DIVERSIFICATION OF
MISSISSIPPI’S ECONOMY
MAKING THE TRANSFORMATION TO THE GLOBAL
ECONOMY
GOALS
• To understand the economic repercussions of World
War II on Mississippi
• To understand the economic consequences of
segregation and the Civil Rights Act of 1964
• To understand the effect of globalization on the
Mississippi economy
• To understand Mississippi’s economy in the 21st
Century
MISSISSIPPI’S ECONOMY AFTER WWII
International Harvester onerow cotton picker
Impact of WW II
World War II was “a
convenient and readily
identifiable era, before
which there was basic
historical continuity for a
century, but after which
nothing ever again was
quite the same.” John
Ray Salter
STATE AND NATIONAL CHANGES THAT
AFFECTED THE POST-WAR ECONOMY
• As a result of the war, the Delta lost 19% of its inhabitants
who served in the military or worked in defense industries
and never returned.
• Delta planters who had been incentivized to experiment
with technology through AAA payments during the New
Deal now embraced highly capitalized machine
agriculture and sharecropping disappeared.
• The Gulf Coast benefitted from military investment in
bases and defense industry (Ingalls Shipyards in
particular). In post-war America the South would
emerge as a strong advocate of continued military
spending.
• Returning veterans claimed their GI Benefits to purchase
homes, start businesses, buy machinery for farms, and
attend college
CIVIL RIGHTS AND THE MISSISSIPPI
ECONOMY
Image from inside a Freedom
Ride bus as it entered Jackson
THE ECONOMIC COSTS OF
SEGREGATION
• According to the U.S. Census, Mississippi’s
population was 58.5% African American in 1900,
45.3% in 1950, and 36.3% in 2000.
• Segregation was inefficient in that it imposed high
economic costs by limiting investment and access
to human capital.
• Educational opportunities were limited for black children
• Low wages and sharecropping limited the consumer
spending of blacks and poor whites
• Focus on agriculture inhibited urban growth which inhibited
innovation, the engine of economic growth.
ECONOMIC EFFECTS OF THE CIVIL
RIGHTS ACT OF 1964
• Title VII of the Civil Rights Act opened a wide range of
job opportunities for African Americans without
negatively impacting white opportunities.
• National employers and employers with government
contracts led the way in integrating the workplace.
President Lyndon Johnson’s 1965 Executive Order 11246
prohibited discrimination in firms with federal contracts.
• South’s (and Mississippi’s) largest industry was textiles,
and its desegregation was the largest contributor to
increases in black incomes between 1965 and 1975.
• Rise in black education levels as reflected in high school
and college graduation rates. Jobs now available to
blacks that called for more education and specialized
skills.
“THE MOST SOUTHERN PLACE” IN A
GLOBAL ECONOMY
EFFECT OF AUTO MANUFACTURING,
GAMING, AND OIL ON MISSISSIPPI ECONOMY
• According to a 2013 Mississippi State University Study, the
ten years of production at the Nissan plant in Canton
have almost doubled median income, reduced poverty
in Madison County to an all-time low of 13%, increased
the number of housing unites in Madison County by
27,000, and employed 16,000 workers.
• Mississippi had 29 state-licensed casinos in 2014 that
produced $2.08 billion in revenues, $247.8 million in tax
revenues, employed 22, 277 casino employees, who
earned $710.7 million in wages.
• A 2011 oil and gas industry report places the number of
workers employed at 97,800 or 6.6% of the state’s total
employment with a combined income of $4.22 billion.
INEQUALITY IN MISSISSIPPI
• In 2014, Mississippi had the highest level of child poverty
in the nation. Being born into poverty in Mississippi is
more likely to result in a lifetime of poverty than in other
U.S. state.
• Nine counties in Mississippi have a per capita income
below $13,000/year (2014).
• Five counties in 2014 had unemployment rates above
17%.
• Forbes magazine found investors who rated Mississippi
last on their lists of potential projects did so because they
viewed the state’s educational opportunities and health
care as detrimental to worker productivity.
NEW ECONOMY OR OLD ECONOMY IN
NEW CLOTHES?
• The South is home to the fastest growing population in the U.S. The
second and third largest states are ex-Confederate states. Mississippi has
not yet doubled its population in the 115 years since the 1900 census.
• Urbanization has become a hallmark of the southern economy with
Miami, Atlanta, Charlotte, Dallas, Houston, and Fort Worth as leading
examples. Mississippi remains largely a rural state, with Jackson its largest
city, a size that according to a Mississippi State report would make it the
fifth largest city in Alabama.
• The new southern population is diverse, not simply black and white. In
the 2010 census, Mississippi’s Hispanic population was 3.2% and its foreignborn population was 2.2%.
• Two of the largest high tech corridors are in the South—in Texas and North
Carolina. Two others, the Florida High Tech Corridor and the I-85 Corridor
are up and coming tech incubators. Although Mississippi universities
boast high tech centers, no synergy for high tech incubators has
developed.
• Mississippi still experiences a “brain drain” of engineers, computer
scientists, mathematicians, and scientists who will build the next
generation of innovations that will drive the future economy.
CONCLUSION
• Mississippi has participated in an economic
transformation that shifted the state’s economy
from agriculture to industry and from a
dependency on low wage industries to high wage
manufacturing, tourism/gaming, and resource
extraction.
• Despite the gains, Mississippi’s economy continues
to suffer from high levels of inequality and low levels
of innovation.