Lack of Higher Wage Opportunities in Missouri Contributes to Slower Economic Growth

This paper uses publicly available datasets from federal government agencies to explore differences in income inequality across rural and urban Missouri in the aftermath of the Great Recession to better understand how these factors are associated with relative job loss and job recovery. Previous work has explored various explanations for Missouri’s weak economic performance; could income inequality be a contributing factor? I find that Missouri has lower income inequality than the nation, largely from a lack of high-wage jobs. Missouri, and especially rural Missouri, obtains lower income inequality primarily through a lack of high-income households. Across the nation, rising income inequality is concentrating wealth and constraining consumption. Examining the state across multiple measures, Missouri’s residents have limited abilities to consume and invest, which inhibits economic growth. Low median household incomes and a lack of highly paid jobs are all contributing to slow population growth and slow or negative employment change during the past two national recessions. These challenges are present in both rural and urban areas of the state