Gun Violence Slows Economic Growth


Employment Growth versus Homicide Rate in Minneapolis

Downtown Minneapolis is a bustling stretch with many stores, restaurants, bars, and a large baseball stadium. A Four Seasons hotel and new apartment building are in progress, aiming to bring an influx of new potential consumers. However, business owners are concerned about crime. Tom Hoch, the CEO of Hennepin Theatre Trust in Minneapolis laments that crime “undermines everything else we are trying to do. We are trying to create a 24/7 city. We want more people to live downtown, and we can’t be successful if we can’t get a hold of this. People don’t feel like the sidewalk they’re on is open and welcoming.”

The Warehouse District Business Association (WDBA) of downtown Minneapolis is concerned about recent shootings nearby. The most recent shooting in the Warehouse District occurred on April 2nd. This was not an isolated incident. There were two shootings in January, one in last December, and another last October.

A recent study by Yasemin Irvin-Erickson at the Urban Institute examines the effect of increased gun violence on the local economies in Minneapolis, Oakland, and Washington, D.C. They find that gun violence impacts the number of businesses in an area, along with employment and sales by these businesses.

One fewer instance of homicide in Minneapolis was associated with the creation of 80 jobs and $9.4 million in sales across all businesses. For every gun homicide in Oakland, there were 5 fewer job opportunities the following year. In the above map of Oakland, the areas outlined by magenta experienced the most gun homicides in the city. Many of those areas of high gun violence also experience below average employment growth. And finally, in Washington, D.C., 10 fewer gunfire events in a year were strongly associated with 20 new jobs, a new business, one fewer business closure, and generated $1.3 million more in sales at new establishments.

These results are consistent with past research showing that violence leads to a decrease in business revenues and constrains business activities. It can also lead to a drop in property values. Increases in violence can result in businesses scaling back and discourage new businesses from taking root.

Supporting a vibrant economy is yet another reason why it is important to reduce gun violence.

Databyte and Gifs via Is Gun Violence Stunting Business Growth? Urban Institute.