BY: Claudia Williamson
Growing-up in West Virginia, we’d always joke “at least we have Mississippi.” From education to health to economic opportunity, West Virginia and Mississippi have long battled to stay out of last place. I’m now proud to call Mississippi my home and dismayed that the steps to improve our standing in all of these areas are right in front of us, if only we’d take action.
The latest Economic Freedom of North America report, which measures and ranks all 50 U.S. states in economic freedom levels, is a useful guide in helping Mississippi identify areas in which the state must improve economic freedom and, in doing so, improve opportunity and quality of life for Mississippians.
According to the report, over the past five years, Mississippi has been declining in economic freedom, landing at 48th. The main drivers of the downward trend are an increase in size of government and restrictions on the labor market.
The term economic freedom describes the degree to which individuals can live their lives and make personal choices without government intervention. The effects of Mississippi’s restrictions on freedom and personal autonomy are real and they are harsh: Mississippi is the poorest state in country, the unemployment rate has remained more than 7 percent since 2009, it ranks 43rd in educational standards, and it is the unhealthiest state in the country. Increasing the opportunities Mississippians have to improve their lives through economic freedom will go a long way in improving these statistics.
Research shows us that economic freedom works. On average, people living in freer states are more than $6,000 richer than those in the least free. And, the differences for Mississippi are even more drastic. We need only to look at our neighbor, Louisiana, which has become one of the freest states in the country by reducing the tax burden and size of government. As a result, the average Louisianan is more than $20,000 richer than the average Mississippian!
The difference is even more striking when comparing Mississippi with Texas, the freest state in the country. Texas’ average GDP per person is more than $56,000 compared to Mississippi’s average of $34,000. Total employment in Texas increased by more than 7 percent over the past five years, while Mississippi lost jobs during the same time period, making its unemployment rate higher than any other U.S. state.
The reason for this grim picture is straightforward: Mississippi’s economy is handcuffed by a massive government that implements heavy cost and regulatory burdens on its people. State and local government spending is higher and growing faster compared to other states. When government imposes restrictions on choices, people have less economic freedom.
Mississippi is relying too much on government and too little on personal choices, denying working families the options to improve their living standards and lift themselves out of poverty. And, as the government continues to grow and spend more of taxpayers’ dollars, Mississippi will have even fewer private sector jobs, less opportunity and lower economic growth.
Given this poor business climate, companies will continue to overlook Mississippi as an option to set-up shop, and Mississippians will be deterred from starting their own businesses. Government is essentially crowding out the private sector.
To turn things around in 2015, Mississippi must free up its economy and allow private sector business to grow, creating opportunity for each of us to improve our lives. We know what to do to change the situation and increase living standards: remove restrictions on labor markets, reduce the tax burden, and shrink the size of government spending. These changes are long overdue. It is time to stop battling for last place. Mississippi deserves better.
Claudia Williamson is an assistant professor of economics at Mississippi State University.