Economic forecast: It's getting better

By Dennis Seid/NEMS Daily Journal

TUPELO – With the recession behind us, the economy on every level – local, state and national – is poised to rebound, according to the speakers at Thursday’s annual Northeast Mississippi Economic Forecast Conference.
But even though the worst is over, they said the road to recovery isn’t without its bumps.
John Glascock of the University of Cincinnati, while enthusiastic about the nation’s GDP growth, warned “inflation is coming unless government is shrunk.”
He also said the country must be willing to “kill bad jobs to create good new jobs.”
Glascock said companies and industries that try to maintain employment levels have nearly died. Today’s workers are more productive, mainly due to technology, and leaders need to come to the stark realization that “leadership means you do more tomorrow with less people and you share it with people and the workers. When you do that, you win,” he said.
Still, his message was more positive than negative, and he noted that “the economy is very, very strong.
“The U.S. economy is the world’s largest economy and it’s growing.”
The South, too, is growing, thanks to a migration of manufacturing, said Mike Randle, the editor and publisher of Southern Business and Development.
During the last recession, the South continued to expand its manufacturing base because of its growing population and its business-friendly climate, he said.
“When you’re making money hand over fist in manufacturing, it doesn’t matter where you put a plant,” he said. “When margins are tight, like they are now, people start to relocate. At this point, you can either go to the South or Mexico, but the problems in Mexico have a huge impact on their recruiting ability.”
Manufacturers will continue to flock to the South to build products and make money, Randle said.
“We predict a manufacturing beachhead in the South for the next 15 to 20 years,” he said. “Manufacturers are fleeing organized labor like no other time I’ve seen in the last 20 years.”
Randle also said manufacturing unfairly gets the blame for being a “job killer.”
“It’s not true,” he said. “It’s services. One of our top five sectors is financial services, and it was the cause of the collapse into recession.”
A steep decline in construction, he added, also contributed to the higher unemployment rates.
Community Development Foundation Chairman Billy Crews said the region’s economy is at a crossroads, “with smooth patches and bumpy spots along the way.”
He cited among the region’s strengths the CDF and other economic development groups that serve as engines and assets.
The weaknesses in the region include a unemployment rate that averaged 12 percent last year and low educational attainment.
“We need to attack the root cause of unemployment, he said. “These are sobering numbers that challenge our economy.”
As for the relatively low number of college graduates and high dropout rate, Crews said “our system and our society are not well-served by these achievement gaps.”
He also exhorted individual and collective leadership in the region to work together.
“We must be on the same team, pulling in the same direction,” he said. “We have good examples of cooperation, but we have far too many divisions between city and county leaders, teachers and parents and neighbors.”
Stirring a bit of controversy, though, was Glascock’s contention that the gap between rich and poor isn’t as wide as perceived.
“We’re all richer than we were before,” he said, pointing to figures that showed since 1969, the percentage of people earning less than $35,000 has shrunk while those making $100,000 or more has grown dramatically.
Phil Hardwick, coordinator of capacity development for the Stennis Institute of Government at Mississippi State University, noted that those same statistics showed a decline of nearly 10 percentage points in the middle-income category of people earning $35,000 to $100,000.
“The key word is ‘perspective,’” said Hardwick, an attendee at the conference. “There’s more money in that upper income than in the middle part. He has a perspective that I don’t necessarily disagree with but I think there are other economics professors with other perspectives that would make the average person walk away confused. The problem is we’re trying to make long-term conclusions based on daily events.
“We’re in a situation right now that the average American doesn’t know who to believe.”
Contact Dennis Seid at (662) 678-1578 or dennis.seid@journalinc.com.