The shame of it! Mississippi has found itself in the humiliating position of being compared disobligingly with the United Kingdom. Just last week, the Financial Times ran a column asking, “Is Britain Really as Poor as Mississippi?”
Most Mississippians do not spend much time worrying about comparisons with Britain. The same cannot be said about those on the other side of the Atlantic. For Brits—and I am one, though now based in Jackson, Mississippi — the issue of whether they are more or less prosperous than Mississippi has become a thing. Indeed, the Financial Times now calls it “the Mississippi Question.”
It was nine years ago when Fraser Nelson, the editor of The Spectator, first suggested that the U.K. was poorer than any U.S. state but Mississippi. This came as an uncomfortable shock for many in Britain for whom Mississippi, as a byword for backwardness, conjures up clichés about the Deep South. Every time anyone has made the comparison since, there has been an indignant outburst from Britons keen to denounce the data.
In practice, when trying to provide a definitive answer to the Mississippi Question, no uniform, up-to-date set of data exists. But if you take the most recent U.S. figure for Mississippi’s GDP and divide it by the state’s population, you get a pretty accurate figure for GDP per capita in current dollar values. Make the same calculation for the U.K., with total GDP data divided by the population, and you find two comparable numbers.
Last year, by my math, the U.K.’s output per person was the equivalent of $45,485; Mississippi’s was higher, at $47,190. If Britain were invited to join the U.S. as the 51st state, its citizens would be at the bottom of the table for per capita GDP. Some might say that, for Mississippi, that is still disconcertingly close.
“That’s not fair!” the critics would counter. “When you compare the wealth of nations, you need to look at how far the money goes. Things cost more in the U.K. than in Mississippi.” To adjust the raw numbers, the argument runs, you need to use an economist’s tool called “purchasing power parity.” Sure enough, when you consider differences in the price of things in Britain and in America, the U.K. does appear richer than Mississippi. Thus, after such PPP adjustments, a Financial Times analyst suggested that for 2021, Mississippi’s per capita GDP was a mere $46,841 to the U.K.’s $54,590 (though conceding that, without the global city-state effect of London’s economy, much of Britain was relatively poorer than the Magnolia State).
“Hold on!” we on Team Mississippi retort. “Why adjust the numbers for our state using U.S. national data?” Here, a dollar goes a lot further than it would in New England or on the West Coast. To produce PPP-adjusted numbers for Mississippi that reflect the buying power of a dollar in places like New York or San Francisco, we say, is absurd. And sure enough, tinkering with the numbers to reflect purchasing power in Mississippi itself puts doubt on the U.K. coming out ahead.
Perhaps more interesting, however, than the way you cut the numbers for any given year is the fact that the gap between Mississippi and Britain seems to be growing. Never mind PPP—just run the numbers for GDP per capita in current dollars for the first part of 2023, rather than 2022, and you can see that Mississippi’s output is rising at a faster rate than Britain’s.
Over the past 30 years, several southern U.S. states have seen rapid economic growth. Texas and Nashville, for example, have become economic hubs to rival California or Chicago. North Carolina, Georgia, Tennessee, and even Alabama have all flourished. Mississippi was not. Until now.
Historically, business in Mississippi was highly regulated. Licenses used to be mandatory in order to practice many of even the most routine professions. The state has now lifted a lot of these restrictions, deregulating the labor market. According to a recent report by the American Legislative Exchange Council, a group representing conservative state legislators, the size of Mississippi’s public payroll has been pared back. In 2013, there were 645 public employees out of every 10,000 people in the population; today, the number is down to 607. Last year, Mississippi also passed the largest tax cut in recent history, reducing the income-tax rate to a flat 4 percent.
How did this come about? Policymakers here have drawn inspiration from the State Policy Network, a constellation of state-level think tanks, borrowing ideas that have worked well elsewhere. We got the idea for labor-market deregulation from Arizona and Missouri. Tennessee inspired us to move toward income-tax elimination. Florida’s successful liberalization stands as an example of how we could reduce more red tape.
What was once just a trickle of inward investment has turned into a steady flow. Growth is up, visibly: The areas of prosperity along the coast and around the state’s thriving university towns are getting larger, even if pockets of deprivation in the Delta remain.
Perhaps many in Britain find it hard to accept that Mississippi has overtaken them economically, because they still think of Mississippi as cotton fields and impoverished backwoods, peopled by folk who subsist on God, guns, and grits. But what if Britons’ reluctance to face changing economic realities comes from an outdated perception of themselves?
Douglas Carswell, President & CEO, Mississippi Center for Public Policy.
