Mississippi facing slowest growth in fifty years
Mississippi’s population has almost stopped growing for the first time in 50 years. Mississippi has grown less than .7 percent since the year 2000.
Granted, our surrounding states are not booming either. The average growth of Mississippi’s four contiguous states is just three percent. Still, Mississippi is doing the worst of all.
If Mississippi were growing as much as its neighbors, we would have an extra 69,000 residents.
Growth in the United States over the last six years has been 4.7 percent. Growth in Texas has been 10.8 percent - 2.7 million people. That’s almost as much as the entire population of Mississippi.
Mississippi ranks 41st in population growth since 2000 compared to other states, based on U.S. Census estimates.
By comparison, Tennessee is growing quite nicely at 4.8 percent, 20th fastest in the nation. Louisiana grew 3.3 percent. Arkansas 2.1 percent and Alabama 1.7 percent.
In addition to population, other Mississippi economic and demographic indicators don’t look so hot. The U.S. Bureau of Labor Statistics released a report last week showing only 52.8 percent of Mississippians work, the second worst in the nation. Only West Virginia is lower.
That means almost half of Mississippians are either retired, in school, disabled or discouraged from finding work.
Even so, Mississippi’s unemployment rate has improved from 6.4 percent last year to 5.8 percent right now. The national unemployment rate is 4.9 percent.
State economist Darrin Webb presented a state economic report to the Legislature this month. There is both positive and negative in his report.
The worst news is the Mississippi inflation-adjusted gross domestic product (GDP) is lower than it was in 2008. We are just now recovering from the Great Recession. Mississippi’s GDP is about $95 billion. That puts us on par with Hungary, Ecuador, Angola and the Ukraine, all of which have much higher populations.
Mississippi median household income is 74 percent of the national average. Factoring in our lower cost of living makes this better. In that case, we are 85 percent of the national average.
Mississippi’s per capita GDP is on par with Germany, England, Israel, Denmark, Finland and Japan. It is higher than France, Spain, South Korea, Saudi Arabia, Italy and New Zealand.
Webb’s legislative report states, “Mississippi was not hit as hard in the recession as other states. However, the state’s recovery has been much slower. Mississippi’s slower growth persisted into 2016. Mississippi is one of eight states where the December 2016 employment was below that of December 2007.”
According to the report, there are 2.6 percent fewer jobs in Mississippi today than in 2007. Only New Mexico and Maine have fared worse.
“Mississippi grew at a relatively steady pace prior to 2000. Since 2000 the state has struggled to gain momentum or keep pace with the nation. The nation has especially outpaced the state since the 2008 recession,” the report states.
Some other facts from the report:
l Since 2000, Mississippi has lost 100,000 (almost half) of its manufacturing jobs while the other sectors have grown slightly.
l 40.6 percent of income in Mississippi comes from the government – 26.3 percent is from transfer payments and 14.4 percent from government jobs.
l 18.6 Mississippi households are headed by women compared to the 13 percent national average.
l Workforce participation rates are highest in the 25 to 55 age group at just less than 80 percent. From ages 55 to 64, workforce participation is about 50 percent and about 15 percent after the age of 65.
l Mississippi has struggled since the Great Recession.
– 2016 is the first time the state has experienced two years of consecutive growth since the recession.
– The strong headline growth of 2016 was driven by ag volatility, which will shave off growth in 2017.
– Growth in 2017 however will be more widespread and will continue into 2018 at a modest pace.
l Despite a modest forecast, revenues have disappointed in FY 2017.
So why is our state barely growing at the slowest rate in 50 years? Here are some of my thoughts:
l Much of the U.S. growth is in megalopolis areas such as the Houston-Austin-San Antonio triangle, the research triangle in North Carolina and huge urban areas such as Denver. Mississippi doesn’t have one large city.
l Mississippi has always depended on federal dollars, getting two dollars coming in for every one dollar going out. The state shift to the anti-government Republican Party has reduced the federal money. For instance, Mississippi, along with 19 other states, has been turning down a billion dollars a year in federal money to expand Medicaid. Of these 19 states, only five are in the top half nationally in population growth.
Mississippi hospitals have always depended on federal reimbursements for uncompensated care of the poor. These reimbursements are being cut because of Medicaid expansion. Several rural hospitals have closed. The University of Mississippi Medical Center is facing $35 million uncompensated care cuts which the expansion of Medicaid is supposed to replace. The effects are felt statewide since in many communities the hospital is the largest employer.
l Mississippi has blown its tax-break wad on a handful of big companies while neglecting its grassroots industries and employers. Instead of paying an exorbitant amount per job on popular mega-deals, the state should have a reasonable job growth incentive package that applies to all employers both big and small on an equal basis.
l The decline in oil prices and offshore drilling has hammered Mississippi. Thousands of high-paying offshore oil jobs have been lost.
l The rise of the internet and online sales has hurt rural areas. Retailers now have to compete against both Wal-Mart and Amazon. Money is sucked out of Mississippi and goes to the Silicon Valley. The tax-free nature of online sales is damaging our retail industry.
l High electricity rates for the one-third of Mississippi served by Mississippi Power is making that area of the state uncompetitive. This could become even worse if more of Kemper is placed on the backs of ratepayers.
l Skilled labor is at a premium. As big metro areas approach full employment, they are luring skilled Mississippians from the state with big salary increases. Mississippi’s low education status is a competitive disadvantage,
l Our weak procurement and bidding laws raise the cost of government and lower our standard of living. Crony capitalism scares away legitimate industries.
l Our state flag’s incorporation of the rebel flag gives our state an image of being backward and intolerant. It drives people away and hurts industrial recruitment.