Vanessa Drucker: The economics of Ferguson


Last week, riots and demonstrations erupted across America, instigated by the grand jury decision not to indict police officer Darren Wilson for the shooting death of Michael Brown in Ferguson. A teenager’s death is sad, but for years a real tragedy will impact the residents of Ferguson and other similar derelict communities. The press, which has fanned the unrest, bears heavy responsibility.

Ferguson, Missouri, founded as a railroad depot eight miles from St Louis, attracted many freed slaves after the America Civil War.  The population, however, remained 85 per cent white until 1980, after which families began to move away.  Today, it is inhabited by just 14,000 blacks and 6500 whites.  Since 2000, when unemployment stood at 7 per cent, joblessness has risen to over 13 per cent, while the local economy has shrunk by a third. During that period, poverty has doubled, with one in four households living below the federal poverty line ($23,492 per family). Over half its 9,100 homes are unoccupied.

Those dire statistics are doomed to worsen, in response to the chaos. Riots serve to drive away small businesses, meaning residents must pay more or travel further for goods and services.  Property values will continue to erode, and businesses will struggle to obtain insurance.

Those who advocate protest or even civil disobedience argue that the composition of local policing leads to bias and insensitivity. They note that among the town’s 53 police, only three are black; in 2014, blacks were arrested four times as often as whites, on 217 versus 27 occasions.

Yet law enforcement has been performing better in recent years. Violent crime in Ferguson has actually fallen since 2008, from 163 to 80 incidents a year. There are significantly fewer rapes, burglaries, thefts and auto thefts. The many law-abiding impoverished people of Ferguson desperately need and deserve the best policing available, and personal protection is even more important than racial sensitivity.

Imagine if the grand jury had in fact indicted Officer Wilson (although their dismissal of all five counts showed no ambivalence whatsoever). But suppose they had, how would that have affected police morale in Ferguson and many other such blighted communities?

Vanessa Drucker is American editor of Fund Strategy magazine