More Jobs, But Fewer with Jobs, Huh?

“Mississippi added 8,800 more jobs in 2014 than in 2013,” so noted Gov. Phil Bryant in his optimistic State of the State address last week.

Over the same period, 16,700 fewer Mississippians had jobs. So says the same report that the governor’s figure came from.

Huh?

The Mississippi Department of Employment Security, as do its counterparts across the country, publishes two sets of employment statistics. One set counts people, the number of Mississippians who have jobs. This is called residence-based employment. The other counts jobs, the number of jobs at Mississippi-based employers. This is called establishment-based employment.

The obvious difference between these two sets is that some people work in different states than where they live. All those folks working at Ingalls Shipbuilding in Pascagoula who live in Alabama count toward Alabama residence-based employment, but also count toward Mississippi establishment-based employment.

There’s more.

Residence-based employment counts self-employed, unpaid family, domestic and agricultural workers while establishment-based employment does not (except for some agricultural workers like veterinary and landscape workers).

Also, residence-based employment only counts a person one time. Establishment-based employment counts the number of jobs, so a person holding two or more jobs will be counted multiple times.

The Federal Reserve, the Congressional Budget Office, the president’s board of economic advisors and most who seek to examine the economy utilize establishment-based data because it counts jobs, which is a measure economic activity. Residence-based data is primarily used to compute the unemployment rate.

Job growth, job creation, job retention – now those are the stuff of economic development.

People with jobs and people without – now those are the stuff of politics.

Last year was the third year in a row the average number of Mississippians with jobs declined. Not a politician’s dream trend.

On the other hand, manufacturing jobs are up and the unemployment rate is down. That’s better.

On the third hand, Mississippi’s labor force participation rate – the number of people with jobs and looking for jobs divided by the working age population – has been declining since 2011. A declining rate points to growth in the welfare economy not the prosperity economy. This not only puts pressure on politicians, but also on the state budget as more people depend on Medicaid and government subsidies to survive.

Bryant’s bold proposal to put $50 million into job training could bring many back into the labor force, if the legislature approves and it accelerates job growth.

The good news for politicians is that things may be turning to the upside. The bad news for politicians is many Mississippians are still on the downside. The news for the rest of us is we’ll get to hear all about both sides from now to November.

(Thanks to State Economist Darrin Webb for helping me understand the numbers.)

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