Study shows Miss. near top in per capita income growth
Published 9:08 pm Friday, March 28, 2008
New federal figures show Mississippi still has the lowest per capita income in the nation, despite having the third-highest rate of growth for the figure in 2007.
Preliminary estimates released Wednesday by the U.S. Bureau of Economic Analysis said Mississippi had 6.7 percent growth in per capita income. Louisiana has the highest growth rate, at 9.2 percent. New York was second with 7.6 percent.
Mississippi’s per capita income was $28,845. It trailed West Virginia by $692.
Nationally, the per capita income was $38,611 at a 5.2 percent growth rate. Connecticut had the highest per capita income at $54,117.
Mississippi’s rate has increased about 19.5 percent since 2000, when Republican Gov. Haley Barbour took office. The governor said the new report shows that trend is continuing.
“We are replacing low-skill, low-wage jobs with high-skill, high-paying jobs,” Barbour said.
Patrick Davis of Gluckstadt said he and his wife have maintained their lifestyle despite the poor national economy.
“Percentagewise, the family income is probably down 10 percent,” he said.
Davis said part of that is his 6-month-old son. Diapers, food, baby clothes — all these things add up. Overall though, Davis said, his family hasn’t had to forego much.
Phil Hardwick of Mississippi State University’s Stennis Institute for Government said that while Mississippi’s growth was good news, it was not as good as it seems.
A significant portion of the increase is connected to about $1.5 billion in federal housing subsidies the state received, said Kathy Albetski, an economist with the U.S. Bureau of Economic Analysis.
The report estimates the housing money contributed about $530 to per capita income in 2007. Take that amount out of the equation and the state’s growth rate would have been 4.7 percent, ranking Mississippi 33rd with Florida, Ohio, and West Virginia.
“Mississippi has had positive growth. We are not in the top 10 because we have a $530-per-person subsidy,” Hardwick said.
Some experts caution that future growth may be slowed by the shrinking amount of dollars coming in because of Hurricane Katrina.
The days of double-digit increases in state tax revenue are gone, Barbour said, and state tax revenue should grow about 3.9 percent for the fiscal year ending in June. He said next year’s growth is going to be lower.
“At the same time, you have a national recession across the country,” said Marianne Hill, senior economist with the state College Board. “The slowdown is trickling to Mississippi.”
The state doesn’t have the flexibility to lower interest rates or offer a tax rebate like the federal government, Hill said.
Barbour believes the state is positioned to survive the national economic downturn better than others. He said the state has a strong presence in energy, defense, aerospace and the service industry. About 20 percent of the work force is in the financial services industry, he said.
“We have record employment,” Barbour said. “And that doesn’t count one job at Toyota, that doesn’t count one job at PACCAR or one job at PSL.”
Toyota is building a $1.3 billion automobile manufacturing plant in Blue Springs in northeast Mississippi that is scheduled to open before the end of 2009 and employ 2,000.
In addition, a $400 million PACCAR diesel-engine plant in Columbus will start production by 2010 and employ 500 workers. PSL North America is a new company that will build large diameter line pipes at a site in Hancock County and will have 275 jobs with salaries averaging around $55,000 annually.