Jobless rate only part of the picture
T he latest Mississippi unemployment figures are out, and there is some good news and some bad news.
First the good news: Mississippi’s unemployment rate is down from 5.8 percent last year to 5.1 percent this year. Economists consider 5.5 percent to be full employment, since there are always people in transition between jobs of their own accord. During Gov. Phil Bryant’s recent State of the State addresss, he boasted that there are 40,000 Mississippi jobs looking for people. These latest figures seem to confirm that happy situation.
Now the bad news: Mississippi has the lowest employment-population ratio in the nation at 53.1 percent. That means only half the people in the state are working. The highest employment-population ratio is Minnesota at 67.8. Alabama’s ratio is 54.1, Louisiana’s 55.7, Tennessee’s 58.4 and Arkansas’ 56.1. The average ratio for the entire United States is 60.1. Norway has a ratio of 75.5 percent. Australia’s is 72 percent.
To put another way, if Mississippi’s employment-population ratio were in line with the national average, Mississippi would have an additional 84,000 people in its labor force. That’s a huge number.
Wikipedia states: “The unemployment-population ratio is used to evaluate the ability of the economy to create jobs and therefore is used in conjunction with the unemployment rate for a general evaluation of the labour market stance. Having a high ratio means that an important proportion of the population in working age is employed, which in general will have positive effects on the GDP per capita. Nevertheless, the ratio does not give an indication of working conditions, number of hours worked per person, earnings or the size of the black market. Therefore, the analysis of the labour market must be done in conjunction with other statistics.”
Perhaps Mississippi has a big black market of labor. Maybe we have a lot of rich people who don’t have to work. Maybe we have a lot of students and retirees. Maybe we have too many disabled people or people on welfare. Nobody really knows.
Be that as it may, the total number of people employed is about 25,000 less than it was 10 years ago. Our population is flat or even declining slightly. Before we get too excited about low unemployment, we need to keep that in mind. The real number we want to see in Mississippi is a growing number of people employed in the labor force.