IHL’S Review: State’s economic news ‘gradually improving’

JACKSON — The June 2011 issue of the Mississippi Economic Review and Outlook, published by the Center for Policy Research and Planning of the Institutions of Higher Learning (IHL), is now available online at www.mississippi.edu/URC.

The Review presents the state economic forecast for 2011 to 2016, and includes detailed employment forecasts by sector. Regional, national and international developments impacting the state economy are examined.

The highlights of this issue are:

• Mississippi Economic Forecast. Tornadoes and flooding have hit the state hard this year. “Although the immediate impact has been a drop in output and employment in the areas affected, reconstruction efforts will soon be increasing the state’s growth rate. Recovery work, however, will also bring a shift in activity towards construction,” said senior economist Dr. Marianne Hill.

Overall, news on the economic front in Mississippi has been gradually, if unevenly, improving. Private sector employment has been rising, retail sales growing and General Fund tax collections are coming in above year-ago measures. The unemployment rate is expected to average just under 10 percent this year. A return to 2007 levels of employment is now forecast for 2014.

Most major industries in the private sector, with the exceptions of manufacturing and finance, have added jobs this year. A funding shortage has brought drops in government employment at all levels, however. Housing starts and residential building permits are up in the state, although the housing market has yet to emerge from its slump.

Most persons employed in Mississippi in 2008 were working in firms with more than 500 employees, but more recent data shows this may be changing as the national economy adds jobs at a greater rate in smaller firms.

• National Economic Outlook. The growth rate of the national economy was slow in the first half of 2011, but is expected to pick up substantially in the second half. The recent soft patch rate has hurt job creation, so that the unemployment rate has remained high, averaging 9.0 percent so far this year.

Still, there are several areas of strength in the national economy, including particularly private investment in equipment and software. Exports continue to grow rapidly.

The globalization of the economy is affecting the pace of recovery in many ways, including job creation. U.S. multinational corporations for many years have been creating jobs in their majority-owned affiliates abroad, while eliminating jobs in the U.S. Over one million U.S. jobs were eliminated by these corporations between 2002 and 2008, while at the same time they added 1.9 million jobs abroad.

• Mississippi Women, Work and the Wage Gap. Women make up the majority of workers in several industries in Mississippi, and the wage gap between men and women who work fulltime, year-round continues to affect women and their families. “Over 40 years, this wage gap adds up to $400,000 at the median in Mississippi,” said Hill. Hill looked briefly at the Lilly Ledbetter case and the Walmart lawsuit. She examined the reasons behind the wage gap, summarizing studies that estimate how much of the gap is explained by occupation, experience and similar factors. The general conclusion is that much of this gap cannot be explained by such factors alone.

• Parents and Children’s Health. Barbara Logue considers four parental characteristics and their links to selected measures of children’s health. Family structure, educational attainment, poverty status and type of health insurance all impact children’s health outcomes. One of Logue’s conclusions is that “many child health issues may result from a problem that may be called ‘premature parenthood.’”

Source: IHL

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