Dec 04, 2014 | by Franck Cushner, CFP®
Ferguson, Missouri: It’s the unavoidable conversation that seemingly everyone has had in the recent weeks following the Grand Jury decision. Personal thoughts and opinions have flooded social media sites, and many have scrutinized every aspect of our justice system. But, this article isn’t about Michael Brown, Officer Wilson, or our justice system; it’s about our country, and the effects of these controversial events that followed. Whether you agree or disagree with the rioting, looting of Ferguson businesses, or the nation-wide protests, it’s imperative to assess the monetary and economic costs that arose from these events.
For the St. Louis County Law Enforcement, the cost has already amounted to $4 million. As per Garry Earls, COO of the municipality, $2.5 million of the $4 million has been dished out to the police force to compensate the overtime pay. Since the night of the shooting on August 9th 2014, the civil unrest in Ferguson required the police force to be more of a presence than ever before. In late August, St. Louis County approved the allocation of $1 million from the county’s emergency fund to go to the residents of Ferguson. County Executive Charlie Dooley stated that residents are “facing issues such as not being able to go to work and difficulty in finding transportation,” so this money was given out to help these residents. Hazel Erby, a Ferguson area councilwoman, went as far as saying "[the residents have] been pretty much trapped in their homes." On top of these costs, an estimated $160,000 will be used to replace the police cars that were burned, according to Earls. On a national level, country-wide protests have also called for the need of extra police force in cities such as NYC, Boston, D.C., Seattle, Los Angeles, Baton Rouge, and Austin, just to name a few. Although I don’t have the capacity, or tools to calculate the costs of the extra police forces used after major highways and bridges were blocked off by protestors, we can certainly assume it wasn’t cheap.
What about the future of Ferguson’s economy? Business owners in Ferguson reported a recent loss of up to 80% in sales, according to TIME. A local pastor, Jason Bryant, reported, “people don’t want to come into the area.” The lack of stability is making Ferguson an undesirable place to open up a business, or even move to. This social unrest isn’t going to go away any time soon, according to history. According to research conducted by Victor Matheson of College of the Holy Cross and Robert Baade of Lake Forest College, In the ten years after the 1992 Los Angeles riots, for example, the city lost nearly $4 billion in taxable sales. Granted, Ferguson is a much smaller city that Los Angeles, so the loss in taxable sales won’t be as large, but they will certainly feel the effects.
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