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State leads nation in service sectors employment

Where do Mississippians work? A lot are behind the cash register or waiting on customers. About 37,570 state residents work as cashiers (not including gaming cashiers), and another 34,700 are retail salespersons.

The occupation in Mississippi with the third-largest employment is for laborers, including the freight stock and material movers — the folks that get the stock to the store.
Coming in next is registered nurses at 23,150. As the state and nation’s population is aging, demand is increasing for nurses and other healthcare professionals like nurses aides, orderlies and attendants, coming in 14th on the list with 16,490 employed.

Of the top 10 fastest-growing job categories in Mississippi, six are health related. Home health aides, which earn an average of $18,010 per year, are ranked as the third-fastest growing profession. That’s followed by No. 4 medical assistants, $20,560: No. 7 personal and home care aide, $14,840; No. 8 medical records and health information technician, $21,380; No. 9 speech-language pathologist, $43,230; and No. 10 dental hygienists, $34,820.

Wayne Gasson, chief of labor market information with the Mississippi Department of Employment Security, said one of the most significant trends in employment is the increase in numbers of registered nurses employed in Mississippi.

“That is a national trend that is going to affect Mississippi, also,” Gasson said. “Also, there are a large number of retail sales persons and cashiers.”

Service industries, which are considering one of the eight major divisions in the nation’s private non-farm economy, are the biggest and fastest-growing part of the U.S. economy as measured by jobs, according to Census Bureau analyst Paul Zeisset.

“Business services account for much of that growth, but there are some important exceptions,” Zeisset said in a national Census Bureau press release. “ For example, service industries in Mississippi grew faster than other states on the strength of hotel and amusement industries.”

About 6.4 million new jobs were created in the service industry between 1992 and 1997, and Mississippi led the country in jobs growth in the service industry.

“Mississippi led all states in growth of service businesses subject to federal income tax, with a 66% increase in employment (from 108,000 to 180,000) and a 94% increase in receipts (from $5.5 billion to $10.7 billion),” Zeisset said. “Mississippi’s receipts in hotels and motels skyrocketed from $235 million to $1.34 billion. From another report, we know that Mississippi’s 1997 hotel receipts were dominated by casino hotels.”

Nationwide there was a 24% increase in service employment between 1992 and 1997, from 27.4 million to 34.0 million jobs.

Currently, the biggest industry sector in Mississippi is services with about 400,000 people employed. The growth in service industry jobs has come at the same time that Mississippi has lost large numbers of manufacturing jobs — jobs that are higher paying.

But there is evidence of a rebound in manufacturing, said Jay Moon, president of the Mississippi Manufacturers Association.

“We’re really starting nationwide and in the state to see a real upturn in our manufacturing set,” Moon said. “As of this month, it is the 15th consecutive month in the country that we have seen growth in manufacturing, which is good news. In Mississippi, so far since January we have had 55 manufacturing plants close accounting for 4,212 jobs. Last year over 100 plants closed. I think we aren’t seeing as many closures.

“And, we have had 35 new manufacturing facilities open since January, accounting for 2,500 jobs, and 53 expansions accounting for 2,540 jobs. That is in excess of what we have lost. We have slowed the rate of loss, and are picking up in terms of expansions. We are also bringing in new manufacturers.”

Moon believes that is good news for the economy overall. Generally when the economy declines, manufacturers will hold back on expansions or new developments until they see which way the economy is going to go.

“Manufacturers believe the economy is getting better, so they are looking to expand or build new facilities,” Moon said. “We still have issues that could have an impact quarter-to-quarter or month-to-month. Petroleum prices going up could cool down some of the growth that we have seen. In spite of that, we are seeing a trend where we are beginning to grow again, and some real stabilization of existing industries.”

Manufacturing was the dominant employer in Mississippi for about 50 years, starting with the Balance Agriculture With Industry Act that encouraged more manufacturing in the state.

Pete Walley, director of long range planning for Mississippi, said from the 1930s to the 1990s, the state got progressively more and more people employed in manufacturing until it represented about one-fourth of the workforce.

Then came the free trade agreements and increasing globalization. Between 1994 and 2000, Mississippi lost 32,000 jobs in manufacturing. During roughly the same time period, legalization of casinos and the accompany construction of casino hotels and entertainment facilities, large numbers of jobs were created in the service sector.

“The replacement jobs for manufacturing turned out to be service jobs,” Walley said. “We now have more service jobs that traditionally don’t pay as well as manufacturing jobs.”

The largest job sector after service is government followed by retail and restaurants. Manufacturing comes in fourth, and now represents 180,000 out of 1.3 million workers in Mississippi.

The shift in jobs represents a major structural change in the economy of the state.

“Structural change means something that is more profound than quarterly or year-to-year changes in the economy,” Walley said. “Mississippi is in structural change right now, has been for some time, and we haven’t realized the severity of the change.”

Mississippi workers, on average, are paid less than their counterparts in other states. Walley said pay can vary from 60% to 85% of the national average.

“Why are our workers not paid the same for the same kinds of jobs, even the equivalent of the Southeastern average?”
Walley asks. “I have looked at jobs that are only separated by the boundary of the MississippiAlabama state line. Just across the state line, Alabama workers will make ten to 15% more for the same job. That is interesting to me. Why do our people get discounted in these jobs?”

He believes the answer lies in the economic theory that wages are affected by the productivity of workers.
What affects productivity? In a big sense, it is the capital and capability of the individual worker, Walley said, explaining that capital includes things like the tools inside a manufacturing facility. Better machines with more automation result in each worker producing more.

There is some evidence to suggest that the average Mississippi worker doesn’t have skill sets as high as counterparts in other states. Walley contends part of the solution is to push harder for skills training and specialization associated with the kinds of jobs that are available.

“You can go anywhere in the state and find pockets of excellence,” Walley said. “But when you add up all 1.3 million workers, we have massive pockets of low performance. They more than offset any small pockets of excellence. That hurts us.”

Unless root problems are addressed like the lack of skills training, high dropout rate in high school, and the 47% illegitimacy rate in Mississippi, the state could continue to fall behind.

“When addressing economic development, we continually repeat the process of never looking at root problems,” Walley said.

He points to four root problems:

First, almost half of the state’s children are born to single mothers. Academic studies show that children born without the benefit for two-parent families have much greater problems including illnesses, lack of adequate education, and a higher incarceration rates.

Second, about 40% of students drop out before graduating from high school. Only 24,000 out of 42,000 children enrolled in grade one make it through high school.

Third, about 500,000 of the working age population of 1.6 million are functionally illiterate. They may be able to write their names and read fundamental information, but they don’t know how to take it, process that information and make decisions on it. There used to be hope younger people would do better than their grandparents, and achieve higher literacy rates. But with so many dropouts, there is little evidence of a declining illiteracy rate.

The fourth major issue regards having the right type of skills for the jobs that are available. Skill standards are certifications in different industries that demonstrate a worker has basic competencies.

“Out of our 1.3 million workers, I would be surprised if 10% held recognized skill standards,” Walley said.

In the present education system, the one primary message students receive in high school is to go to college. Yet it is very difficult for students graduating with a general degree from college to get good paying jobs.

Walley believes it would make more sense to educate high school students about the skill sets needed to get good jobs, and what they need to do to earn certifications.

“Show them what jobs they can get, and the skill sets required by job,” Walley said. “This comes down to what we spend money on for education. If we want higher pay, we need better skill levels. Education is the basis, but it is really the skill levels the employer is looking for. Everything is set up to attract kids to college when half to two thirds of the students need skills, not degrees.

“That is a philosophical debate going on in Mississippi. The system is wrestling with it. For 25 years we have been on this college track. That is a good long-term strategy. But in the medium- and short- run, we need people with skills, and we are not producing very many of those.”

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

About Becky Gillette

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