investing in working families in mississippi

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INCREASING THE RETURN:

Investing in MississippisWorking Families

MississippiEconomic PolicyCenter


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About the Mississippi EconomicPolicy Center

The Mississippi Economic Policy Center (MEPC)engages in rigorous, accessible and timely analysisto inform the policy debate on issues that affectthe economic and social well being of workingfamilies and low-wealth Mississippians. Anindependent, nonpartisan initiative, MEPC ismanaged by the Enterprise Corporation of theDelta (ECD), a regional financial institution andcommunity development intermediary dedicatedto strengthening communities, building assets andimproving lives in economically distressed areas inthe Mid South. Key MEPC partners include theMississippi Center for Justice and other organiza-tions that contribute expertise and otherwiseprovide important guidance and support.

MEPC and this project receive crucial supportfrom the following foundations: Annie E. CaseyFoundation, Charles Stewart Mott Foundation,Ford Foundation, Joyce Foundation, Open SocietyInstitute and the W.K. Kellogg Foundation.

2007. All rights reserved. Any portion of thisreport may be reproduced without priorpermission, provided the source is cited as:

Edward Sivak and Vincent E. Mangum,Increasing the Return: Investing in Mississippis

Working Families. Jackson, MS:Enterprise Corporation of the Delta, 2006.

To download a copy of Increasing the Returngo to www.mepconline.org. To acquire a hardcopy of the report or for other information contact:

Mississippi Economic Policy Center4 Old River Place, Suite AJackson, MS 39202(601) 944-1100

MississippiEconomic Policy

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Table ofContents

Acknowledgements ........................................................................................................................................ 2

Executive Summary ...................................................................................................................................... 3

Chapter 1 Mississippis Working Families ................................................................................................................. 6

Chapter 2

Investing in Growth: Honing the Competitive Edge ............................................................................. 11

Chapter 3 Tools for Success: Mississippis Economic Development Incentives ................................................... 17

Chapter 4 Decreasing Volatility: Stabilizing Employment through Workforce Supports ..................................... 23

Chapter 5 Increasing the Return: A Summary of Strategies and Recommendations ........................................... 28

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Acknowlegements The Mississippi Working Poor Families Projectreceived funding from a consortium of foundationsincluding the Annie E. Casey Foundation, the CharlesStewart Mott Foundation, the Ford Foundation andthe Joyce Foundation. The National Working PoorFamilies Project, in association with Brandon Robertsand Deborah Povich, provided much-needed andappreciated technical assistance throughout the

analysis and drafting stages of the report. Kerri Riverswith the Population Reference Bureau rounded outthe national project team with credible and accessibleanalysis of the American Community and CurrentPopulation Survey.

We are also especially grateful to the members of ouradvisory board who provided valuable feedbackduring the drafting process. The Mississippi WorkingPoor Families Advisory Board included individualsfrom the following organizations: Catholic Charities of

Jackson, Childrens Defense Fund, Foundation for theMid South, Mississippi Center for Justice, MississippiNAACP, Public Policy Center of Mississippi, Rand GulfStates Policy Institute, Mississippi State Board forCommunity and Junior Colleges and Systems Consult-ants Associates. In addition to the advisory board, Re-becca Tyndall, formerly with ECD/HOPE, alsoprovided assistance in procuring documents for Chap-ter 3.

Finally, the project could not have been completedwithout the help of the following people who workhard every day in their various capacities in state andlocal government: City Clerks Office City of Jackson,Mississippi Secretary of State, Mississippi Departmentof Employment Security, Mississippi Department ofHuman Services Division of Economic Assistance,the Mississippi Development Authority Financial

Resources Division and the Mississippi State Boardof Junior and Community Colleges.

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ExecutiveSummary

Residents of Mississippi will be the first to describeMississippi as one big small town. Family ties rundeep, and friendships span generations. As such, noone would argue with the notion that the statesstrongest asset is its people. Mississippians are resilientand work hard for their communities and neighbors.

While working hard, many are falling short of economic

security in their families. Nearly 130,000 (or 39%) ofMississippis working families are low-income.1 Manyremain low-income despite working more than one job.Low-income working families that include a marriedcouple, for example, work, on average, 1.4 jobs to tryand make ends meet from month to month.Educational attainment in working families helps toexplain the high rate of low-income working families.Mississippians who did not finish high school earn, onaverage, half as much as college graduates. One-fifthof the working adults in the state do not have a high

school diploma or have not passed the GeneralEducational Development (GED) Test.

Mississippi also has a prevalence of low-wage work.Approximately 383,020 (or 35.2%) of Mississippis jobsare in low-wage occupations.2 Over the next five years,

job growth projections by the Mississippi Department ofEmployment Security show that the occupations withthe largest numbers of openings will primarily offer low-skilled, low-wage jobs without benefits.

In the midst of low-wage work and low levels of educa-

tional attainment, the global economy is rapidly ex-panding. While Mississippi businesses and industryused to be able to leverage competitive advantages forregional and national success, advances in technologyand transportation coupled with free trade now requirecompanies to compete with entities from all over the

world. Many of the losses in the once strong manufac-turing sector of Mississippis economy are attributableto globalization. Even with knowledge of the globaltrends, Mississippi lags the region in its participation inthe global economy. Compared to 11 other southernstates, the state ranks second to last for exports as apercentage of gross state product (GSP) and last inforeign direct investment as a share of GSP.3

To compete in the global economy, a strong workforcewith the capacity to research and develop new ideas isa necessity. As local economies shift from agriculture,mining and manufacturing to technology and services,the presence or absence of systems to developresidents with the skills to participate in the globalenvironment will determine the presence or absenceof good jobs.

The title of this report, Increasing the Return:

Investing in Mississippis Working Families, directsthe reader towards a return on investment theme andsuggests that the return on the public investment couldbe higher. By strengthening existing training systems,targeting resources towards innovative and permissibletraining activities and enhancing workforce supports,Mississippi could improve the economic stability ofthousands of working families. Simultaneously, acoordinated training strategy focused on the jobs oftoday and tomorrow could build a workforce thatactively competes and succeeds in the global economy.Increased economic stability and greater global partici-

pation could ultimately lead to higher incomes, highereducational attainment rates, higher levels of privateinvestment and associated increases in economicdevelopment. Simply put, a high rate of return onthe investment of public dollars and the individualinvestment of hard work will be realized.

1 Working Poor Families Project, generated with data from the U.S. Census Bureau 2004 American Community Survey.2 Working Poor Families Project, generated with data from the Bureau of Labor Statistics Occupational Employment Statistics

program, November 2004. http://www.bls.gov/oes/home.htm. Data do not include self employment.3

Blueprint Mississippi: a Business Approach to Mississippis Future, Executive Summary. August 2004,http://www.msmec.com/mec/documents//BlueprintMississippi/BP3173ExecSumFinal2.pdf.

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Finally, the theme of return on investment alsocalls for systems of measurement and monitoring.

All investors with strong track records have tools formeasuring the performance of their investments.Given the hundreds of millions of taxpayer dollarsinvested in training the workforce, developing jobsand supporting working families, recommendationsto enhance systems that measure success, focus on

outcomes and enhance accountability appearfrequently.

Findings and Recommendations

Chapter 1:Mississippis Working FamiliesThe reports first chapter provides a demographicoverview of the states working families. Somehighlights from the first chapter include: 129,457 working families in Mississippi are

low-income; 256,177 children live in these low-income families; 56.8% of all working families with a minority

parent are low-income; and 56.1% of all working families in Mississippi have a

parent with no post-secondary education.

Chapter 2:Investing in Growth: Honing the Competitive EdgeThe reports second chapter examines the states

workforce training systems including the community

colleges, the Workforce Investment Network, AdultEducation and Temporary Assistance for NeedyFamilies (TANF). Among working-age adults, 347,343 have not

finished high school; Approximately 33.2% of prime working-age adults

that are white have an associates degree or higher,while only 19% of prime working-age adults thatare African-American have attained similar levelsof education;

If all of Mississippis people of color attained equaleducation and earnings as whites, the state would

experience a $1.1 billion increase in annual taxrevenues;

On average, Mississippi annually spends $6.52per adult without a high school diploma or thathas not successfully passed the GED test on adultbasic education;

The number of people who exit the WorkforceInvestment Act (WIA) program is very high;however, only a small percentage (11.7%) of thepeople who exit receive training; and

Only a small percentage (2.5%) of people enrolled

in the TANF program were enrolled in job training.

Moving forward, the following list represents policyopportunities for state policy makers to enhancecurrent systems.

Pilot the use of two pools of state funds directed atincreasing affordability within the postsecondarysystem for traditional and nontraditional students.For traditional students, the pool of funds would

be used to provide grants for academicallyqualified students without the resources to pay forcollege. For nontraditional students, the pool

would target workers at least 24 or older who arenot qualified for Pell Grants. Funds could be usedfor associates degree, credit certificate andnon-credit vocational programs.

Double the available resources for AdultEducation from $6.52 to $13.00 per adult withouta high school education or equivalency.Increased resources could be targeted towards

programs with high levels of work and educationgoal attainment and serve as the first step on apath to additional education and ultimatelyhigher wages.

Strengthen training options available to Missis-sippis unemployed workers by targeting more

WIA resources towards education and training. Increase training options available to TANF

participants with the goal of doubling the rate ofparticipants in training activities annually for thenext three years. Training programs could befocused on those activities that allow the state to

meet its federal work participation requirements. Enhance data collection and reporting systems to

assess the effectiveness of training systems in theirability to move low-wage Mississippians up theeconomic ladder.

4

What is a Low-IncomeWorking Family?

Before moving into the body of the report,some definitions will assist the reader to put

the report in context.

Family: Primary married couple or single par-ent with at least one child under the age of 18.

Working Family: A family where all familymembers ages 15 and over have a combinedwork effort of 26 or more weeks in the last

12 months, or all family members ages15 and over have a combined work effort of26 or more weeks in the last 12 months andone currently unemployed parent looked for

work in the previous four weeks.

Low-Income Working Family: A family withan income below 200% of the threshold for

poverty as defined by the U.S. CensusBureau. Twice the federal poverty level is

used as a proxy for self sufficiency, i.e., anincome that allows a family to pay for basic

needs like food, housing, clothing and healthcare without any public or private assistance.


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Chapter 3:Tools for Success: Mississippis EconomicDevelopment IncentivesChapter 3 provides an overview of the statesemployment profile and a summary of some of itskey economic development programs. Some of thefindings include: In 2004, Mississippi employed more than one mil-

lion workers that earned over $30 billion in wages; One out of three Mississippi jobs (35.2%) are in

low-wage occupations; 54,515 Mississippians hold more than one job; In FY 2006, Mississippi invested over $67 million

in economic development incentives thatsupported 11,234 jobs; and

Beyond the dollars invested and number of jobsassisted, there are reporting mechanisms to under-stand the level of the economic development in-

vestment and to determine who actually benefits.

The following recommendations represent opportuni-ties for state policy makers to enhance the current setof economic development programs. Include a provision to require employers who re-

ceive public subsidies through incentive programsto fill a portion of the newly created jobs with

workers coming from a low-wage environment.Employers that employ a high number oflow-wage workers could receive a more generoussubsidy.

Track the percentage of low-wage workers that

moved into jobs assisted through state incentivepayments.

Track the earnings of workers assisted throughincentive programs one year after the assistance

was received. Measures could include the per-centage of workers earning above poverty-level

wages and the percentage of workers earningmore than 200% of poverty-level wages.

Increase the transparency of the Jobs Tax Credit.While employers claim an estimated $4 milliondollars in credits annually, there is currently no

way to answer questions about the number of jobsassisted and the quality of the jobs. Efforts could

be made to annually report the number and qual-ity of jobs assisted in the Tax Expenditure Report.

Annually, a report on the use of public incentivesto generate jobs by employers could be publiclyreleased in aggregate form on the MississippiDevelopment Authority website to encouragelegislative and programmatic accountability.

Chapter 4:Decreasing Volatility: Stabilizing Employmentthrough Workforce SupportsThe fourth chapter highlights Mississippis policies forsupporting low-wage working families. Some findingsfrom the chapter include: 282,751 working Mississippians were employed

in occupations that typically pay belowpoverty-level wages;

A raise in the minimum wage would have a

positive effect on the wages of at least 17,000 ofthe states lowest-paid workers; In 2006, families with incomes below the federal

poverty level will pay state income taxes; In 2005, the market rate survey showed that the

state was only reimbursing child care providersat 52% of the market rate for providers aroundthe state.

288,197 working Mississippians do not receivehealth benefits through their employers;

Adults in working families lose eligibility forstate-sponsored insurance when earnings exceed

34% of the federal poverty level (approximately$5,496 for a family of three); and

For workers that received unemploymentinsurance payments, the maximum benefit wasthe smallest in the nation at $210 per week.

The following recommendations represent opportuni-ties for state policy makers to enhance the current setof workforce support programs.

Increase the minimum wage to levels equal toArkansas rate of $6.25 per hour.

Groceries could be exempted from the sales tax,while certain services could be added to the list of

taxable items to account for the revenue thatwould no longer be generated by grocery sales;

Within the income tax system, deduction and ex-emption amounts could be updated to account forinflation, thus preventing people in poverty fromspending limited incomes on a tax;

Increase the child care reimbursement level tomeet the federal recommendation of 75% of themarket rate;

Double the eligibility threshold for Medicaidparticipation for working families;

Create incentives for small employers to providehealth care benefits to their employees andfamilies; and

Increase the maximum weekly unemploymentinsurance benefit from $210 per week to $250per week.

This report provides a road map for residents andpolicy makers to assess the current environment for

working families in Mississippi and offers opportuni-ties for the state to target investments in its people.

As we progress towards the next decade, investmentsin the people of Mississippi will provide strong returnsby allowing working families to build the stateseconomy and increase its position in the globalmarketplace.

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CHAPTER 1:

MississippisWorking Families

An overwhelming number of families in Mississippihave members that go to work everyday. However, ajob in Mississippi does not guarantee economicsecurity. In 2004, nearly four out of 10 families withchildren engaged in work and remained low-income.Families like these work hard and contribute to theirlocal economies. While playing by the rules, theyfind their finances squeezed at the end of the month.

As the prices of gas, groceries, electricity and healthcare rise, many working families simply do not earnenough to cover basic living expenses.4

Several factors contribute to the high rate of low-in-come working families. First, there is a growing preva-lence of low-wage work. As the economy continues totransition to service sector employment, low-wage,service sector employment increases. Seven of theten occupations projected to generate the most jobopenings over the next five years will most likely be inlow-wage job sectors. Anecdotally, one can see therise in service sector employment around the gaminghubs of Tunica and the Mississippi Gulf Coast.

Another factor affecting the high rate of low-incomeworking families is the lack of coordinated systemsdesigned to help low-wage workers to increase theirskills and move up the economic ladder. Regardless ofthe factors, Mississippians many of whom affect oureveryday lives are working hard and falling short.

We depend on the entry-level bank teller earning$14,980 annually to assist us with our banking

needs.5 In the morning, we drop our

children off at day care with a teacher who earnsapproximately $22,000 per year. Finally, we rely onnursing aides and attendants to care for our agingparents and grand-parents on an annual salaryof $16,860.

Mississippis Low-IncomeWorking Families a Snapshot

This report defines a low-income working family as afamily with an income below 200%, or double, thefederal poverty threshold as defined by the U.S.Census Bureau. In 2004, twice the federal povertylevel for a family of four amounted to $38,614. Twicethe federal poverty level for a family of four is used asa proxy for self-sufficiency, which is earning enoughincome to cover all of a familys expenses without

government assistance. Map 1 illustrates theconcentrations of individuals living below 200% of the

federal poverty line by county.6

Most of the counties in the state have concentrationshigher than 40% of individuals living below 200% ofthe federal poverty line. With 69 of the states 82counties having such large percentages of theirresidents living below 200% of the federal povertyline, clearly issues relating to self sufficiency affect allparts of the state.

4 Working Poor Families Project, generated with data from the U.S. Census Bureau 2004 American Community Survey.5 Mississippi Department of Employment Security,

http://www.mdes.ms.gov/wps/PA_1_0_6A/docs/LMI/Publications/OES/OES%20by%20Group/MISSISSIPPI/43ms.pdf.6 Note: the Census 2000 data are the most recent data available for county by county analysis of poverty statistics.

Fast Facts Working Families

129,457 working families in Mississippi arelow-income

256,177 children live in a working familythat is low-income

56.8% of all working families with a minorityparent are low-income

Mississippi ranks 47th in the country for itsrate of low-income working families (39.1%)

Map 1Concentration of IndividualsEarning Below 200% of the

Federal Poverty Lineby County (2000)

Legend

Less than 30%

31 to 40%

41 to 50%

Greater than 50%

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Approximately four out of 10 working families withchildren (39.1%) in Mississippi are low-income.

While the percentage is slightly below Arkansas,Mississippi still has one of the three highest rates inthe country of working families that do not earnenough income to be economically self-sufficient(Chart 1).

The majority of working families that are low-incomeare comprised of parents that were born in the UnitedStates. Of the 129,000 low-income working familiesin Mississippi, only 1,628 (1.3%) of the families had aparent that was an immigrant.

Within working families there are differences by race.Among families with a minority parent, the rate ofworking families that are low-income is 56.8%.An estimated 71,297 of Mississippis workingfamilies with a minority parent are low-income. In

contrast, the rate of working families without aminority parent that are low-income is about half therate for families with a minority parent at 28.2%.Nevertheless, while the rate of low-income workingfamilies without a minority parent is low compared tothe rate for families with a minority parent, there arestill 58,160 white families that are working andlow-income.7

Children also play an important part in a familysability to attain economic stability. Children requirefood, child care and health insurance all of whichcost money. In 2004, there were 256,177 children

who lived in low-income working families. While39.1% of the working families in the state were low-income, 44% of the children in working families werein working families that were low-income. Children

who grow up in low-income families are also morelikely to have lower educational attainment andassociated economic success upon completing theirterminal degree than children who do not grow up inlow-income families.

While Mississippi has made gains over the last fiveyears in the percentage of adults aged 25 and olderwith a high school degree or equivalency, manyparents in low-income working families have notcompleted the 12th grade. Among low-income

working families, 31.4% have a parent that has notfinished high school or passed the GeneralEducational Development (GED) Test.

Additionally, 57.1% of low-income working families inMississippi have no parent with some postsecondaryeducation.8 Among Mid-South states, only LA has ahigher rate at 61.9%. Given the well-documentedrelationship between increased educationalattainment and higher earnings, the low-income

working family educational attainment statisticsare noteworthy.

Income Inequality in Mississippi

Mississippis income inequality ratio is one of thehighest in the country. Over the past couple ofdecades, income inequality has increased in the stateas average earnings have risen much more rapidly inthe top income quintile than in the bottom incomequintile (Table 1).

If a worker remains in the lowest quintile over time,

the worker will most likely not achieve self-sufficiencythrough raises or cost of living adjustments.

7 Working Poor Families Project, generated with data from the U.S. Census Bureau 2004 American Community Survey.8 Ibid.

Chart 1

Percentage of Working Families that are Low Income

45.0%

40.0%

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%AL ( 39) AR ( 49) LA ( 47) M S ( 48) TN ( 31)

U.S. 28.3%

Source: Working Poor Families Project, generated with data from theU.S. Census Bureau 2004 American Community Survey.

33.4%

41.5%3 8.6 % 3 9. 1%

30.6%

Table 1Income Inequality in MississippiEarly 1980s to Early 2000s

Dollar increaseE ar ly ' 80 s E ar ly ' 00 s P er ce nt C ha ng e p er Ye ar

Lowest Quintile $11,029 $13,456 22.0% $115

Middle Quintile $28,983 $37,162 28.2% $390

Highest Quintile $64,342 $95,406 48.3% $1,490

Source: Economic Policy Institute / Center on Budget and Policies Priorities, Pulling Apart:A State-by-State Analysis of Income Trends, January 2006.

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Low-income workers will also most likely not moveup the economic ladder by working harder. The aver-age low-income family in Mississippi already works2,467 hours a year the equivalent of 1.2 full-time

jobs. The level of effort expended by working familiesremains high regardless of family type. Married low-income working families work, on average, enoughhours to equal approximately 1.4 full-time jobs. Low-

income working families with a single father work, onaverage, 2,289 hours per year, and single mother low-income working families work about one full-time

job.9 Even though low-income working families areoften engaging in work more than 40 hours a week,they are still not earning enough to make ends meet.

Moving Forward in Todays Economy

As the global economy continues to mature,Mississippi needs to make strategic investments toequip all of its workers with the skills to compete forand generate high-quality jobs. Concurrently, thestate must also target investments toward supportsthat allow low-income workers to remain consistently

employed while upgrading their skills. These types ofinvestments are essential to meet the projecteddemand for jobs that require a skill set beyond ahigh school education.

The next three chapters will provide a road map toincrease Mississippis return on its investment in

working families. Chapter 2 focuses on the statessystem of workforce training for adults. Specifically,the chapter examines opportunities to enhanceaccess to training through the channels of the

community college system, the workforce investmentnetwork and the Temporary Assistance for NeedyFamilies program. Chapter 3 examines the statessystem of economic development incentives to create

jobs. Finally, Chapter 4 looks at the states system ofworkforce supports for people who are on the job.

Each of the chapters concludes with a series ofrecommendations for decision makers to consider.The recommendations focus large public investmentson Mississippis working families. By focusinginvestments on working families one of the statesstrongest assets Mississippi stands to improve itsoverall ability to address the challenges of low-wage

working families such as poverty, educational

attainment and economic mobility. As workingfamilies embrace opportunities to move up theself-sufficiency ladder, local communities will reapthe benefits of high-quality jobs, a strong businessclimate and increased tax revenues.

9 Ibid.

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CHAPTER 2:

Investing in Growth:Honing theCompetitive Edge

Success in the global economy depends largely onthe development and retention of a skilled workforce.Throughout the South, technology- and knowledge-based jobs are growing at a much more rapid pacethan jobs in the manufacturing and natural resourcesectors.10 In fact, through 2011, employment in thesectors of manufacturing and mining is projected toexperience a negative annual growth rate.11

Investments in the upgrade of education and skillswill pay long-term dividends by contributing to thegeneration of high-quality jobs and helping peopleachieve economic success.12

For families, economic stability also hinges on theacquisition of skills relevant to high-quality jobs. Toacquire the necessary skills to compete for high-wageemployment, working families must have access totraining systems that equip students with the tools topursue job opportunities that offer economicadvancement.

Targeted investments in a coordinated andcomprehensive workforce training strategy thatsimultaneously enhances the states competitiveadvantage in the global marketplace and improves

working families opportunities to achieve self-sufficiency will ultimately contribute to the statesoverall ability to improve the social and economic

outcomes of the state.

This chapter will begin with an overview ofMississippis educational and skill attainment. It willthen move into an assessment of state policies andoutcomes related to the acquisition of skills needed tomove into high-quality jobs. The chapter willconclude with a series of policy recommendations tofurther educational outcomes for the adult workforcethroughout the state.

Educational Attainment the Key toHigher Wages and a Strong Economy

Opportunities for gains in the educational attainmentof Mississippis workforce are numerous. Beginning

with basic literacy, approximately 64% of the statesresidents ages 16 and over have very low levels ofliteracy.13 Literacy challenges contribute to low rates

of attainment at the high school level. Amongworking-age adults, 347,343 workers do not have ahigh school degree or a GED.14

At the next level, only 29% of Mississippis youngadults enroll in post-secondary education. While thelevel of enrollment is tied with Louisianas and slightlyhigher than Tennessees, the rate trails Alabamas and

Arkansas. Given the low enrollment rates, it is notsurprising that only 27.8% of prime working-ageadults (25-54) have an associates degree or higher.15

10 Blueprint Mississippi: A Business Approach to Mississippis Future, Executive Summary. August 2004. Mississippi EconomicCouncil, www.msmec.com.

11 Mississippi Economic Review and Outlook. Mississippi Economic Outlook: Coast Reconstruction Fueling Economy,Marianne Hill; Mississippi Institutions for Higher Learning, June 2006.

12 Wheeler, Christopher H. Employment growth in America. What determines where good jobs are created? Bridges,Federal Reserve Bank of St. Louis, Winter 2004-2005.

13 Estimates calculated by the National Institute for Literacy, http://www.casas.org/lit/litcode/Detail.CFM?census__AREAID=25.Portland State University, 1996.

14 Working Poor Families Project, generated with data from the U.S. Census Bureau American Community Survey, 2004.15 Ibid.

Fast Facts Worker Training andSkill Development

Among working-age adults, 347,343workers do not have a high school degreeor GED

In Mississippi, college graduates earn, onaverage, $41,026 twice the rate of highschool drop outs

Approximately 33.2% of prime working-ageadults that are white have an associatesdegree or higher, while only 19% of prime

working-age adults that are African-American have attained similar levels ofeducation

If all of Mississippis people of color attainedequal education and earnings as whites, thestate would experience a $1.1 billionincrease in annual tax revenues

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Additionally, great disparities exist across race. Whileonly 12.5% of prime working-age whites have not fin-ished high school or passed the GED test, the rate forprime working-age African Americans is 25%. The

gap is even wider between the two sets of primeworking-age adults that have attained at least anassociates degree. Approximately 33.2% of prime

working-age adults that are white have an associates

degree or higher, while only 19% of prime working-ageadults that are African-American have attained a sim-ilar level of education.16 It should be noted that theeducational attainment rates for whites and African

Americans at the associates degree level are lowerthan the national averages. The national rate ofprime working-age adults that have attained an asso-ciates degree or higher is 37.3%.17

Educational attainment and skills acquisition are crit-ical for the attainment of jobs that pay self-sufficiency

wages. While a worker without a high school degreeearns, on average, $22,695 annually, a worker with anassociates degree earns $31,232. The attainment ofthe associates degree represents an increase of nearly40% in average annual earnings (Chart 2).Over the next 25 years, the growth rate for the states

African-American population will approach 15%,

compared to a growth rate of 8.5% for the states whitepopulation. Mississippis economic future is linked toreducing the educational disparities between thestates African-American and white populations.18 Ifdisparities were reduced, and all of Mississippis peo-ple of color attained equal education and earnings as

whites, the state would experience a $1.1 billion in-crease in annual tax revenues.19

In 2005, Mississippis per capita annual income of$25,318 was one of the lowest in the country.20

Given the relationship between earnings and educa-tional attainment highlighted in Chart 2, efforts tostrengthen the educational attainment of Mississippis

workers through training system enhancements fromhigh school and adult basic education through college

will positively affect economic competitiveness andgrowth statewide.

A Competitive Workforce Open to All

Mississippi uses four primary vehicles to connectlow-income adults to training and educationalopportunities. The four vehicles are: The Community and Junior College System

coordinated by the Mississippi State Board forCommunity and Junior Colleges (MS SBCJC);

Adult Basic Education and General EducationalDevelopment testing also coordinated by theMS SBCJC;

The Workforce Investment Network administeredby the Mississippi Department of EmploymentSecurity; and

Temporary Assistance for Needy Familiesadministered by the Mississippi Department ofHuman Services.

Each of the systems faces unique challenges and

opportunities in moving working adults towardmeaningful employment.

Community and Junior College SystemDuring the 2004-2005 academic year, the 15 colleges

within the SBCJC system enrolled 92,097 students infor-credit programs. Additionally, the SBCJC systemconnected 209,795 students to non-credit trainingprograms that focused on Adult Basic Education, GEDpreparation, Literacy, Workforce Development andContinuing Education.21 Table 2 illustrates the demo-

graphics of the students enrolled in for-credit programs.

16 Working Poor Families Project, generated with data from the U.S. Census Bureau 2004 American Community Survey.17 Ibid.18 Mississippi: A Sense of Urgency. Rural Responses to the New Economy. Southern Rural Development Center and MDC.

April 2002.19 Ibid.20 Bureau of Economic Analysis, http://www.bea.gov/bea/newsrelarchive/2006/spi0306.xls.21 Mississippi Public Community and Junior Colleges. Statistical Data 2004-2005. State Board for Community and

Junior Colleges Division of Accountability and Technology.

Chart 2Average Wages Earned by Educational Attainment forMississippi Adults aged 25-64 Working 35+ Hours

$50,000

$40,000

$30,000

$20,000

$10,000

$0

High SchoolDiploma

Diploma Degree Degree

$22,695$26,131

$31,232

$41,026

(2000)

SchoolighHathanLess Associates Bachelors

Source: National Center for Higher Education Management Systems,www.higheredinfo.org. Steven Ruggles, Matthew Sobek, Trent Alexander,Catherine Fitch, Roland Goeken, Patricia Kelly Hall, Miriam King, Chad Ronnade.

Table 2Public Community and Junior College DemographicsAcademic Year 2004-2005 Non-Duplicated Credit Enrollment

Percent of Students over age 24 38.4%

Percent Women 64.2%

Percent Minority 39.6%

Source: Mississippi Public Community and Junior Colleges, Statistical Data 2004-2005.

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Among first-time, first-year students, 76.1% returnedfor the spring semester during the 2004-2005academic year.22 In 2004, retention rates for studentstransitioning from the first year to the second yeardeclined to 58%. Mississippi does well in its retentionstatistics compared to other states (ranked 4th in thenation) from year one to year two. Even so, a rate of40% of those that enter the college system leaving

after one year represents a loss of potentiallyeducated students and ultimately workers.23

Approximately 51% of all first-time, first-year studentscompleted a bachelors degree within six years ofentering the college.24

For middle-income residents of Mississippi, thecommunity college system offers a reasonably afford-able education. Middle-income families earning, onaverage, $37,200 pay about 16% of their income tocover tuition, room and board after financial aid hasbeen received. Mississippi ranks 8th in the nationand 2nd in the Mid South in this measure ofaffordability. For the lowest-income families in thestate, families spend, on average, approximately 17%of their income on community college costs.25

Affordability is an important component of makingtraining systems accessible and available toMississippi residents. For very low-income studentsand working family members seeking a post-sec-ondary education, scholarships and grants-in-aid areessential for bridging the affordability gap. One way

to measure a states investment in need-based aid isto compare a states level of need-based aid fundedthrough state resources with the states level ofneed-based aid funded through federal Pell Grantresources. While a number of states invest amountsequal to 25% or more of the federal Pell Grantcontribution, Mississippi invests approximately onepercent of the amount. An increase in state-fundedaid for training through the community college systemcould be an important tool for increasing enrollmentand retention at post-secondary institutions

especially among the states low-income families.

The state also does not provide FTE resources tosupport non-credit career classes; therefore, the costof these classes is typically covered through higherstudent tuition. A number of other states do providesupport for non-credit career classes. In NorthCarolina, for example, the state will provide fundingfor non-credit career classes that upgrade job-relatedskills. Non-credit career classes are important

training tools for low-income working adults becausethey allow workers to retain their jobs while enhanc-ing their skill sets to compete for higher wages.Non-credit career classes are also usually shorter induration than a degree course, which increases thelikelihood of completion.

Adult EducationThe Adult Basic Education (ABE) program and GEDtesting is coordinated by the State Board for Juniorand Community Colleges. Adult Basic Educationpotentially serves as the gateway for low-wage andlow-skill workers to obtain training and ultimatelyhigher-wage jobs. Given the large percentage offamilies with a parent without a high school diplomaand the high rate of workers with similar levels ofeducational attainment, a well-functioning ABE pro-

gram is critical to any efforts to start the progression ofhard-to-serve populations up the career ladder.

Analysis of the number of adults without a highschool diploma relative to the number of adultsenrolled in adult education reveals that the potential

opportunity for adult education statewide drasticallydwarfs the number of students that take adult educa-

tion classes. Only 7.6% of all adults in Mississippiwithout a high school diploma are involved in anadult education class.26

The ABE program serves over 25,000 people annu-ally, with 60% of the participants being residents ofcolor and 40% white.27 For students entering theadult education system at the most basic levels, 29%

show improvement. The rate of improvement is simi-lar (31-33%) in each of the three beginning and inter-mediate Adult Basic Education levels. The programcompletion rate is 51% and 55% for Adult SecondaryEducation Low and High Levels respectively.28

Goal setting is an important tool for moving studentsand workers beyond the entry-level training offered byadult education. Adult education students who set

goals experience high levels of success. Eighty-threepercent (83%) of all unemployed students who en-tered the program with a goal of attaining employ-ment met their goal. Eighty-seven percent (87%) ofthe students who entered the program with a stated

goal of beginning post-secondary education or train-ing attained their goal of further education. While thesuccess rates of students that set goals of employmentand training is high, an emphasis on targeting theadult education system towards the acquisition ofskills to move into additional training for higher-paying jobs does not appear to be a priority. Only oneout of five students (20.1%) enrolled in adulteducation set a primary or secondary goal of entering/

retaining employment or entering post-secondarytraining. 29

22 Ibid.23 National Center for Public Policy and Higher Education, 2006.24 Measuring Up 2006: The State-by-State Report Card for Higher Education, 2006,

http://measuringup.highereducation.org/compare/state_comparison.cfm.25 Ibid; National Center for Public Policy and Higher Education 2006.26 Working Poor Families Project, generated with data from the U.S. Department of Education,

www.ed.gov/about/offices/list/ovae/pi/AdultEd/datatables/2003-2004enroll.xls.27 Measure and Methods for the National Reporting System for Adult Education. State Board for Community and Junior Colleges,

11/21/2005.28 Measure and Methods for the National Reporting System for Adult Education. State Board for Community and Junior Colleges,

11/21/2005.29 Ibid.

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In addition to program emphasis, another factorcontributing to low completion rates in the AdultBasic Education System could be a low rate of invest-ment in the program. Mississippi annually spends$6.52 per working-age adult without a high schooldiploma on adult education. Mississippi trails all MidSouth States in this area (Chart 3). 30

As mentioned earlier, ABE and GED testing, programsthat are well-integrated into the community collegesystem, offer opportunities for students to build careerpathways to achieve economic success. With eachadditional level of educational attainment, students

gain more options to earn higher wages. A number ofcommunity colleges within the state have taken thefirst step towards linking their ABE and GED testingprograms to post-secondary studies. CoahomaCommunity College, for example, makes a scholar-

ship available to students completing the GEDtesting program.

Workforce Investment NetworkIn 2004, the state legislature consolidated most of thestates workforce training programs outside of thecommunity college system into the MississippiDepartment of Employment Security. Additionally,the legislation created four Workforce Areas each

governed by a workforce investment board (WIB).The system was adjusted to allow each WIB to have

the latitude to create a workforce investment networkthat most readily met the needs of the people living inthe WIBs respective communities. Each workforcearea relies on a one-stop system to connect partici-pants to programs to advance employment outcomes.

Much of the system is designed to tailor the structureof the workforce programs to the local economy. Thelocal WIBs establish training priorities and determinelevels of workforce supports and training partnersto meet the needs primarily of unemployed anddislocated workers. Any efforts to target specialpopulations (for example, adults in poverty) arelocalized with no state mandates beyond federal

WIA requirements.

During the 2004 program year for the state WorkforceInvestment Act Program, nearly 41,000 participantsincluding adults, youths and dislocated workersexited the program. Over 22,000 of the people whoexited the program were adults. Most of the 22,986adults who exited the program received core services(80.5%). Core services included outreach, intake and

eligibility determination, as well as job search andplacement assistance.

30 Working Poor Families Project generated with data from 2002-03 expenditure data submitted to the U.S.

Department of Education (numerator) and 2004 Census data on number of adults 18-64 without HS/GED (denominator).

Chart 3State Resources Allocated for Adult Educationper Adult without a High School Degree or GED

$80.00

$60.00

$40.00

$20.00

$0.00AL AR LA MS TN

U.S. $46.65

Source: Working Poor Families Project, generated with data from the 2002-03expenditure data submitted to the U.S. Department of Education (numerator) and

2004 Census data on number of adults 18-64 without HS/GED (denominator).

$11.68

$68.24

$17.94$6.52 $7.25

(2003)

Programs to Watch: CoahomaCommunity College

GED Scholarship Program

Coahoma Community College (CCC) offers afull first-semester scholarship to all of itsstudents that complete GED training andreceive a GED diploma through CCC.

At the end of the 2005 academic year, 11.2% ofCCCs full-time students had completed theirentrance requirements through GED training nearly two percentage points above the stateaverage. The program is a good example of thestate Adult Education / GED Testing systemestablishing a pathway towards gainfulemployment beginning with basic educationand continuing with post-secondary classes.

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For adults that require additional assistance tobecome job ready, the state makes intensive servicesavailable for workers to develop individual employ-ment plans, to receive specialized assessments andcase management. Only 7.8% of those exiting theprogram received core and intensive services.

In Mississippi, training services are available foradults that are determined to need additional trainingto attain employment after the completion of core andintensive services. With a strong emphasis on theprovision of core services, WIA training was providedto only a small percentage of Mississippi programparticipants. Of the adults who exited the program,only 11.7%, or approximately 2,689 exiters, received

training.31

This rate lagged the rates for all of thebordering states, where training rates exceeded 55%(Table 3).

It should be noted that only California and New Yorkexit more people from WIA programs than Missis-sippi. With a very large WIA program, Mississippihas the potential to expand the training component ofits WIA services with great effect. By doubling WIAtraining rates and targeting training towards jobpreparation for employment that offers upward mobil-ity, the WIA program could contribute to the long-

term economic stability of the state. Ultimately, thosethat would receive training targeted towards economicadvancement would earn more money, generate moretax revenue and use fewer state employment servicesonce employed.

Temporary Assistance for Needy FamiliesThe states Temporary Assistance for Needy Families(TANF) program also has some flexibility to dedicateresources towards education and training. Even withrecent changes to federal regulations requiringincreased work participation rates among TANFcaseloads, education and training opportunities stillexist and can contribute to the overall goal of

increased work participation rates. For example,non-credit, vocational education and associatesdegree-level courses that are related to an occupationqualify as core activities under the currentregulations.32

Many of the people who receive TANF assistanceexperience many barriers to employment. As such,people leaving TANF for work may enter jobs with low

wages. One strategy to increase opportunities forpeople leaving TANF could be to increase trainingopportunities available to TANF participants. In2004, 2.5% of all Mississippi TANF recipients wereenrolled in education and training activities.33

If Mississippi doubled those efforts annually over thenext three years, Mississippi would lead the nation inthe percentage of TANF recipients enrolled in training.By acting strategically, the state could simultaneously

grow the employability of its TANF participants whileusing the education and training activities to meetfederal work participation requirements.

Table 3Rate of Training Services Received by Adult WIA Exitersfrom April 2004 March 2005Mississippi and its Border States

Alabama 9,341 89.9% 8,397

Arkansas 1,052 74.5% 784

Louisiana 5,796 73.1% 4,237

Mississippi 22,986 11.7% 2,689

Tennessee 6,187 56.1% 3,471

Source: 2004 WIASRD Data Book. Social Policy Research Associates. February 2006.www.doleta.gov/performance/results/py_2004_WIASRD_databook.pdf.

Calculated Numberof Exiters that

Received TrainingNumber of Exiters

Percent of Exitersthat Received

Training

31 2004 WIASRD Data Book. Social Policy Research Associates. February 2006,www.doleta.gov/performance/results/py_2004_WIASRD_databook.pdf.

32 Elizabeth Lower-Basch, Evelyn Ganzglass, Elisa Minoff, Sharon Parrott and Liz Schott, Analysis of New Interim FinalTANF Rules. Center on Budget and Policy Priorites, Center for Law and Social Policy, http://www.cbpp.org/7-21-06tanf.pdf.

33

U.S. Department of Health and Human Services, Table 4A Average Monthly Number of Adults Engaged in Work by WorkActivity for Families Counted as Meeting the All-Families Work Requirements, FY2004.

Mississippi Basic Skills TrainingTax Credit

The Mississippi Basic Skills Training Tax Creditprovides an income tax credit to businesses thatsponsor trainings through the community and

junior college system.

The credit specifically targets the costs thatemployers incur while providing training for anemployee: To enhance skills needed to perform an

existing job; To improve job performance; and/or To prepare an employee for a designated

career path.During the 2006 Fiscal Year, the credit receivedlittle use as only an estimated $120,000 in tax

credits were claimed on business tax returns(Mississippi Tax Expenditure Report 2005). In2006, the Legislature voted to extend the creditfor two more years until 2008.

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From the late 1990s to 2006, the TANF caseload inMississippi decreased from more than 60,000 peopleto approximately 13,354.34 Some participants exitedthe program for work opportunities, others droppedout of the program and still others were no longer ableto participate in the program once they reached the60 month lifetime program time limit. Limitedperformance data show that Mississippi ranks 37th

nationally and 3rd in the Mid South in its AdultEmployment Retention Rate at 56.8%.35 Theretention rate measures the extent to which TANFrecipients who have entered work remain employedfor three consecutive quarters following their initialplacement.36

While some data on the level of TANF leavers andwork participation rates are available, there is nosource of information about TANF exiters ability toachieve economic self-sufficiency. Some states, like

Arkansas for example, measure the percentage ofTANF exiters that earn above poverty level wages.The data allow the state to measure the TANFprograms success in moving its participants towardsself-sufficiency, which reduces the likelihood thatexiters will return to the program in the future.

Measuring the Return

All efficiently run companies invest in systems toprovide timely, accurate and comprehensive data oncompany performance to maximize shareholderreturn. These systems include a process for settingoutcome-based goals and provide for the ongoing andregular measurement of companies attainment of

their goals. Systems and programs that achieve orsurpass goals are then enhanced, while systems andprograms that do not achieve the goals are improvedto facilitate goal attainment.

To increase the return on Mississippis investment inworkforce training, the state must develop systemsthat collect data on the attainment of training programoutcomes. For example, how many WIA and TANFexiters earn above 100 or 200 percent of poverty-level

wages? Additionally, efforts to make the data publiclyavailable will also contribute to program accountabil-ity. In Arkansas, the collection and

reporting of such data led to the creation of a careerpathways program that serves thousands of TANFparticipants annually through basic education, bridgeprograms and the community college system. Theprogram was launched when the data showed thatfewer than 10% of all TANF exiters were earningabove poverty-level wages.

The SBCJC does have a system in place to set goalsand measure its performance against those goals.Two goals relevant to the discussion on workforcetraining include 1) the cumulative grade point average(GPA) for community college students that transfer tostate four-year colleges being equal to or greater thanthe GPA for native students, and 2) 90% of students

who complete a Vocational Technical Training pro-gram being positively placed. As of 2005, the GPAof community college transfer students (2.78) wasalmost equal to the GPA of native students (2.79).

Additionally, 88.9% of all Vo-Tech students werepositively placed.37

34 Phone and e-mail correspondence interview with Cheryl Sparkman, Director Division of Economic Assistance,Mississippi Department of Human Services, 1/31/2007 2/1/2007.

35 Working Poor Families Project generated with data from U.S. Department of Human Services TANF High Performance BonusRates, Office of Family Assistance, High Performance Bonus Awards, Performance Year 2004.www.acf.hhs.gov//programs/ofa/HPB/2004/table03a.htm#fn3, Table 3(A).

36 Phone interview with Cheryl Sparkman, Director Division of Economic Assistance, Mississippi Department of Human Services.37

Mississippi State Board for Junior and Community Colleges Program Performance Indicators and Measures FY 2005,http://www.sbcjc.cc.ms.us/pdfs/nonfinperfindfy2005.pdf.

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Building on the foundation of the SBCJCs trackingsystems, the SBCJC could look at adding measure-ments that track placement of low-income studentsand the progress of students that receive remediation.

Another important measure to track could include thepercentage of ABE students that transition into post-secondary studies and obtain a certificate or degree.This measurement would yield valuable information

about the development of a career path leading tohigher-wage opportunities. Additionally, within theAdult Education program, measurements could becreated to track the percentage of Adult Educationstudents that earn above poverty-level wages one yearafter placement.

Within the Workforce Investment Network and theTemporary Assistance for Needy Families programs,state measurement activities could be enhanced bydeveloping self-sufficiency goals and tracking progresstowards those goals annually. Specifically, the statecould set goals around moving a certain percentage ofexiters into jobs that pay above poverty-level wages.

Annually, the state could track the progress of the pro-gram exiters and report the percentage of exiters thatmeet or exceed the wage target. Earnings data follow-ing the exit of the two programs would provide thestate with good information about the programscapacity to move participants towards self-sufficiency.Data could be used to make program enhancementsover time.

Increasing the Return by Honing theCompetitive Edge

Adult educational attainment and enrollment inpost-secondary classes in Mississippi is low comparedto Mississippis border states and the rest of the na-tion. Additionally, significant disparities exist acrossrace. In the midst of low levels of attainment, the

community and junior college system provides one ofthe most affordable post-secondary options in thecountry. However, for those who still cannotafford college, very few resources exist to bridge theaffordability gap. Other programs with the flexibilityto provide training are currently targeted towardsother areas.

Investments in the states workforce education andtraining systems will yield long-term benefits for

working Mississippians, businesses and the overalleconomies of local communities. By increasingaccess to training for working families, people aroundthe state will have additional opportunities to upgradetheir skill sets and move into higher-wage work. Aspeople move into higher-wage work, communities will

benefit through increased local savings and economicactivity. The following page summarizes Mississippisinvestment opportunities to increase the return on

workforce training systems and programs.

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Investment Opportunities Honing the Competitive Edge

STRENGTHENING POLICIES

Post-secondary TrainingFor students from low-income working families, veryfew need-based resources exist at the state level.

While a number of states invest in need-based aid inamounts equal to or exceeding 25% of the federalPell Grant contribution, Mississippi invests state re-sources amounting to about one percent of its an-nual Pell Grant allocation. Likewise, the state doesnot provide resources for non-credit career trainingcourses a valuable tool for people who are already

working and are looking to rapidly upgrade theirmarketable skills. To address affordability challengesfor the states lowest-income working families, thestate could:

Pilot the use of two pools of state funds directed atincreasing affordability for traditional and nontra-ditional students. For traditional students, thepool of funds would be used to provide grants foracademically qualified students without the re-sources to pay for college. For nontraditional stu-dents, the pool would target workers at least 24 orolder who are not qualified for Pell Grants.Funds could be used for associates degree, creditcertificate and non-credit vocational programs.

Adult EducationAbout eight percent of all the adults in the state ofMississippi who have not obtained a high schooldiploma or passed the GED test are involved in adulteducation. One possible reason for the low levels ofinvolvement could be the lack of a recognizable ca-reer path from Adult Education to post-secondarytraining. Only 20% of the adults that enroll in AdultEducation set a primary or secondary goal of enter-ing employment or post-secondary education. An-other reason could be very low levels of investment

by the state in the Adult Education program. On av-erage, Mississippi spends $6.52 per adult who hasneither received a high school diploma nor passedthe GED test. Mississippi could: Double the available resources per adult without a

high school education or equivalency from $6.50to $13.00 for Adult Education. Increased

resources could be targeted towards programswith high levels of work and educational goalattainment and serve as the first step on a path foradditional education and ultimately higher wages.

Workforce Investment Act and Temporary Assis-tance for Needy FamiliesMississippi exits one of the largest groups of peoplein the country from its WIA program. While thenumber of people who exit the program is very high,only a small percentage of exiters receive training(11.7%). Likewise, only a small percentage of peopleenrolled in the TANF program were enrolled in train-ing (2.5%). Mississippi could strengthen trainingoptions available to its unemployed and verylow-skilled workers by: Targeting more WIA resources towards education

and training; and Increasing training options available to TANF

participants with the goal of doubling the rate ofparticipants in training activities annually for thenext three years. Training programs could befocused on those activities that allow the state to

meet its federal work participation requirements.

PROGRAM MEASUREMENT ANDACCOUNTABILITY

To increase the return on Mississippis investment inworkforce training, the state must employ systemsthat set goals, collect data on the attainment of train-ing program outcomes and make the data publiclyavailable. The State Board for Community and Jun-ior Colleges does have a system to set goals andmeasure their attainment. The SBCJC even makesinformation about their progress available to thepublic on its website. Other programs, like WIA andTANF, set goals and track federally mandated indica-tors; however, only a small number of indicators pro-

vide information on program outcomes. Mississippicould improve its measurement and accountabilitysystems within its training and employmentassistance programs by: Tracking the percentage of low-income students

positively placed after completing studies withinthe community and junior college system;

Tracking the earnings of Adult Education gradu-ates benchmarked to 100% and 200% of poverty-level wages;

Tracking the percentage of Adult Educationgraduates that transition into post-secondaryeducation and obtain a certificate or degree;

Tracking the earnings of TANF exiters bench-marked to 100% and 200% of poverty-level wagesone year after leaving the program;

Tracking the earnings of WIA exiters bench-marked to 100% and 200% of poverty-level wages;and

Ultimately using the data to establish goals, trackprogress and make information publicly available(similar to the SBCJC Program PerformanceReport) and to make program enhancements overtime.

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While enhancements to Mississippis education andtraining efforts are critically important for the stateto increase the return on its investment in workingfamilies, they are only part of a comprehensivestrategy to move Mississippis working familiestowards self-sufficiency. Education and trainingefforts may prepare the workforce for high-wage jobs;however, in isolation, they do not create the type of

jobs that provide financial security for workingfamilies. The other component of a comprehensivestrategy to increase the return on Mississippisinvestment in working families includes efforts to

generate high-quality jobs. Mississippis economicdevelopment policies provide an opportunity for thestate to assist businesses and ultimately to generate

jobs that contribute to economic advancement.

Mississippis Economy

Mississippi businesses are the lifeblood of our stateseconomy. In 2004, Mississippi businesses employed1,080,524 workers and paid annual wages totaling$30.3 billion.38 While annual aggregate wagenumbers have risen over the past couple of years,enthusiasm for the rise is tempered by an abundance

of low-wage work. More than one out of three jobs(35.2%) in Mississippi are in low-wage occupations.39

Forecasts through 2012 suggest that the prevalence oflow-wage work will continue. With the exception ofnurses, operations managers and truck drivers, most

job growth will occur in low-wage service sector em-ployment requiring little skill preparation (Table 4).40

The dominance of the service sector as a source ofemployment in Mississippi is noteworthy given that

many service sector jobs require no more than a high

school diploma and pay low wages while offering fewbenefits. As these jobs grow in number, workingfamilies that fill the jobs will meet challengesachieving self-sufficiency no matter how hard they

work given the low wages and lack of benefitsassociated with many of the high-growth occupations.

38 Mississippi Department of Employment Security.39 Working Poor Families Project, generated with data from the Bureau of Labor Statistics Occupational Employment Statistics

Program, November 2004.

40 Occupational Employment Projections. Year 2002 to Year 2012 State of Mississippi. Mississippi Department of EmploymentSecurity.

CHAPTER 3:

Tools for Success:Mississippis EconomicDevelopmentPrograms

Fast Facts Economic Development

In 2004, Mississippi employed more than onemillion workers who earned over $30 billionin wages

One out of three Mississippi jobs (35.2%) arein low-wage occupations

54,515 Mississippians hold more than one job In FY 2006, Mississippi invested over $67

million in economic development incentivesthat supported 11,234 jobs

Table 4Top 10 Occupations with Highest Projected Growth in Mississippi

Cashier $14,640 2565 High School Diploma

Retail Salesperson $19,860 2210 High School and some onthe-job Training

Registered Nurse $45,590 1360 Bachelors Degree

Waiter and Waitress $13,290 1005 High School Diploma

Laborer and Freight, Stock,and Material Mover $19,340 905 High School Diploma

Combined Food Preparation, ServingWorker and Fast Food Worker $13,860 820 High School Diploma

Truck Driver, Heavy and Tractor Trailer $30,900 770 High School and some on-the-job Training

General Operations Manager $66,310 765 Bachelors Degree

Food Preparation Worker $13,700 720 High School Diploma

Nursing Aide, Orderly and Attendant $16,060 685 High School and some on-the-job Training

Source: Mississippi State WIA and Wagner-Peyser Plan. Updated May 2006.

AverageAnnual Wage

Projected AnnualOpenings

Education Required

(2001-2012)

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At the same time, the service sector also containsmost of the states fastest growing occupations mostof which pay self-sufficiency wages. Participation inthe fastest growing occupations, however, will requirehigher levels of education (Table 5).

Employment trends indicate that the service sectorwill continue to be a job driver in the future. Partici-pation and ultimately movement towards self-suffi-ciency will depend on the access to and attainment ofskills and education. As of the first quarter of 2006,79% of Mississippis jobs were in service producingindustries.41

The employment projections illustrate the evolution ofMississippis economic landscape. While the manu-facturing sector was once one of the most robustemployment generators in the Mississippi economy,many manufacturing jobs have moved with the com-panies to developing nations. Over the last decade,the sector has consistently lost jobs. From 1995 to2005, the sector experienced declines in total aggre-

gate wages in eight out of 10 years for an overall in-

crease of 25% over the course of a decade. At thesame time, the health care and social assistance,business services, and leisure and hospitality sectorshave all experienced double digit growth rates.42

Throughout the last ten years, this evolution has af-fected various parts of the state in different ways. Forexample, the states greater metropolitan areas all ex-

hibit unemployment rates that are near or lower thanthe national average. As of October 2006, DeSotoCounty (south of Memphis), the Jackson suburbs andHattiesburg have unemployment rates of 4.4% orlower.43 The low rates are likely tied to higherconcentrations of an educated workforce and thepresence of job opportunities that match the skill setsof the workforce. In rural areas, however, theevolution has had a negative effect on workingfamilies. All six of the states counties with doubledigit unemployment are rural. Due to lower levels ofpopulation and educational attainment, rural areasare less able than a large city to absorb the loss of alarge employer and are likely to generate the low-

wage service sector jobs listed in Table 4 over time.

41 Hill, Marianne. Mississippi Economic Review and Outlook. June 2006. Page 13.42 Ibid, page 57.43 Labor Market Data Publication, August 2006. Mississippi Department of Employment Security.

Note: The Gulf Coast metro areas exhibited low unemployment rates relative to the rest of the state prior to Hurricane Katrinaconsistent with other urban areas. Since the storm, rates have risen.

Table 5Top 10 Occupations with Fastest Projected Growth in Mississippi (2001-2012)*

Phy sica l T he rap y Ass is tan t $3 4,64 0 5 1.1% Voca tion al E du ca tion o r Asso ciates Deg re e

Medical Assistant $21,570 50.8% Vocational Education or Associates Degree

Respiratory Assistant $38,680 50.5% Vocational Education or Associates Degree

50.0% Vocational Education or Associates Degree

Self Enrichment Education Teacher $31,480 47.3% Vocational Education or Associates Degree

Art, Drama and Music Teacher(Post Secondary) $46,680 44.8% Bachelors Degree

Occupational Therapist $61,330 42.4% Bachelors Degree

Computer Software Engineer $57,370 41.7% Bachelors Degree

Medical Records andHealth Information Technician $24,720 41.6% Vocational Education or Associates Degree

Surgi cal Technologist $27,810 41.2% Vocational Education or A ssociates D egree

Source: Mississippi Department of Employment Security; O*Net Online www.online.onecenter.org.

*Note: Only the Fastest Growing Occupations with at least 30 annual openings were listed in this table.

AverageAnnual Wage

Projected AnnualOpenings

Education Required

Cardiovascular Technologist andTechnician $38,220

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Mississippis Workforce

More than 1.3 million people over the age of 16 wereengaged in Mississippis workforce in 2004. The laborforce participation rate for the state was 61.6% -slightly below the national participation rate of 66%but within 1.8 percentage points of Mississippisneighboring states. Of the 1.3 million people in the

labor force, 47.7% were women, and over a third wereminorities.44

For those in the labor force, identifying stable jobsthat pay self-sufficiency wages can be challenging.Nearly 11 percent (10.8%) of all Mississippians who

were 18-64 years of age were not fully employed.Additionally, 54,515 Mississippians held more thanone job in 200545 The data on under-employmentand second jobs are not surprising. From 1979 to1999, average earnings per job in Mississippi

decreased from 79% of the national average to 74%.

46

Likewise, in 2005, over 27% of all wage and salaryworkers were employed in low-wage jobs.47 Growthin good-paying jobs coincident with properly trained

workers filling them is important for the economicadvancement of Mississippis residents and commu-nities. Without changes occurring in the overallemployment mix, working families will have fewchances to grow their incomes for the foreseeablefuture.

Generating Jobs Incentives forIncreasing Mississippi Employment

Mississippi has a mixed track record in the use ofeconomic development subsidies to generate large-scale employment opportunities. Two notablecompanies that have received several hundred milliondollars in subsidies from the state of Mississippi are

Nissan North America and the Northrop GrummanCorporation. Today, the two companies employ morethan 17,000 people and are the two largest manufac-turing employers in the state.48 In addition to beingstrong, financially viable companies with longevity,they both offer their employees self-sufficiency wages.

At the other end of the spectrum, the state provided aloan guaranty for the construction and start-up of abeef processing plant in Oakland. The project wasunable to get off the ground and closed down afterthree months of operations, costing the state $40 mil-

lion dollars.49

Mississippis bundle of incentives for economic devel-opment includes a number of loan and grant pro-

grams. Most of the programs are targeted towardsinfrastructure development or capital projects and donot have job creation or associated wage and benefitrequirements. Several of the program outputs aretracked in an annual report titled the Mississippi De-

velopment Authority Program Overview. For FY 2006

MDA reports that $67,727,469 was approved orawarded to 458 projects that supported 11,234 jobs.The report does not include funds spent on MDAprojects through tax expenditures (revenue that isforegone through the administration of credits andrebates) through the awarding of credits and rebatesto companies.

44 Working Poor Families Project, generated with data from the Current Population Survey 2004. www.bls.gov/lau/table14full04.pdf.45 Working Poor Families Project, generated with data from the 2005 Basic Monthly Current Population Survey.46 Mississippi: A Sense of Urgency. Rural Responses to the New Economy. Southern Rural Development Center and MDC. April 2002.47 2005 Basic Monthly Current Population Survey. PRB Analysis.48

Mississippi Development Authority Top 100 Mississippi Manufacturers Based on Employment.49 State Pays off Beef Plant Debt, John Faquay. Clarion Ledger, June 3, 2005.

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Advantage JobsThe states primary business assistance program,

Advantage Jobs, does require full-time job creationgoals with wage standards and health coverage.Companies that meet the eligibility requirements forthe incentive receive cash rebates of Mississippi with-holding taxes for up to 10 years. There are currentlyno requirements to target a portion of the jobs as-

sisted towards low-income workers. Table 6 illus-trates the minimum job creation and wage targets.

The final benefit received by a company is tied to thenet economic benefit received by the state. Hence,companies that support jobs with higher wages re-ceive proportionally larger incentive payments. Therange of average annual salaries for the counties runsfrom $20,281 to $44,168; the average annual statesalary is listed at $29,190. It should be noted that

while the Advantage Jobs program targets distressed

communities, it does not contain provisions to targetlow-wage workers.

The Mississippi Development Authority does trackthe performance of Advantage Jobs quarterly in itsProgram Overview. Through FY 2006, the AdvantageJobs program assisted 12 projects that supported1,743 jobs. Of the 12 projects assisted, five were lo-cated in developed counties, five were located inmoderately developed counties and two were locatedin the least developed counties. Projects assistedincluded 10 manufacturers and two technologyintensive enterprises.50 While the report represents astrong foundation for monitoring its program outputs,

enhancements could be made to bring more clarityto the level of investment, to identify who actuallybenefits.

Momentum MississippiIn 2005, the state legislature passed the MomentumMississippi legislation to target high-growth industriesin the manufacturing and service sectors. Some of the

goals of the legislation included: 1) the alignment ofincentives and resources towards the development ofthe high-growth industries; 2) an increase in publicand private research and development funding toaid with technology transfer and to commercializeinnovation; 3) improvement of the profitability andproductivity of existing businesses.

Momentum Mississippi represents an effort to expandMississippis current incentive programs to include afocus on more high-growth industries. Momentumlooks to achieve its goals through a number of newloan and grant programs. It also broadens existingprograms to focus on technology and investmentsthat increase global competitiveness. Through FY2006, few of the new Momentum programs had beentapped; however, two technology intensive enterprisesthat received support through an expanded

Advantage Jobs did occur.51

50 Mississippi Development Authority Financial ResourcesDivision. MDA Program Overview FY 2006 Summary forPeriods 7/1/2005-6/30/2006.

51 Ibid.

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Table 6Advantage Jobs Job Creation and Wage Requirements

Source: Mississippi Development Authority, http://www.mississippi.org/content.aspx?url=/page/3138&.

Industry Job Creation Requirement Wage Requirement

Any Business except retailand gaming

Data / Information Processing

Manufacturing

Research and Development

Technology Intensive

10 full-time jobs in the leastdeveloped counties

25 full-time jobs in the moderatelydeveloped and developed counties





10 full-time jobs

10 full-time jobs

125% of the lesser of the averageannual wage of the state or county

100% of the lesser of the averageannual wage for the state or county



150% of the state wage


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Jobs Tax CreditThe jobs tax credit provides a credit of up to 10% of acompanys payroll against corporate income taxes. As

with the Mississippi Advantage Jobs program, coun-ties with higher levels of distress have lower job cre-ation targets. While the credit is useful for generatingemployment, it does not target improved employmentoutcomes for low-income workers. The Annual Tax

Expenditure Report estimates that employers claimcredits of about $4,000,000 per year against their cor-porate income tax. However, there is no way to an-swer questions about the number of jobs that areassisted through the credit due to the way it is re-ported through the tax filing system.

Mississippis Small Businesses

Approximately 9.4% of Mississippis low-income fami-lies have members who are self-employed. Withnearly one out of ten low-income working familieshaving at least one parent who is self-employed, smallbusinesses play an important role in moving familiestowards self-sufficiency. Mississippis small business

outcomes are comparable to those of surroundingstates (Table 7).

Small businesses are growing statewide and representa significant employment generator. Given the em-ployment opportunities available to working familiesthrough the small business sector, access to capitalfrom public and private sources for the start-up andexpansion of small businesses is important.

In FY 2006, the state provided $1.75 million in loansto 29 projects through the Minority Business Enter-prise Loan Program. The investment assisted 115

jobs. Efforts to increase access to capital to generate

quality jobs are an important component of movingfamilies towards self sufficiency. Additionally, activi-ties that stimulate entrepreneurship and grow strongbusinesses that pay good wages from within the statecould also have a positive effect on the economies oflocal communities.

Increasing the Return Tools for Success

While training and education are important compo-nents of a comprehensive strategy to move workingfamilies towards self-sufficiency, good-paying jobs

with benefits must be available to make the invest-ment of working family resources worthwhile. Missis-sippis job projections suggest that much of the states

growth over the next five to six years will primarilyoccur in low-wage occupations that require few skills.

With the economy evolving from a strong manufac-turing base of employment to a service-dominated en-

vironment, efforts are needed to generate high-qualityjobs. Mississippi offers several incentives to stimulategrowth and development. Of the incentives, somefocus specifically on the support of high-wage jobs

with benefits. At the same time, the bundle of incen-tives could be strengthened by targeting and includingbenchmarks for providing jobs for the states low-wage

workers. Efforts to enhance the states monitoringsystems could also provide good information on Mis-sissippis return on its investment in economicdevelopment. Finally, small businesses and entrepre-

neurship development offer opportunities throughoutthe state for working families to gain economicstability. The following page provides an overview ofMississippis opportunities to increase the return onits economic development investments.

Table 7State Small Business Profiles

U.S. Missi ssippi Alabama Arkansas Louisiana Tennessee

Total Numberof Firms

Firms withEmployees

New Firms withEmployees

Small firmpercent of non-farm sector

23,974,500 197,586 323,891 222,542 347,436 471,316

Percent of total 23.7% 27.4% 26.8% 27.8% 27.7% 23.3%

Small firms 99.7% 96.8% 97.3% 97.1% 97.6% 97.2%

Number 580,900 6,141 9,413 7,852 9,875 17,415

Growth rate 4.9% 2.0% 4.4% 8.3% 6.2% 1.6%

50.1% 50.0% 49.7% 48.8% 53.9% 45.1%

Source: U.S. Small Business Administration, Office of Advocacy.

(2005)

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Strengthening Programs

The states main business assistance program,Advantage Jobs, is structured to provide incentivesfor high-quality job growth. Companies are re-

warded with higher incentives for investing in lessdeveloped counties and providing higher-quality

jobs. The program, however, does not contain anyprovisions for targeting low-wage workers. Buildingon the strengths of a program that includes wagestandards and health insurance requirements in ex-change for state subsidies, the state could: Include a provision to require employers to fill a

portion of the newly created jobs with low-wageworkers. Companies that employ a high numberof low-wage workers could receive a more

generous subsidy.

Program Measurement and Accountability

The state does provide a quarterly report on severaldifferent incentive programs. The information listedincludes the aggregate amount of projects fundedthrough a certain program, the number of projectsapproved and the estimated number of jobs cre-ated. While the report provides a starting point formeasuring the return on the states economic deve-

lopment investment, it provides limited informationon who benefits from each program.To enhance the utility of the monitoring systemsused to assess the states economic developmentprograms, the state could:

Track the percentage of low-wage workers thatmoved into jobs assisted through state incentivepayments;

Track the earnings of workers assisted throughincentive programs one year after the assistance

was received. Measures could include the per-centage of workers earning above poverty-level

wages and the percentage of workers earningabove 200% of poverty-level wages;

Increase the transparency of the Jobs Tax Credit.While employers claim an estimated $4 million

dollars in credits annually, there is currently noway to answer questions about the number ofjobs assisted and the quality of the jobs.Efforts could be made to annually report thenumber and quality of jobs assisted in the TaxExpenditure Report; and

Annually, the incentive reports could be publiclyreleased in aggregate form on agency websites toencourage legislative and programmaticaccountability.

Investment Opportunities: Tools for Success

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As seen in Chapter 3, low-wage employment is acharacteristic of Mississippis economy. In 2005,282,751 Mississippians, or 27.1% of the workingpopulation, were employed in low-wage jobs.52 Thelow-wage workers are incredibly important to thestates economic and social well-being. Low-wageprofessions include nursing assistants that care for theelderly; child care workers that keep children safe

while parents are working, and teaching assistants

that enhance childrens education.

While important, these jobs simply do not payenough to move employees towards self-sufficiency.Typically low-wage jobs lack health insurance, work-able vacation / sick time and resources for retirement.In the absence of these benefits, workers foregoprimary care and opportunities to build a safety netfor retirement or an emergency.

Low-wage work is also expensive to employers.

Specifically, when employees leave a job, employerslose productivity and profit. On average, employercosts for replacing a supermarket cashier hover near$3,600. Since low-wage workers typically do not stayin jobs as long as high-wage workers do, workforcesupports are critical to the bottom line of employersaround the state.53 The absence of workforce

supports like child care and health care

could be the difference between retaining and losing avaluable employee and ultimately profit.

Workforce supports, like health insurance and childcare, can fill the gaps left by low-wage work and canplay a crucial role in stabilizing the economics of

working families. For example, it costs a single parentwith two children in Coahoma County approximately

$2,055 a month to cover housing, health care, childcare, and food and transportation costs. Assumingthe parent earns $8.00 per hour, the family will beapproximately $650 dollars short each month withoutany type of assistance. However, with child care,childrens health insurance and food assistance, theshortfall drops to only $63 dollars a month (Table 8).

52 Working Poor Families Project, generated with data from the Basic Monthly Current Population Survey. Note: Low-wage is definedas a wage below $9.59 per hour adjusted for the state cost of living index.

53 Lane, Julia The Low-Wage Labor Market: Challenges and Opportunities for Economic Self Sufficiency. The Role of Job Turnover

in the Lo

investing in working families in mississippi

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