By: Stephen Lusk
As a lifelong resident of Mississippi and current college senior, I frequently witness a perplexing situation many of my classmates face: If I can find a job in my degree field here, will I be able to earn fair market value? If not, am I able to endure the emotional strain of leaving the state and two decades of memories behind? Confronted with this dilemma, a large number of my peers choose to leave.
This has resulted in Mississippi experiencing an economically crippling brain drain crisis severe enough to warrant special legislative action, as well as the establishment of a dedicated commission on the issue.
Mississippi’s universities award a modest 14,000 undergraduate degrees per year, but between 2010 and 2016, the state lost 3.9 percent of its entire millennial population, approximately 35,000 residents, roughly equivalent to losing the entire city of Tupelo. Assuming each resident would earn Mississippi’s per capita personal income (PCPI) of $36,692, this equates to a loss of $1 billion in economic power.
Concerns about a lack of opportunity in the state are not baseless. By the end of 2017, the state’s PCPI was 28 percent lower than the national average of $50,971.
While Mississippi’s economic situation may seem dim, the state can find reprieve in embracing startup businesses. On May 21, the Clarion Ledger published a story highlighting WISPr Systems, a $2 million startup business founded by Conor Ferguson, a recent Mississippi State University alum. WISPr utilizes drone technology to assist in providing affordable internet access to rural areas over a wireless network of towers, similar to a cell phone coverage network.
“The premise of this technology is that the drones would dramatically reduce the cost of identifying a) whether a wireless solution is even possible and b) if so, the optimum location to place towers to deliver service,” says Gerard Gibert, CEO of Venture Technologies, a Mississippi-based tech company that has experienced tremendous growth under Gibert. “That would encourage telecom service providers to provision wireless service to rural areas by stripping costs out of the provisioning process.”
Mississippi also has extremely favorable corporate tax rates and comparatively affordable office space for rent.
According to the Washington, D.C.-based nonprofit, Tax Foundation, Mississippi is one of only seven states with a top corporate tax rate at five percent or less. The Tax Foundation’s 2018 State Business Tax Climate Index, which ranks states based on favorable business tax policy, places Mississippi’s overall tax climate at 24th in the nation. Neighboring states ranked 42nd (Louisiana), 39th (Arkansas), and 35th (Alabama). Tennessee, the only neighboring state to receive a better ranking, places 14th.
A 10,000 square foot office building in the capital city of Jackson can be leased monthly for as low as $0.38 per square foot. Although a variety of factors may influence the price asked for each property, commercial property rates in Mississippi are low enough to be extremely attractive to newly-formed businesses. If a business can be operated from a residential office, the average hourly wage needed to rent a two-bedroom home is only $14.84.
In addition to favorable tax policy and low rental rates, Mississippi also has taken a proactive step in encouraging small business development when it passed first-of-its-kind occupational licensing reform in 2017, which brought all occupational licensing boards under the direct jurisdiction of the governor, secretary of state, and attorney general. Considering 66 out of 102 common lower-income occupations in Mississippi required a license to work in a given field as of November 2017, this legislation will provide much-needed relief.
This same deregulation mindset is shared at the federal level, as well. Commenting on President Trump’s recent deregulation initiatives, Mitch Tyner, deputy chief counsel of the U.S Small Business Administration’s Office of Advocacy commented “This is a great time for states like Mississippi to promote the advantages of locating startup businesses in their state. It is important to strike when the iron is hot, and small business startups are hot right now.”
Low tax rates, affordable office space, and sensible economic deregulation set the stage for an economy primed for a small business revolution. Hopefully, future graduates will not have to choose economic prosperity over staying in Mississippi––they’ll be able to do both.
Stephen Lusk is a senior business student at Mississippi State University and freelance writer interested in fiscal policy and economic growth. His Twitter handle is @LuskBrand.