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Being part of metropolitan statistical area adds clout

Of the nation’s 361 Metropolitan Statistical Areas (MSAs), Mississippi is included in five: Gulfport-Biloxi, Hattiesburg, Jackson, Memphis and Pascagoula.

“The metropolitan areas are prospering in Mississippi in terms of unemployment rates, educational levels, income data, migration patterns or just about any type of measure you want to look at,” said Darrin Webb, Ph.D., senior economist with the Institutions of Higher Learning. “If you’re not in a population center or near one, you’re not growing.”

The U.S. Office of Management and Budget (OMB) defines MSAs according to Census Bureau data and based on core areas containing a substantial population nucleus with adjacent communities that incorporate a high degree of economic and social integration into that core. Each MSA must have at least one urbanized area of 50,000 people.

“Being part of an MSA certainly helps raise the profile of an area,” said Mississippi Development Authority spokesperson Scott Hamilton.

Standard Metropolitan Areas (SMAs), the forerunner to MSAs, were initially used for reporting data from the 1947 Census of Manufacturers. The MSA system as it is known today was established with information from the 1950 census and was designed solely for the preparation, presentation and comparison of data and to eliminate inconsistencies between statistical area boundaries and units.

Over time, the definitions of statistical areas have changed, shaping MSAs into amoeba-like regions. New areas have been recognized as they reached the minimum required population and counties have been added to existing areas as new decennial census data qualified them. In some areas, formerly separate communities have been merged, components of an area have been transferred from one to another, or they have been dropped from an area.

“When Pascagoula was made its own, it wasn’t necessarily a good thing,” said George Freeland Jr., executive director of the Jackson County Economic Development Foundation. “Paired with Gulfport and Biloxi, the three cities had strength in numbers representing the Mississippi Gulf Coast. The status doesn’t present a deal killer scenario, but it makes it more cumbersome to gather data for economic development proposals. Certain federal formulas are used in healthcare funding, for instance, and those appear to be negatively impacted because of the change in the MSAs. We talked to the BEA (Bureau of Economic Analysis) folks and they said they wouldn’t change the MSA status so that’s a battle we chose not to pursue.”

Richard Lucas, director of communications for Singing River Hospital System, said administrators were surprised to learn about the MSA status change in late 2002.

“The new Pascagoula classification would most likely be financially harsh and disproportionately prejudicial to Singing River Hospital System, which includes Singing River Hospital and Ocean Springs Hospital,” he said, adding that Singing River Hospital has been designated as the only Level II Trauma Center for the Mississippi Gulf Coast region. “We not only have patients who come from different counties and cities for healthcare, but we also employ people from across the entire Mississippi Gulf Coast.”

Jim Flanagan, president of the DeSoto County Economic Development Council, said being part of the Memphis MSA has made it easier for cities like Hernando, Horn Lake, Olive Branch and Southaven to recruit business and industry. For the last two years, DeSoto County has contributed approximately 26% of the overall capital investment in the Memphis MSA.

“A few years ago, the Memphis Regional Chamber initiated a marketing campaign as America’s distribution center,” said Flanagan. “Then it was North America’s distribution center, and now the world’s distribution center.

“Being part of the Memphis MSA has provided some excellent marketing capabilities for DeSoto County and other metropolitan counties. We’ve all been able to take advantage of the logistics benefits from not only a marketing standpoint, but also by having access to a great network of roads, rail, the river, Memphis International Airport, the UPS hub and the FedEx superhub. It also helps us think regionally because it is a unique metropolitan area comprised of parts from three states.”

Kim Richardson, economic development manager for the Area Development Partnership in Hattiesburg, a fairly new MSA, said, “We are able to pool all our efforts from three counties, which greatly increases our market value. Consultants often screen out areas not included in an MSA. Being named Hattiesburg MSA allows us to open ourselves to larger markets, not only in retail but manufacturing and service as well.”

The OMB relies on the BEA, an agency of the U.S. Department of Commerce, for another interesting federal statistic concerning MSAs: personal income estimates. According to the BEA, the income of the smallest metropolitan areas grew fastest in 2002. Personal income grew twice as fast in MSAs with population levels below 250,000 than in MSAs with more than one million people. For instance, in DeSoto County, the fastest growing county in the Memphis MSA, the average household income is $52,963.

Before 1950, the Bureau of Employment Security defined labor market areas (LMAs). Since then, the Bureau of Labor Statistics (BLS) has been responsible for that role. However, shifting MSA definitions have made it difficult for many states to update the LMAs on a timely basis.

For example, the Jackson MSA labor market information available through the Mississippi Department of Employment Security is based on a three-county area, not the updated five-county market. Pascagoula remains part of the Gulfport-Biloxi MSA. According to an agency spokesperson, the department will have labor market information updated by early 2005 to reflect the current MSA status.

“Industry goes where there are people,” said Webb. “And MSAs are where industry is looking.”

Contact MBJ contributing writer Lynne W. Jeter at mbj@thewritingdesk.com.

About Lynne W. Jeter

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