When the two highest-profile potential candidates for the gubernatorial race in 2019 spoke at Founders Square at the Neshoba County Fair on August 1, Lt. Gov. Tate Reeves and Attorney General Jim Hood painted two very different views of the state of Mississippi’s economy and future prospects.
Reeves made it clear that under Republican leadership of the Legislature and the Governor’s Mansion, things are improving with GOP policies.
The Democrat AG said that the economy is anemic, job seekers have given up looking for employment and the state is being lapped on the track by its neighbors in terms of growth.
Both are right and both are wrong.
Hood said that, despite record-low unemployment rates, the labor force participation rate has declined. That’s not true, as the labor force participation rate — which is defined as the number of people available for work as a percentage of the total population — has increased since 2014, according to data from the U.S. Bureau of Labor Statistics.
In 2014, 73.4 percent of Mississippians participated in the labor force. By 2016, that number increased to 76.9 percent.
However, Hood is correct about the state’s dismal economic growth. Per capita personal income has increased 2.2 percent from 2007 to 2017, while the rest of the nation’s per capita income has grown at 2.4 percent. The state’s gross domestic product grew at only 0.3 percent between 2007 and 2017, while the rest of the nation grew at a 1.2 percent rate.
Reeves extolled the low unemployment rates and the shrinkage of state government in Jackson. While the number of state employees has declined under Republican stewardship, annual budgets increased every year except the last two, when legislators finally put the brakes on spending thanks to declining state tax revenues.
The state’s general fund budgets — which don’t include the massive, annual influx of federal funds to help with Medicaid and other programs — increased 25 percent between 2012 and 2017 after the GOP took charge of the Legislature. Much of that was due to annual increases in Medicaid, of which the state’s portion hit the $1 billion-mark last year.
Contrast that with the nation’s rate of inflation, which only grew between 3 percent and 2.5 percent during that time.
State policymakers need to do a serious evaluation of the state’s economic path and find solutions to help grow a robust private sector economy that gives all citizens a chance to find meaningful work. Paring back occupational licensing cartels, overhauling the tax code, eliminating corporatist privileges to the few and cutting the size and scope of state government are some of the steps that can be taken to help “rise the tide to lift all boats.”
Hopefully, the state’s new leaders elected in November 2019 will be up to the challenge. If not, the status quo at the bottom is where Mississippi will remain.