Mississippi Re-Entered Recession, Economists Say
Mississippi re-entered a recession earlier this year, state economist Darrin Webb told legislative leaders.
Mississippi re-entered a recession earlier this year, state economist Darrin Webb told legislative leaders Monday.
"I think Mississippi slipped into recession in the second quarter, and while conditions may have improved somewhat in the third, I think we remain in recession," Webb said during the opening day of week-long Legislative Budget Committee hearings.
Republicans, who now control both chambers of the Legislature and thus the Budget Committee, continued the tradition of hearing from the state's economist before beginning the long task of listening to agency heads and developing a budget. The state economist is crucial to the process because if the economy sours and revenue collections decline, the budget is affected.
Webb didn't have good news. He said there is no official way to determine if an individual state is in recession, but said factors indicate Mississippi is.
"We currently have the same number of people employed in Mississippi as we did in the depth of the 2008 recession," Webb said.
He said state employment rebounded in early 2010 before beginning to decline again during the second half of the year, was flat in 2011 and has dipped for much of 2012. He predicted it will be 2018 before Mississippi regains pre-recession employment numbers.
Webb acknowledged state revenue collections have improved in recent years, but he said the increase has been driven by improved corporate taxes and individual income taxes. Webb reasoned that corporations have cut costs and were now profitable and that people who have jobs might be making more money by working longer hours.
Webb said it has been common for a long time for Mississippi's economy to underperform the nation's.
"We think it has to do with systemic problems," such as a less educated workforce, less health care and more children born out of wedlock. Those factors and others, he said, put a drag on the economy.
Webb predicted the state economy would improve slowly during the duration of the year, but continue to underperform against the national economy.
(c)2012 the Northeast Mississippi Daily Journal (Tupelo, Miss.)