In recent years, Mississippi has attracted large employers like Nissan and Toyota with great fanfare. And it seems like every week or so one sees headlines announcing the opening of a customer service call center in Hattiesburg or the expansion of a furniture factory in Nettleton. These are unquestionably good things for our state, but it is important to keep these headline-grabbing developments in the context of broader labor market conditions in Mississippi:
- The unemployment rate (9.1 percent) is the third-highest in the nation.
- The employment-population ratio (53.9 percent) is the second-lowest in the nation
- The labor force participation rate (58.4 percent) is the third-lowest in the nation.
- The youth unemployment rate (22.9 percent) is tied for the highest in the nation.
- Mississippi is the only state in the South to have experienced net outmigration since 2010.
- There are fewer jobs in the state now than there were in November 1997.
That last point is especially useful for getting an idea of where our state?s economy stands: there were more jobs in Mississippi when the movie Titanic premiered than there are now. Let that sink in. (No pun intended.)
Despite fairly solid job growth over the last year or so, Mississippi has only just regained enough jobs to bring employment back up to levels seen more than 15 years ago. In April, there were 1,119,300 jobs in Mississippi, slightly fewer than there were in November 1997. Once you consider the population growth of more than 250,000 over the same period, it becomes clear that the state is in even worse shape than that.
While the jobs picture in Mississippi is pretty bad?see below for comparisons to other states?at least employment is on an upward trend of late, and as employment increases, so too will the state?s overall unemployment rate, the employment-population ratio, and the labor force participation rate. Much more troubling in the long run is Mississippi?s high youth unemployment rate. The jobless rate for those ages 16 to 24 was 22.9 percent in 2012, and it has been stubbornly stuck above 22 percent for three straight years now?not a situation likely to tempt young Mississippians to stay in the state.
It is easy to attribute the state?s stagnant job growth and high youth unemployment to the recent recession, to view them as aspects of a larger nationwide problem. To some extent they are, and the recessions are clearly visible on the graphs above, but comparisons with other states in the South and the nation as a whole paint a dismal picture of the labor market in Mississippi.
While Mississippi has experienced zero net job growth since November 1997, the nation as a whole has gained 11.3 million jobs (an increase of 9.1 percent), more than half of which were in the South. Employment in most states showed an upward trend over this period, while in a few, it held steady or even declined. With the notable exceptions of Mississippi and Alabama, however, all states with zero or negative net job growth since the late-1990s were located in shrinking industrial regions in the Midwest and Northeast.
These other states are following national and historical trends. As employment has shifted out of manufacturing and into services, states with a heavy share of employment in these formerly large industries?like Michigan and Ohio in the Midwest and New England states in the Northeast?have lost more jobs relative to non-industrial states. There has been a steady trend since at least the 1990s of such states experiencing employment declines and outmigration. An evolving economy will see this sort of phenomenon from time to time, just as workers moved to cities a century ago as the U.S. evolved from an agricultural economy into an industrial economy.
The problem is Mississippi is not one of these states, yet it still has experienced stagnant job growth and outmigration. Moreover, this has occurred despite the recent surge of immigration to the American South. Since 2010, more than 750,000 people have moved from other parts of the country to the South, and another 700,000 have moved to the South from other countries. Yet Mississippi is the only southern state not to have shared in these gains, experiencing a net outmigration of more than 6,500. The absence of clear economic or geographic reasons for these migration and employment patterns in the state is worrisome.
High youth unemployment will only exacerbate Mississippi?s migration problem and jobs outlook. The lack of job opportunities for young people just entering the labor market can lead to lower future wages and lifetime earnings and unsatisfying career choices, and high youth unemployment is a major channel through which recessions can have long-term negative effects.
The jobless rate among young people in Mississippi is far above that of the nation as a whole or the South (16.2 and 16.3 percent, respectively), and it is even higher still than the combined youth unemployment rate in its four neighboring states (15.6 percent). The national youth unemployment rate reached an all-time high of 18.4 percent in 2010, a figure nearly identical to Mississippi?s average rate over the last decade (18.2 percent). The dire labor market situation facing young Americans at the depth of the Great Recession was no different from that faced in an average year by young Mississippians. Youth unemployment in 2012 in Mississippi was about the same as in the European Union (22.8 percent), but our state is not facing any of the obvious difficulties Europe is.
More than 15 years of stagnant job growth, substantial out-migration, and the highest youth unemployment rate in the nation should be seen as warnings to policymakers of a difficult future ahead for Mississippi?s economy. With young Mississippians facing a difficult present and an uncertain employment future, with job growth only just beginning to pick up, with the state being unable to attract new residents, there is little reason to think that the state?s economic future will be much brighter without significant policy changes. Predicting the exact course our state?s future will take is impossible, but a continued existence of being near the bottom in almost every category of state rankings is a real possibility.
I point all this out not to shame our state, but rather to call Mississippians to action. Such a dismal future is not unavoidable. But it will require bolder policy actions and experimentation than politicians have typically demonstrated a willingness to consider.