When news came in last night about the rioting happening in Charlotte, N.C. I was astounded. The place I was born and call home was being torn down by looters and fires being set. It was heart-wrenching to watch and terrifying to see people becoming violent in the streets of a city I have grown to love.
This posting doesn’t aim to incite some kind of comment war, nor is it aiming to make any political point. The fact of the matter is when people riot it affects everyone in ways that are both seen and unseen. The visible ways are along the lines of the damages being caused by riots as well as the general rise in angst between people. What many people don’t see, or think about, are the long lasting effects that rioting has, especially on the economy.
How Riots Affect the Economy
Sometimes riots happen. While many people believe that there are better ways to deal with certain problems there are times where political and racial tensions climb so high that people lash out violently. Until recent years, rioting was not an issue in the United States, however, with political and racial issues escalating more riots have been incited. These riots affect the cities they happen in and the economy as a whole. Here’s how:
People will stop visiting your city for a while. There are studies that suggest the riots in Los Angeles in 1992 cost the city nearly $4 billion in taxable sales and more than $125 million in direct sales tax revenue. Not to mention there was about $1 billion in property damage and lives lost.
Somebody has to pay for it. If you aren’t paying for it immediately, you will be paying for it eventually. When the Los Angeles riots happened in 1992 and the city lost all of that revenue and accrued damages at the same time, taxes went up for citizens of LA. However, Los Angeles hasn’t been the only large-scale riot that has happened.
Other Historical Riots and Costs
There have been numerous other large-scale riots in the United States that have cost the U.S. dearly. According to CNBC, the blackout in New York City in July 1977 was another huge riot that cost the city and the country millions. The blackout occurred and was followed by a riot, mass arson and looting. It cost the city close to $300 million in damage and loss.
In 2001, there was a huge riot in Cincinnati. It was the largest riot since the 1992 LA riots. It was a reaction to the fatal police shooting of 19-year-old Timothy Thomas. After three nights, the rioting ceased. The damages totaled to about $3.6 million.
Even more recently, in 2015, rioting in Baltimore cost the city $20 million. Baltimore citizens were rioting in reaction to the death of Freddie Gray while in police custody. The $20 million it cost for the city to restore itself did not include any damages to private businesses.
The Aftermath of a Riot
When discussing the aftermath of a riot you can’t skip talking about the sense of calm that is restored after a riot. Although the problem isn’t likely solved, people feel a little better for the time being. Many people talk about the physical damages but they skip the economical damages of a riot.
There are damages to property and damages made to the economy when a riot is incited. Damages must be paid for and fixed. Many small business owners who are looted must pay for their own repairs or pay a higher insurance premium because of the riots. Some small business owners are forced to close their doors because they are unable to pay for the repairs and lost product that the riot caused.
Rioting causes nervous investors and tourists. If a company is looking to come to your city they may change their mind due to rioting. Likewise, tourists will stop visiting your city if a riot is started there. People don’t want to invest time or money in a place that does not seem consistent or safe.
How Charlotte Will Be Affected
The bad news for Charlotte is that the city has already lost a significant amount of revenue due to the HB2 bill. Many businesses have pulled out of Charlotte or decided not to open up in Charlotte due to that bill. Now, because of the riots occurring in the city, Charlotte will likely see even more decline in revenue for the city.
Local businesses opened up this morning and cleaned up any damages made by rioters last night and were able to recover. If the riots continue, however, Charlotte’s economy could take YEARS to recover.
Financial crisis come from many things, check out these other articles so your ready for the next one.
What do you think about the rioting in Charlotte and the affects it will have?
Enjoy Plunged in Debt?
Subscribe to get our latest content by email.