Mississippi Public Universities
IHL Press Release
IHL’S ECONOMIC REVIEW PRESENTS STATE ECONOMIC FORECAST, STUDIES RELATED TO HURRICANE KATRINA AND PROPOSED MINIMUM WAGE INCREASE
6/28/2006 - Jackson, Miss.

The June issue of the Mississippi Economic Review and Outlook, published by the Center for Policy Research and Planning of the Institutions of Higher Learning (IHL), is now available online. Topics covered in the Outlook include:

  • Mississippi Economic Forecast. The destruction caused by Hurricane Katrina last summer set back economic activity in the state, but tremendous monetary inflows since the disaster (expected to exceed $30 billion) have boosted sales, employment and tax revenues. “With 21 percent of housing units in the state suffering at least minor damage, reconstruction will take years,” states Senior Economist Dr. Marianne Hill of the Institutions of Higher Learning. “However, economic indicators show clearly that progress is being made,” adds Dr. Hill. Payroll employment for the state as a whole is higher this year than last. Total general fund collections for FY2006 through May were up 13 percent over the same period in FY2005; Coast gaming revenues were up to 54 percent of year-ago levels by February; and business and consumer confidence have risen. The state forecast is for continued acceleration of economic activity over the coming months.
  • National Economic Outlook. The growth rate of gross domestic product (GDP) is moderating. After a strong first quarter, the rate of increase in GDP in 2006 is forecast to be about 3.3 percent. Rising interest rates, growing debt levels and slow growth of wages and employment since 2001 are factors reducing output expansion. Investment and exports, however, remain solid. “Although the stronger world economy is having a positive effect on U.S. exports, we now face a new problem,” states Dr. Hill. “Since 1986, the value of foreign assets in the U.S. has exceeded the value of U.S. assets abroad, but this year, for the first time, net investment income to the U.S. from abroad will be less than U.S. outflows to foreign investors. This new reality will make it more difficult to improve our balance of payments.”
  • Impact of Hurricane Katrina in Mississippi.  An economic and demographic profile of the individuals and businesses whose property on the Coast was damaged by Hurricane Katrina is provided in the article by Brian Richard of the University of Southern Mississippi. “Groups more likely to live in the catastrophic damage zone include Asians, wealthy homeowners and persons living in rental housing.  In the business sector, retail, finance and services were damaged significantly,” says Richard. “One of the main focuses of recovery efforts should be on affordable housing. Policies focused both on both multi-family and individual homes will help the recovery proceed more smoothly,” adds Richard.
  • Katrina-Related Studies Available on the Internet.  LaRhonda Odom of Jackson State University reviews studies and reports of think-tanks, federal agencies, universities and nonprofit organizations around the country that analyze the effects of Hurricane Katrina or the policies and programs aimed at speeding the post-storm recovery. Studies by universities in Mississippi involved in the recovery efforts are discussed. Links to the studies are provided in the report.
  • Minimum Wage.  The purchasing power of the minimum wage is the lowest it has been since 1960. “Based on U.S Census data, 45 percent of workers in Mississippi earning less than the proposed minimum wage of $7.25 are the sole wage-earners in their households,” says Dr. Hill.  “More than half of these households include children,” she notes.  Dr. Hill provides estimates of the cost of raising the minimum wage and discusses the benefits to workers and taxpayers, as well as the cost to businesses and consumers.

Full text of the Mississippi Economic Review and Outlook is available at http://www.ihl.state.ms.us/urc/economic/review/outlook_jun06.pdf.