Before the 2000s, Mississippi ranked 14th in economic growth at 2.1 percent. However, this growth has slowed. How can Mississippi get back on track?
Private sector growth carries the greatest potential for state economies, with private-sector job growth being one of the key measurements for economic growth. But in Mississippi, state and federal government have taken the helm as the top sectors in the state. Altogether a poor job has been done in cultivating an environment that promotes economic growth.
The Clarion Ledger reports that in Mississippi, federal, state, and local government spending amounts to 55 percent of the economy. This is the fifth-highest percentage in the nation. This is not an environment that breeds growth. To get Mississippi back on the map economically, limited government and free-market capitalist principles should take the forefront by reducing the government’s size and spending.
According to a study conducted by the Legatum Institute, Mississippi has failed to achieve satisfactory standards of prosperity, especially when compared to other states throughout the United States.
Mississippi has consistently ranked in the ten lowest states over the last ten years in terms of economic quality. This is considering factors such as financial stability, productivity and competitiveness, dynamism, and labor force engagement.
Mississippi’s economic situation has caught national attention as the US News and World Report has similarly ranked it and neighboring states at the lowest in the United States. Many local economies have experienced no growth as employment opportunities, and major industries have dwindled in size. In addition, limited educational resources have made the possibility of innovation stagnant.
The Daily Journal estimates that 19.6 percent (nearly one out of every five residents) of the Mississippi population live below the poverty line. This is the highest poverty rate in the country.
But there is an exciting tomorrow for Mississippi if the right steps are taken. The near future of the state is promising as it leaves the world of Covid. The state’s gross domestic product is expected to rise by 2.8% this year. Such growth has not been seen since before the Great Recession; however, it is expected to plateau within the next few years.
This does not need to be the case. If policy makers want to change the trajectory of their state, it might be time to harness this economic momentum and give the opportunity for economic growth back to the citizens of the state.
Economic growth can only occur if government refrains from drowning it. If the state wants more available capital, encouraging the private sector to grow through tax cuts and regulatory reform, could effectively lower poverty levels -this just might be a better strategy than expanding the government sector.