Mississippi's greatest asset is its people. Mississippians come from a rich heritage of music, literature, sports, art, and cultural diversity.
But the state suffers economically. Mississippi was a wealthy state in the days of cotton plantations, but it has failed to develop a robust modern economy. Much of the state's money comes from federal subsidies and grants.
To move forward and decide how best to grow Mississippi's economy, we first must look at an accurate assessment of where we are now.
Agriculture still plays a role in the state's economic production, but it is minimal at 2.1%. Besides cotton, "soybeans, corn, rice, ... sweet potatoes, peanuts, hay and wheat are significant crop contributors," while "poultry ... forestry ... [and] fishing" also contribute to the agriculture industry.
In comparison to agriculture, manufacturing is one of the largest private industries in the state, employing over 170,000 workers and making up 17 percent of its economic output. Real estate, retail, and healthcare follow the manufacturing industry, with 9.1%, 7.9%, and 7.4%, respectively. These four industries, however, take second place to the prominence of government, which tops the list at 18.5 percent of the state's economy.
As evidenced in the following list, Mississippi's gross domestic product, or gross state product (GSP), lost major ground in 2009 after the Great Recession hit America the year before (in billions of dollars):
Recent economic projections show that the GSP should improve a bit in the coming years. Despite these hopeful signs, the state's economic growth will likely remain at a lower rate than the national average.
In terms of unemployment, Mississippians saw a rapid increase of job losses after the financial crisis of 2008. The rate of job loss began to slow in 2010, but economic forecasts through 2015 still predict that the Mississippi unemployment rate will remain above the national average. Bad as it is, the state's unemployment average pales in comparison to the rates some individual counties experienced in recent months. Indeed, Clay County posted a 20% unemployment rate in July of 2011.
Additionally, Mississippi has a rather high poverty rate. According to Dr. Marianne Hill, in 2008 nearly one out of every five Mississippians lived in poverty. In 2010, the median income in Mississippi was slightly above $35,000, making the state the poorest in the United States. This low income level is likely the reason why Mississippi also has the highest food stamp usage in the nation (21% of the state's population).
The state is also performing poorly on various measures of educational attainment. According to one source, "Mississippi has a level of educational attainment far below the national average—and lower salaries to match it." Although Mississippi does have a fair amount of college graduates, over 45% of its white adult population and 60% of its African-American adult population only have a high school degree - or less. Furthermore, the state's ACT "composite score of 18.7" is several points below the national average.
Mississippi does have low state and local tax rates as well as a low corporate tax rate and a business-friendly environment that is not overly regulated. These are key factors necessary for economic growth. Additionally, Mississippi is a right-to-work state, meaning workers cannot be forced to join unions.
Large amounts of federal funds have been directed to the state through the years: Mississippi receives over two federal dollars in return for every dollar it pays into the federal tax system.
But Mississippi's government subsidies extend beyond welfare programs. Indeed, "generous government subsidies" have been a big factor in drawing many green energy companies to the state. For the promise of more than 4,500 jobs the Mississippi Legislature approved $400 million in subsidies for the following green energy companies between 2010 and 2011:
The promise of an economic boon from green or clean energy jobs, however, might not be as rosy as it appears. Indeed, the costs of actually using the renewable energy may be more than the state's citizens can handle. Creating successful renewable energy companies is not always easy either, and new Mississippi companies such as solar-panel manufacturer Stion may be facing more worldwide competition than they can handle. Due to the startup nature of renewable energy companies, many of those attracted to Mississippi through state subsidies have a high likelihood of failing. Indeed, the rule of thumb is that all tech startups have a 90 percent chance of failure. Some solar startups, in particular, have gone bankrupt, such as Evergreen Solar, idespite the state of Massachusetts investing $50 million into the company.
Additionally, some of the renewable energy projects lured to the state by former Governor Haley Barbour have raised questions of crony capitalism. Barbour has been known for lobbying for oil companies via the D.C.-based firm BGR Group which he helped found. Barbour's push for the Kemper County clean coal plant has also been connected to his lobbying activities on behalf of Southern Company, a client of BGR Group. In 2012, the Mississippi Supreme Court declared that the continued construction of the Kemper County plant "failed to satisfy state law that the plant would benefit the utility's customers."
Using a variety of charts, quotes, commentary, and primary documents, this topic describes the past, present, and possible future of Mississippi's economy.
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