Nation’s debt default would hurt Mississippi’s already fragile jobs market more than most
Published 10:10 am Thursday, May 25, 2023
Mississippi’s already lackluster employment numbers would be impacted more than most states if Congress does not raise the debt limit to pay the nation’s bills.
If there is a long-term lapse in the nation’s ability to pay its debt, the state could lose as many as 64,000 jobs or 5.4% of its workforce, according to a recent report by Moody’s Analytics, a subsidiary of Moody’s credit rating agency. In a short-term scenario, Mississippi would lose as many as 21,700 jobs or 1.23% of its workforce. Moody’s predicts only five states would lose a larger percentage of their workforce than Mississippi.
“The blow to the economy would be cataclysmic,” Moody’s said of a “prolonged breach” of the debt limit. Moody’s reasons that states that depend more on federal revenue would be the ones most negatively impacted if the nation defaults on its debt.
The Republican leadership of the House is currently refusing to raise the nation’s debt limit to pay past commitments made by Congress unless multiple cuts are made to future spending. Congressional leaders and President Joe Biden currently are negotiating a deal that will result in raising the credit limit. If no deal is reached, projections are the nation could be unable to pay its debt starting in early June.
The debt limit debate comes as Gov. Tate Reeves has touted the state’s job growth as part of his reelection campaign. The Republican Reeves will likely face Democratic Northern District Public Service Commissioner Brandon Presley in the November general election.
After April’s unemployment rate of 3.4% was announced for Mississippi, Reeves said: “Reaching a record low unemployment rate in back-to-back months speaks volumes to Mississippi’s momentum. Our education system is thriving, jobs are plentiful, and there are more opportunities than ever before. We’re making historic investments in workforce development and infrastructure and are attracting thousands of high-paying jobs to every region of the state. It’s a great day to be a Mississippian.”
Despite those low unemployment numbers, data from the U.S. Bureau of Labor Statistics reveals that there were fewer Mississippians working in April of this year than in April 2022. In April 2023, 1.212 million were employed — 8,089 fewer than were working a year ago.
April marks the seventh consecutive month where there were fewer Mississippians working than in the prior year, according to BLS data. There are 2,073 fewer jobs in April 2023 than in January 2020 when Reeves took office, though April 2023 numbers are still preliminary.
Employment numbers have been tenuous in Mississippi for some time. The state’s highest levels of employment occurred in May 2000, when there were 1.24 million employed. That number has never been surpassed.
Mississippi’s labor force participation rate also peaked in early 2000, when 62.85% of the people eligible to work were employed. The state’s rate is currently at 54.5% and trails the national average of 62.9% and all other states with the exception of West Virginia.
Responding to those numbers in the past, Reeves has said there are jobs available for people who want to work.
But those jobs pay less than jobs in other states. Mississippi has the lowest mean or average household income at $65,156 per year. Mississippi has trailed the rest of the nation in per capita income for decades, though Reeves points out per capital income has increased by 21% or $8,100 since 2019.
Wages in Mississippi, like in the rest of the nation, have been increasing since the pandemic. Personal income in Mississippi grew by an annualized rate of 4.1% between the third and fourth quarters of 2022. During the same period, the nation’s personal income grew by an annualized rate of 7.4%, according to the Bureau of Economic Analysis.