Payrolls in Mississippi grew in July, continuing a positive trend for the state over the past year. 

The total number of employees on nonfarm payrolls in the state increased to 1,171,700 according to the Bureau of Labor Statistics. That’s an increase of about 1,200 jobs over the past month. These numbers are particularly impressive after the rough start to 2019, with job losses in each of the first three months. 

But that has changed.

Over the past year, the state has added 19,000 jobs. That translates to a 1.7 percent growth during that time period, which is higher than the national average. 

During the previous 12 months, each sector of the economy, as classified by BLS, added jobs in Mississippi. 

Among neighboring states, Alabama has had the highest growth rate, at 2 percent. Tennessee was also ahead of Mississippi at 1.8 percent. Arkansas’s growth rate was 1 percent, while Louisiana’s decreased by 0.05 percent. The Pelican State was the only state in the country to post a loss over the past year. 

But compared to national numbers, Mississippi was ahead of the average, which came in at 1.4 percent. Overall, Mississippi’s growth rate placed the state 17th nationally. 

Job growth among the SEC footprint.

The Business Roundtable, an association that counts among its members the CEOs of some of the largest public companies in America, announced this week a fundamental change in its new definition of the purpose of a corporation. 

Mainstream media genuflected. Milton Friedman rolled over in his grave.  

The Nobel prize-winning economist and best-selling author helped to create the predominant view that the purpose of a corporation, particularly a large, publicly traded one, is to increase its profits. To quote Friedman, “There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”

In fact, the overriding tenet of Corporate Finance, present in every college textbook, states that the role of the finance manager is to increase shareholder value.

Not according to this enlightened group. By their progressive definition, a corporation is not to independently pursue profit, but rather, pursue profit congruous with social good. 

It’s as if the pursuit of profit is somehow immoral and the aim of increasing shareholder value doesn’t require the care of customers, employees, and suppliers and our free market system hasn’t produced more prosperity for more people than any other economic system in the history of humankind.

So who decides the definition of social responsibility? What metrics determine if C Suite execs have achieved annual goals? Profits be damned, we reduced our carbon footprint by 2%, we saved four polar bears, we made the world a better place for our kids by .0002% last year. 

We can only imagine the squishy, subjective claims of success these modern CEOs will announce.

In his monumental essay in the New York Times on September 13, 1970, Friedman said, “The discussions of the ‘social responsibilities of business’ are notable for their analytical looseness and lack of rigor.”

There is also the distinct possibility that the CEOs who endorsed this modern, corporate “manifesto,” which includes 181 of the 188 members of the Business Roundtable, were trying to appease the current wave of the progressive political voices. 

Or a less cynical view might be that it was an attempt to seek relief or approval from the activist investors who constantly agitate public companies through shareholder meeting protests and the like. Both groups have grown more and more hostile to capitalism. If the latter is true, corporate groupthink is worse than we thought. You know what they say, if you give a mouse a cookie, he’ll soon want a glass of milk.

We have seen this experiment into corporate social activism, let’s just call it what it is, with devastating effects to corporate reputation and shareholder value. Starbucks under Schultz, Target Corp., Dick’s Sporting Goods, IBM, Disney’s ESPN, Kellogg’s, etc. The results have been a punishing lesson about mixing non-corporate ideas with P&L statements almost immediately remedied upon backtracking their social initiatives.

In his essay, Freidman’s words were prescient, “This short-sightedness is exemplified in speeches by businessmen on social responsibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of government bureaucrats.”

Abandoning a 50-year-old view on the purpose of a corporation also undermines the belief in markets themselves. On this issue, Professor Friedman offered this dire warning, “the doctrine of ‘social responsibility’ involves the acceptance of the socialist view that political mechanisms, not market mechanisms, are the appropriate way to determine the allocation of scare resources to alternative uses.” 

A simple review of the 20th century should convince us all that’s not a road we want to travel.

Thankfully, a handful of leaders have rebuked the Business Roundtable. The Council of Institutional Investors was one such leader. “There’s no mechanism of accountability to anyone else,” said Ken Bertsch, the council’s leader. “This is CEOs who like to be in control and don’t like to be subject to the market demands.” 

In the Wall Street Journal, Michael Bordo, a Rutgers University economics professor and former student of Mr. Friedman, said the Business Roundtable’s new stance would have corporate executives behave like regulators. “That’s not what business is; that’s what government is,” he said. “I still think Friedman was right.”

However, there is one voice conspicuously absent in the dissent. Where are the independent board members? After all, the CEOs are employees who work at the direction of directors and shareholders. 

The resources these CEOs propose to spend in the pursuit of social good is not their own. Those resources are capital invested by shareholders; not by the growing category of “stakeholders” these modern CEOs seem so intent on pleasing. 

It is the fiduciary responsibility of the directors to protect such assets…and maybe even the entire free market system, too.

This column appeared in FEE on August 26, 2019.

An analysis of data by the Mississippi Center for Public Policy shows that a 15 cent gasoline tax increase would add up to about $123 annually per vehicle and a 20 cent per gallon tax hike would average about $180 annually per vehicle. 

For a family with two cars, that would be in the $250-$350 range each year.

When tallying up the cost of a potential gasoline tax increase on a family of four, the price would be much higher a month than the $6.67 increase cited by former state Supreme Court Justice Bill Waller Jr. 

His tax swap plan involving a state income tax bracket and the gasoline tax also would be only a tax increase on 42.8 percent of the state’s population who aren’t part of the state’s workforce.

Lt. Gov. Tate Reeves said the cost of a gasoline tax increase for a family of four would add up to about $500 per year, but achieving that figure would require three gas-guzzling trucks or heavy SUVs driving about 20,000 miles per year apiece and a gasoline tax of 15 to 20 cents more per gallon.

To calculate the average impact on a Mississippi driver annually, we used the top-selling vehicles in the state from both this year and a decade ago that included:

• 2019 Ford F-150.
• 2019 Nissan Altima.
• 2019 Toyota Camry.
• 2019 Honda Civic.
• 2019 Chevrolet Silverado.
• 2019 Chevrolet Tahoe.
• 2009 Ford F-150.
• 2009 Honda Accord.
• 2009 Honda Civic.

Then we calculated how many miles the average Mississippian drives per year. According to the U.S. Energy Information Administration, drivers in Mississippi traveled 40,877 million miles in 2017, ranking 28thnationally. Divide that by three million (the state’s population) and the average driver in the state drives about 13,625 miles per year. 

We also ran the numbers using 10,000 annual miles traveled per vehicle and 20,000 to see how much of a difference that makes.

Each vehicle’s U.S. Environmental Protection Agency rating for miles per gallon was used to calculate the average MPG that a Mississippi owner of that vehicle might face. 

The figure for MPG wasn’t the overall MPG, but an adjusted total that takes into account the amount of rural roads and highways with higher speed limits (84 percent of Mississippi roads are the responsibility of counties and the Mississippi Department of Transportation) and thus higher gas mileage. 

An owner of a Ford F-150 equipped with four wheel drive and the 3.5 liter turbocharged V-6 and driving 20,000 miles per year would pay $142 more per year and $11.83 more per month if the gasoline tax was increased by 15 cents per gallon.

The owner of a Nissan Altima that gets considerably better gas mileage (32.7999 miles per gallon) and drives 20,000 miles per year would still be higher than Waller’s stated figure at $7.60 per month and $91.47 per year with a 15 cent gas tax hike. 

Jacking up the gasoline tax to 20 cents per gallon would add up to $189 per year and $15.75 per month for the owner of the F-150 who drives 20,000 miles per year, while the Altima owner would pay $10.08 per month and $121 additionally per year.

Using the state Department of Revenue’s numbers on petroleum taxes, each one cent increase in the state’s gasoline tax would add up to about $23 million in additional revenue for the state’s highway fund, which is used for state-maintained roads only.

No tax swap for 42.8 percent of state’s population

Waller says eliminating the four percent income tax bracket and exchanging this for a gas tax hike would not be a tax increase. The problem is two-fold for this viewpoint.

According to U.S. Census Bureau data, the workforce participation rate in Mississippi is 57.2 percent, versus 63 percent nationally. Also, 15.9 percent of the state’s population is age 65 or older. 

This means 42.8 percent of the state’s population is not in the workforce and wouldn’t be subject to income tax, which exempts the first $2,000 of taxable income and taxes the next $3,000 at three percent, the next $5,000 at four percent and all taxable income more than $10,000 is taxed at a five percent rate. 

The state also doesn’t levy an income tax on retirement income, pensions and annuities, so that eliminates any tax relief for those age 65 or older.  

In this edition of Unlicensed, we talk about the Reeves/ Waller debate, Tuesday's runoff, and the direction of the Republican Party. 

Has anything changed during the runoff? Can either Bill Waller or Andy Taggart close the gap in their races?

Voters in both the Republican and Democratic Party will head back to the polls on Tuesday for primary runoffs. 

This will include two statewide races on the Republican side, led by the gubernatorial runoff between Lt. Gov. Tate Reeves and former Supreme Court Justice Bill Waller. Reeves led the pack, picking up almost 49 percent of the vote. Fifty-percent plus one was needed to avoid a runoff. 

Waller finished second with 33 percent of the vote. The third place finisher, State Rep. Robert Foster, endorsed Waller last week. Reeves picked up his own endorsement from an unlikely ally, State Sen. Chris McDaniel.

McDaniel, who nearly toppled Sen. Thad Cochran in 2014, and Reeves have long been at odds despite sharing many similarities when it comes to policy. This has resulted in McDaniel being largely relegated to the backbench in the Senate though he has been a more reliable liberty vote than virtually every other member of the chamber. But for 2019, the two came together. 

“No one has more reason to be displeased with Tate Reeves than I do,” McDaniel said. “But this is not about personalities, it’s about policies… I’m willing to put aside our past because I trust that (Reeves) will govern as a conservative.”

Republicans will also be selecting their nominee for attorney general. Treasurer Lynn Fitch led the field with 44 percent of the vote. Attorney Andy Taggart finished second, outpacing State Rep. Mark Baker by about 4,500 votes. Baker proceeded to endorse Taggart after the first round. 

Republicans in the Northern District will select a nominee for Transportation Commissioner. Voters will choose between John Caldwell, who received about 31 percent of the vote in the first round and Geoffrey Yoste who received 26 percent. 

Democrats in the Central District will choose between Jackson City Councilman De’Keither Stamps and Dorothy Benford for Public Service Commissioner. Stamps received about 40 percent of the vote; Benford 33 percent. 

Along with statewide and regional runoffs, voters in districts throughout the state will also be selecting the Republican or Democratic nominees in a number of House and Senate races. 

House and Senate runoffs

Mississippi occupational licensing burden places it in the top half among the 50 states and the District of Columbia.

According to the non-profit Institute for Justice, Mississippi’s overall burden was ranked 19th overall. California had the highest burden, while Wyoming had the lowest. 

The overall burden combines the number of low-and-middle income occupations, along with other factors including average fees, average calendar days lost, average exams, average minimum grade, and average minimum age. 

IJ reviewed 102 occupations, and Mississippi licenses 66, or about 65 percent of all low-and-middle income occupations. Only 14 states license more occupations. Louisiana and Washington both license 77 occupations, the most, while Wyoming licenses just 26. 

Mississippi does well, however, in the burden required to obtain a license coming in at just 46th. The average fees in Mississippi total $330, while the average days lost is 160. 

Today, approximately 19 percent of Mississippians need a license to work compared to just 5 percent in the 1950s. The net result is that Mississippi has lost 13,000 jobs because of occupational licensing and the state has suffered an economic value loss of $37 million. 

To put that into perspective, just by legislative action to rollback unnecessary licenses, we can create two Nissan plants…without spending a dime of taxpayer dollars.

Instead of relying on government, these are actions that will encourage and promote economic growth in Mississippi. If that is our goal, we need to trust in the benefits of the free market and a “lighter touch” from government and occupational licensing regimes and we need to return to a belief in individual responsibility.

There were no clear winners of Wednesday’s Republican gubernatorial debate, but both candidates were able to clearly differentiate their policy positions.

Lt. Gov. Tate Reeves and former state Supreme Court justice Bill Waller battled over such topics as Medicaid expansion, infrastructure, the economy and teacher pay. 

The most pointed difference of the night was when both were asked what it meant to be a true conservative.

Reeves said being a conservative to him meant limited government, low taxes and more freedom. 

Waller said that his plans were true conservative plans because they were the pillars of economic development and that a true conservative wouldn’t allow 31 rural hospitals to close and choose not to fill teacher vacancies. 

Reeves said that he’s opposed to expanding Medicaid (which he called and has called Obamacare) because it’d mean 300,000 more Mississippians would be dependent on government. 

He also cited information about Louisiana’s disastrous Medicaid expansion, where the number of new signups was vastly underestimated and three in five Louisianans have moved from private to public insurance.

Waller agreed with the 300,000 new Medicaid participant figure from Reeves and countered that information he’d seen from a Brookings Institution study that expanding Medicaid would help Mississippi’s 31 rural hospitals financially. He also said expanding Medicaid would have a billion dollar impact on the state’s economy.

A 2016 study by the Congressional Budget Office throws cold water on that viewpoint, saying that Medicaid expansion would not “substantially alter” the solvency of hospitals nationwide.

On infrastructure, Waller said his plan was a conservative, one-for-one tax swap, eliminating the state’s four percent income tax bracket in exchange for an increase in the state’s gasoline tax. He criticized Reeves about using lottery funds for infrastructure, saying that you can’t build roads on fluctuating revenues.

Reeves countered that a gasoline tax hike would add up to $240 million and that doing a swap would be a net $80 million per year tax hike on working Mississippi families.

Both candidates agreed that a teacher pay hike was needed and both want to increase the average salary to the southeastern average. 

Calls for expanding occupational licensure usually do not come from concerned citizens, but from industry insiders more interested in limiting the number of people who can work in their occupation. 

In 2018, the Mississippi legislature, with little discussion and few dissenting votes, passed a bill to make it more difficult to become a real estate broker. The proposed law sought to increase the time it would take to become a broker, going from the current one year to three years. 

Fortunately, Gov. Phil Bryant vetoed the legislation and it didn’t come back this past year. 

Who were the individuals supporting such legislation? It wasn’t a group of citizens negatively impacted by brokers who had just one year of experience. No, it was, naturally, the Realtors Association. And I am sure they would say they are doing it to protect you and me.  

More recently, the Mississippi Justice Institute filed a lawsuit against the Board of Cosmetology over requirements that eyebrow threaders receive 600 hours of instruction that don’t have anything to do with the practice of threading. 

When WLBT talked with a threader who completed the 600 hours of instruction, her response was that it’s not fair because she had to complete the classes for a license. Relevant or not. 

That’s certainly an understandable position. But the goal shouldn’t be to make the entrance harder for new entrants, but easier for everyone. 

That’s the case whether we are talking about the 66 low-to-middle income occupational licenses in the state or the 117,000 or so regulations in the state’s administrative code. 

A smart policy would start with only choosing licensure when there is empirical proof that it is necessary and there is not a less restrictive approach. 

As for the current licensing schemes, the legislature should begin by repealing unnecessary licenses. And occupational boards should not be in charge of deciding whether a license is necessary. 

Every year, bills to extend the repealer of various occupational boards come before the legislature. They always pass. Usually with no discussion and few dissenting votes. Instead of simply relying on what that board wants, the legislature should use that time to study if a license truly relates to health and safety. 

A great place to review each license would be the Occupational Licensure Review Board, which only has authority over new licenses or regulations. Empower the board to take a hard look at every license, it's need, and how it impacts the economy, for both entrepreneurs and consumers.

If we haven’t determined if a license actually protects us, rather than ceding that power to industry incumbents, we should opt for less red tape and more freedom.

And give more Mississippians the ability to earn a living, even if they don’t have government permission. 

On Tuesday, the Jackson City Council tabled for future discussion a possible lawsuit against the Mississippi Department of Transportation over which entity has responsibility for maintenance of Medgar Evers Boulevard.

Jackson city Councilman Kenny Stokes said at the city council meeting that the city’s legal department could find no record of the city council approving the 1987 deal for MDOT to delegate maintenance of the road to the city. 

Stokes, who represents Ward 3, said if the item wasn’t placed on the city council’s agenda in 1987 and approved, the transfer wasn’t legally valid.

According to maps, U.S. 49’s route merges with Interstate 20 westbound in Richland and follows Interstate 220 north before resuming its northwest route at Medgar Evers Boulevard north of the interchange. 

Medgar Evers Boulevard isn’t marked as U.S. 49 south of the I-220 interchange.

 “I’m real concerned how the 49 highway in Rankin County can get over a hundred million dollars for the stretch from Richland to Flowood and it’s not even going to the school, Piney Woods,” Stokes said. “This is the gateway, the 49 highway, Medgar Evers Boulevard, to hospitals. 

“This is a sweetheart deal in Rankin County and you have a duty not to discriminate with federal funds. We’re also going to ask the U.S. Congress to get involved.”

MDOT is spending $150 million to repair and expand U.S. Highway 49 between Richland and Florence, with a completion date set for next year. The project will expand the heavily-traveled highway to six lanes between the two Rankin County cities with new culverts, curbs and bridges.

According to MDOT traffic counts, some of the intersections on 49 between Richland and Florence average about 42,000 vehicles per day.

The possible lawsuit was also supported by City Councilman Aaron Banks, who represents Ward 6

“If that agreement wasn’t executed right, then the state should be on the hook,” Banks said.

Mayor Chokwe Lumumba said at the meeting that the city’s 1 percent infrastructure sales tax is going to fund a repaving project on Medgar Evers Boulevard.