St. Louis Economy: Healthcare, Logistics, and Bi-State Trade-offs

The St. Louis metro area — formally St. Louis, MO-IL, which stretches across the Mississippi River into Illinois — is one of the larger metros in the Midwest and the corporate hub for a wide stretch of the central United States. It is anchored by a major healthcare and biosciences cluster, a long history of agriculture and food processing, a defense and aerospace workforce that grew up around Boeing's St. Louis operations, and a bi-state geography that shapes the metro's economy in unusual ways.

This is a plain-English tour of how the St. Louis metro economy works. For the state-level picture, see Missouri Economy. For the country-level view, see The State of the U.S. Economy and the broader Economy hub and city cluster.

How big is the St. Louis metro economy?

For example, recent metro GDP for St. Louis, MO-IL has run around $190 billion, according to the Bureau of Economic Analysis. Metro population is roughly 2.8 million, per the U.S. Census Bureau. That makes the St. Louis metro larger by population than 16 of the 50 U.S. states.

The biggest industries

A handful of sectors do most of the work in the St. Louis metro economy:

• Healthcare and biosciences — BJC HealthCare, SSM Health, Mercy, and Washington University School of Medicine together employ huge numbers of workers across the metro. The Cortex Innovation Community in Midtown anchors a growing biosciences cluster.
• Defense and aerospace — Boeing's St. Louis operations build the F-15, F/A-18, and other military aircraft, and a long supplier chain serves the plant.
• Agriculture and food processing — Bayer Crop Science (formerly Monsanto) is headquartered in nearby Creve Coeur, and Anheuser-Busch InBev runs its U.S. operations from St. Louis. The metro is a major hub for animal-health and ag-tech firms.
• Finance and insurance — Edward Jones is headquartered in suburban Des Peres, anchoring a meaningful financial-services workforce. The Federal Reserve Bank of St. Louis adds a research and policy presence.
• Trade and logistics — the metro sits at the confluence of the Mississippi and Missouri rivers, with major rail and barge operations moving grain, coal, and manufactured goods.
• Higher education — Washington University, Saint Louis University, and the University of Missouri-St. Louis anchor faculty and staff workforces.
• Manufacturing — chemicals, beer, packaging, and specialty industrial production are still meaningful employers.

Jobs and wages

Metro labor data is published by the Bureau of Labor Statistics Midwest region. For example, the St. Louis metro unemployment rate has typically run close to or a tick below the national average, helped by the steadiness of healthcare and the metro's diversified industry base.

Missouri sets a statewide minimum wage that is above the federal floor of $7.25, and Illinois sets a higher state minimum that applies in the Illinois portion of the metro. The City of St. Louis previously set a higher local rate that was later preempted by state law. The latest rates are at the Missouri Department of Labor and the Illinois Department of Labor.

Cost of living

St. Louis's cost of living is among the most affordable of any large U.S. metro. For example, recent HUD Fair Market Rent for a two-bedroom in the metro has run around $1,200 a month, with Clayton, the Central West End, and parts of St. Charles County higher and north St. Louis County and the Illinois side lower. Current county-level numbers are at HUD User.

The federal government tracks region-specific inflation data through the BLS Midwest region. St. Louis's CPI tends to track close to the national average month to month.

Taxes in St. Louis

Missouri has a progressive state income tax with a relatively low top rate, and the City of St. Louis levies its own earnings tax of 1% on residents and on people who work in the city. Combined sales tax in the City of St. Louis is around 9.7%, made up of the state's 4.225% base plus city and county pieces. Illinois portions of the metro pay Illinois state income tax instead. State rules live at the Missouri Department of Revenue, and you can read more about how sales tax works in our glossary.

How the St. Louis metro fits into the national picture

St. Louis sits at the geographic center of the U.S. economy, which has shaped its history as a transportation, agriculture, and manufacturing hub. The metro's growth has slowed compared to Sun Belt metros, but its broad industry mix — healthcare, biosciences, defense, agriculture, and finance — has kept it from becoming dependent on any one cyclical sector. The result is one of the more recession-resistant large metros in the country.

Bi-state geography

St. Louis is split between Missouri and Illinois by the Mississippi River. The City of St. Louis is its own independent city, separate from St. Louis County. Workers commute across both the river and the city-county line every day for jobs. That fragmentation makes coordinating regional economic policy unusually hard, but it also gives the metro multiple tax and regulatory environments within a 30-minute drive. Federal data on the bi-state region lives at the BLS Midwest region.

A note on the numbers

Numbers in this article change every quarter — always check the latest from BEA, BLS, and HUD User for the most current data on the St. Louis metro.