Mississippi has lost $1.09 billion in wealth transfers to other states dating back to 2010. This is a change of negative 2 percent, ranking 30th nationwide, according to analysis of IRS data from the Illinois Policy Institute. Arkansas had a small decline of $287 million, while Louisiana lost $2.49 billion.
Alabama ($471 million) and Tennessee ($7.14 billion) both had positive transfers of wealth. Florida had the highest wealth transfer, both in terms of actual dollars ($88.95 billion) and percentage gain (20%).
Wealth transfers and population shifts go hand-in-hand.
Mississippi’s population declined by 4,871 last year. Mississippi and neighboring Louisiana, which saw a decrease of 10,896 residents, are the only states in the south to lose population over the past year. This is a continuing trend. Mississippi lost more than 3,000 residents the year prior.
But every other southern state south of Virginia (not named Louisiana), had positive domestic migration numbers last year. Some smaller, like 0.8 in Arkansas, some larger, like 10.3 in South Carolina. This is the difference between a positive and negative wealth transfer for a state.
Mississippi is in a dangerous cycle, but it is one that can be corrected. There are policies the state can adopt that would put Mississippi ahead of the curve when it comes to national policy and positioning the state to be competitive nationwide.
For starters, Mississippi needs to move away from a desire to overregulate commerce and embolden government bureaucrats. Mississippi has more than 117,000 regulations that cut across every sector of the economy. A successful model to stem this growing tide would be a one-in, two-out policy where for every new regulation that is adopted, two have to be removed. If a regulatory policy is so important, let’s make the government prove it.
The Trump administration adopted a similar executive order in 2017, and the numbers show we are actually seeing decreases greater than two-to-one, and these are not insignificant regulatory reductions.
This could be particularly beneficial in healthcare and tech policy. No department regulates more than the Department of Health, but our goal should be a push toward free market healthcare reforms that encourage choice and competition. In tech policy, the state has the opportunity to be one of the first states to essentially open the door for innovation, rather than one where entrepreneurs need to seek permission from the state. If Mississippi wants to get in the technology world, and we are convinced this is essential, a permissionless innovation policy in healthcare would be a big step in the right direction.
We should also not require people to receive permission from the state to work when they do move here. Open the door to productive citizens by allowing for universal recognition of licensing, following the path paved by Arizona. If you have been licensed in one state, that license should be good in Mississippi. Again, we could be ahead of the curve.
At the same time, our occupational licensing regime should be reviewed. Today, 19 percent of Mississippians need a license to work. It was 5 percent in the 1950s. While there are some occupations where a license is obviously prudent, we’ve expanded into far too many occupations.
This serves to lower competition and increase costs for consumers, while not providing those consumers with a better product. Occupational licensing is an example of how Mississippi misses the opportunity to grow her economy by acting in defensive ways to protect the slices of our economic pie for the well-connected when the reality is we could create a much bigger economic pie if we encouraged more creative disruption, competition, and risk-taking.
Finally, Mississippi needs to shed its abundant reliance on government and the public sector. Whether for public assistance, grants, contracts, jobs, or specific tax breaks, the citizens and companies in Mississippi are too dependent on state government. And the state is too dependent on the federal government. We have the third highest level of economic dependence on federal grants-in-aid in the nation (43%) and the fourth highest level of our economy driven by the public sector in the country (55%). Politicians, state agency directors, and government bureaucrats cannot create the economic growth we need. They can, however, work together with our various representatives and create an environment that allows and encourages private economic activities. Ultimately, with such an environment, it will be the entrepreneurs, business owners, productive workers, creative disruptors, capitalists, managers, and consumers who deliver the economic growth we all seek.
Mississippi can share the success of our neighbors. It will just take work.