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Here's how gun violence holds back local business growth

Nov 17, 2016

Gun violence can have a devastating impact on both individuals and society as a whole.

Trauma from gun injuries and homicides imposes heavy social and psychological burdens, and gun violence costs American taxpayers about $229 billion every year, according to Mother Jones.

But a recent analysis from The Urban Institute found gun violence also impacts economic activity at the neighborhood level.

Researchers analyzed data from a recent longitudinal study that found "neighborhood-level economic activity affects conditions that make crime more likely and that violent crime can decline the same year economic activity increases."

For its analysis, The Urban Institute wanted to know if gun violence impeded business growth in neighborhoods in six cities: Baton Rouge, Louisiana; Minneapolis, Minnesota; Oakland, California; Rochester, New York; San Francisco, California; and Washington, DC.

Preliminary data from three cities shows a striking relationship between gun homicides and economic activity at the neighborhood level. According to the report:

  • In Minneapolis, one less gun homicide in a census tract in a given year was statistically significantly associated with the creation of 80 jobs and an additional $9.4 million in sales across all business establishments the next year.
  • In Oakland, every additional gun homicide in a census tract in a given year was statistically significantly associated with five fewer job opportunities in contracting businesses (businesses losing employees) the next year.
  • In Washington, DC, every additional gun homicide in a census tract in a given year was statistically significantly associated with two fewer retail and service establishments the next year.
  • Examining the relationship between gunshots in a given year and employment and sales in establishments that same year, we also were able to show that for Washington, DC, census tracts covered by ShotSpotter sensors, 10 fewer gunfire incidents in a census tract were significantly related to the creation of 20 jobs in new establishments, one new business opening, one fewer establishment going out of business, and $1.3 million more in sales at new establishments.
  • According to a subset analysis of census tracts across all three cities that experienced a surge in homicides in 2011, controlling for existing levels of violence, we found that these surges were significantly associated with an increase in contracting businesses.

Conversations about reducing gun violence typically center around issues of safety. But the decreased investment in communities and stagnant local economies that could also result, contribute to the continuing cycle of poverty - making the local economic perspective an important part of the conversation.

You can read the preliminary report from The Urban Institute here. A final report from the Justice Policy Center will be released in early 2017.