things government can do — such as improve education, roads and public safety — cost money and take years to show results.
Coleman’s group and the World Trade Center launched the Mosaic Project to lure more immigrants to St. Louis.
Direct government incentives — such as the $229 million the state dangled in front of Boeing in hopes of landing thousands of aircraft jobs — spark endless debate over whether the region gains value for the money.
Hope may lie in a growing entrepreneurial sector here, said Kliesen, the Fed economist. Google and Microsoft started as small companies, then grew into behemoths. The more startups start up in St. Louis, the better chance the region has of growing its own big employers.
That makes the region’s universities important as discovery generators, as are business-nurturing projects such as Cortex and T-Rex. “It’s getting some traction here, and that’s good,” said Kliesen.
That, too, will take time. “I don’t see anything in the near future that would cause St. Louis to really take off,” said Rogers.