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From The Ground Up

Off the bottom? Laws alone won’t do it

It is tempting for business owners to say, “Just let me run my business without the government constantly changing the laws that affect my business.”

It is a noble sentiment, but one that ignores reality. Government, especially the Mississippi Legislature, affects business in Mississippi more than most of us imagine. Sometimes it is even positive.

This fact was brought home to me as I listened to a Momentum Mississippi presentation recently. I knew instinctively that sooner or later the attendees would be asked to contact their legislators and request that the Momentum Mississippi package be enacted into law during what will surely be an upcoming special legislative session. All of the good reasons to do so were put forth.

The Momentum Mississippi incentives do not require cash outlays from the state, and the tax breaks are subject to prior analysis indicating a positive return. It also provides for clawback provisions in case companies that receive incentives do not meet the goals. Much of Momentum Mississippi relates to loans and changes in classification of eligible recipients. It would be hard to be against this type of economic development legislation.

Still, there is a part of me that says that the less government gets involved in business the better.

Dropping the hammer — hard

Then the hammer dropped. It was pointed out that from 1993 to 2003, the 11 Southern states had an employment growth rate of 18.1%, and that Mississippi’s employment growth rate during the same period was only 11.4%.

Naturally, I wondered what affect gaming had on these members. I did not have to wait long.

Anthony Topazi, president of Mississippi Power Company and enthusiastic leader of the Momentum Mississippi initiative, revealed that without gaming and Nissan the employment growth rate in Mississippi during that 10-year period would have been only 4%.

I then realized that it was the Mississippi Legislature that changed the law to allow gaming, and then provided the incentives for Nissan to locate here. Sometimes, legislative action may not always be viewed as a negative intrusion into business.

A chicken and egg discussion

At the same meeting, George Schloegel, president and CEO of Hancock Bank and chairman of the State Workforce Investment Board, spoke passionately and eloquently about how workers receive upgraded training only to find that there are few higher-paying jobs available.

In Mississippi these days, there is in one sense a chicken and egg discussion going on. We need educated workers to have better jobs. We need better jobs if those workers get that education.

What good does it do us when our educated children have to leave the state to find a good job, and what good does it do us to recruit companies that provide good jobs if there are not enough educated workers?

Yes, I admit it, these are somewhat rhetorical questions.

Changing the culture

From my perspective, it seems that one of the better hopes for Mississippi is that it becomes an entrepreneurial economy, a place where Mississippians are educated and motivated to start and operate businesses here.

I see businesses like Viking Range Corporation, Peavey, Howard Industries and Gail Pittman, and I think of what a future we could have with people starting companies like those entrepreneurs.

Unfortunately, it will take a long time to change our culture in this regard. I’ve written before about what I believe we must do, and it seems a good time to repeat it here.

I believe that we must do the following to get off the bottom:

• We need to become a state that values learning.

• We need to educate children in poverty at an early age.

• We must eliminate racism.

• We must experience political leadership.

• We must stop trying to please all constituencies.

• We must stop children from having children.

• We must work harder at welcoming outsiders.

Unfortunately, the Legislature can’t pass a law to cause these things to happen.

Phil Hardwick’s column on Mississippi Business appears regularly in the Mississippi Business Journal. His e-mail address is phil@philhardwick.com.

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