Election 2019 Mississippi Governor

Lt. Gov. Tate Reeves, the Republican nominee in the Mississippi governor’s race, has received President Donald Trump’s endorsement. Trump tweeted that Reeves has his “Complete & Total Endorsement.” (AP Photo/Rogelio V. Solis, File)

JACKSON • Lt. Gov. Tate Reeves, flanked by his wife and three daughters as he announced his candidacy for governor on Jan. 3, wasted little time in his speech getting to the foundation of his campaign: the strength of the state’s economy.

“I am an eternal optimist, and I will run an optimistic campaign – a campaign that focuses on results and solutions for Mississippi’s future, and a campaign that always protects the taxpayers,” Reeves said at Mississippi Republican Party headquarters in Jackson.

Reeves, who has helped guide economic policy the past eight years as lieutenant governor, refers to himself as the state’s “fiscal watchdog” and often touts his finance background. After a short career in investment banking as a chartered financial analyst, he entered politics and served two terms as the state treasurer.

That background drives his campaign messaging on the stump. He boasts about the state’s lowest-ever unemployment rate, the increasing wages of Mississippi workers, the state’s largest-ever tax cuts he spearheaded and the notion that more than 50,000 jobs are available for Mississippians.

“I think it’s a pretty difficult argument to make that Mississippi isn’t in far better shape today than we were eight years ago, and I think that’s why you’re seeing people in places like these rally behind our campaign,” Reeves told Mississippi Today in June.

The rhetoric reflects the beliefs of a majority of Mississippians who believe the state’s economy is doing well, according to an online poll by NBC News/SurveyMonkey released in July. More than three-fifths of Mississippians said they believed the state economy is very good or fairly good compared to others who believe it is fairly bad or very bad.

The truth is that Mississippi’s recent economic growth is by way of one of the slowest recoveries from the 2008 recession of any state in the nation.

Mississippi Today analyzed five of Reeves’ claims about the strength of the state economy, using federal labor data and interviews with state economist Darrin Webb. Here’s what we found.

Reeves claim: “Mississippi today has more people working than in any time in our state’s history. In fact, we have 1,180,000 people working in our state today. That is the reason, by the way, that there are many places like where we are today where their biggest challenge is finding more skilled workers.”

Fact check: First, let’s deal with Reeves’ claim that there are more Mississippians, in sheer numbers, working today than ever before. The truth depends on which federal data set you look at.

U.S. Bureau of Labor Statistics data shows companies employed 1.2 million Mississippians in July 2019, a record high number of jobs for the state. That’s true mainly because Mississippi’s working age population, 2.3 million, is as large as it’s ever been.

But when you consider population growth over the last three decades, there are fewer jobs as a share of the workforce today than in 16 out of the last 29 years.

Reeves’ number comes from a survey of employers who report how many workers they employ, so if a person works two jobs, they’re counted twice in the total. The data set, known as the “jobs report,” also excludes farm jobs, an increasingly small part of Mississippi’s labor force. The measurement is preferred by economists who want to study activity in the jobs market.

Another state-reported data set, known as labor participation, counts the number of actual people working in each household. This could include people who work outside the state and would not be counted in the employer survey.

Looking at the labor-participation rate contradicts Reeves’ claim. The data shows that there were more total Mississippians working throughout the early and mid-2000s, even when the state’s population was significantly smaller, than were working in July 2019.

Based on this BLS data, a smaller percentage of Mississippi’s working age population is participating in the workforce today – 55.6 percent – than in almost every year dating back to 1976, with the exception of 2018 (55.6 percent), 2015 (55.6 percent) and 2014 (54.9 percent). The state had the second lowest workforce participation rate in the nation in 2018, with West Virginia last.

Mississippi’s labor participation rate reached a historic high of 63.2 percent in 1994 and has been dropping most years since, following a national trend partly due to the aging population. In July 2019, more than 1.21 million Mississippians were employed and 64,819 were unemployed and looking for work.

Even though the state’s labor participation rate is smaller than ever, so is its unemployed population. In only the late ’70s and late ’90s was the number of unemployed people as small, under 65,000, as it’s been in recent years.

In the second part of his statement, Reeves claimed this is the reason employers in Mississippi have difficulty finding skilled workers.

Looked at another way, this could also be because Mississippi’s workforce has among the lowest educational attainment of any state. Nearly 38 percent of Mississippi’s labor force did not attend any college compared to 32 percent nationally.

“If your economy is growing, you’re always going to have more people employed. And most economies grow. That is, you’ve got people being born every day. The economy is constantly expanding. The only time you don’t have more people employed than you’ve had in the past is when the economy is either in recession or in recovery,” Webb said. “But all of this, it’s all just word games, in a sense.”

Reeves claim: “Our economy is growing and thanks to people like yourself and facilities like we’re in today, we’re creating tens of thousands of new jobs.”

Fact check: In 2018, monthly employment grew, on average, by nearly 60,500 since 2012 when Reeves took control of the Senate as the state was still beginning a long recovery from the recession.

There are nearly 8,500 more jobs in Mississippi so far in 2019 than during the 2007 peak, according to annual averages of the employer survey data. In that time, the working age population grew by 123,241, so population increases since the recession have far outpaced job growth.

Mississippi lost 61,800 jobs from 2007 to 2010 and has seen small increases – between 0 and 1.2 percent – each year since, including 0.3 percent in 2018, which was smaller job growth than every other state with the exception of Vermont, Connecticut and Alaska.

The Reeves campaign said the Taxpayer Pay Raise Act of 2016, which he championed, “has incentivized businesses to locate here and bring jobs with them, as well as an overall environment of keeping taxes low, reduced debt, etc.” They cited two developments: Amazon’s goods fulfillment center in Marshall County set to employ 850 and Continental Tire, which plans to hire 2,500 by 2028, in Hinds County.

So far in 2019, the state has seen a 1.2 percent bump in employment, but Webb predicts those preliminary numbers will be revised downward.

“In terms of jobs, according to the official statistics, that are subject to revision, Mississippi has recovered the jobs it lost in the recession. It took a long time. It took the longest it has ever taken. In our history, we’ve never taken ten years to recover our jobs,” Webb said. “We have not had significant job growth.”

The state has seen far greater job growth in past decades. The casino industry was a boon for Mississippi’s economy when gaming was legalized in the 1990s, contributing to the largest year-over job growth in three decades in 1992 (2.4 percent), 1993 (4.4 percent) and 1994 (5.3 percent).

Reeves claim: “Those 80,000 more people working today, guess what, they’re paying income taxes. They’re paying sales taxes. They’ve got more money in their pocket and they’re going out and spending it.”

Fact check: Mississippians’ wages have failed to grow over the last decade. When adjusting for inflation, private employees in Mississippi are set to make roughly $40-a-week less in 2019 compared to 2009. These inflation-adjusted figures are called “real wages.”

Real weekly earnings in Mississippi reached a decade-high in 2013 and have declined most years since. In July 2019, the average private employee in the state earned $723 a week. That’s nominally more than the $670 they earned on average in 2012, the Reeves campaign pointed out, but less when you factor inflation.

To back up his claim, the Reeves campaign also cited the 2016 $150-a-year income tax cut, which will take full effect in 2022, but that is not enough to make up for declines in real wages.

Mississippi workers have made roughly $120-a-week less in real wages than workers nationally over the last decade, but the gap increased to almost $190 in 2018.

Slow growth in sales tax revenue suggests Mississippians are not “going out and spending” at a significant rate. While these collections plummeted more than 10 percent during the recession, and increased 10 percent in 2014, they’ve been crawling recently, just 0.1 percent in 2018 and 1 percent the first half of 2019.

Reeves: “I would say because of the largest tax cut in Mississippi history, we’re going to collect more revenue this year than in any other time in our state’s history.”

Fact check: Like employment growth, the state should always collect more revenue each year than the previous. “It would be a problem if you didn’t,” Webb said.

Collections grew nearly 4.9 percent or $277 million during the 2019 fiscal year. It was the highest percentage of growth since 2014, when the state collected 5.1 percent more revenue. During the years in between, growth was much slower.

And recent increases are not historic. They pale in comparison to the growth Mississippi saw in the 1990s during a booming economy fueled by gaming. In some of those years revenues spiked more than 10 percent.

{div class=”subscriber-only”}Still, Webb said any growth this year should not be attributed to the largest tax cut in the state’s history, including the elimination of the state’s corporate franchise tax, because it hasn’t taken effect. The policy won’t be fully implemented until 2028, at which point the cuts will result in a $415 million annual loss of revenue for the state.

Instead, Webb said, recent growth is tied to policy changes on the federal level that resulted in corporations recording more taxable profit and a Supreme Court decision allowing states to capture tax on online purchases – virtually a whole new revenue source for the state.{/div}

“As a general rule … the state government doesn’t have a lot of play in what happens in the economy,” Webb said. “I think politicians get too much credit and too much blame, because I think the economy is going to do what the economy is going to do.”

Reeves: “Mississippi is in the best financial shape we’ve ever been in … By virtually every economic measure, Mississippi is headed in the right direction.”

Fact check: Mississippi’s economy has shown nominal growth as it follows national trends but trails far behind. Even the state’s gross domestic product, the most comprehensive measure of the overall economy, has not caught up to where it was in real dollars in 2008.

Mississippi’s GDP has grown a fraction of the rate of the nation since then, under 1 percent in nine of the last 10 years, including declines in 2011 and 2014. That’s compared to consistent growth nationally of between 1.6 and 2.9 percent every year since the recession.

The Reeves campaign also cited the state’s rainy day fund reaching $554 million in 2019, a historic high.

“You asked about (if) we’ve recovered. How do you define it? In terms of jobs? Yes, according to the official statistics,” Webb said. “In terms of GDP? … We’re actually still below where we were in 2008 in terms of our GDP. So technically we haven’t recovered in terms of GDP.”

“Again, the overall story is we’ve really not seen a lot of growth.”

Reporter Adam Ganucheau contributed to this report.{span class=”print_trim”}

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