The Legislature put the tax credit for furniture manufacturers in place in 2010 in an attempt to help jump start the state’s furniture industry, located primarily in Northeast Mississippi, and extended it five years in the recently completed legislative session.
The tax credit, as well as better workforce training opportunities, are among the factors that appear to be involved in a modest comeback by the furniture industry. The industry is attempting to recapture jobs lost to China in recent years.
“China is still our competition,” said Ken Pruett, president of the Mississippi Furniture Association. “But we are making inroads.”
The original tax credit was enacted in the 2010 legislative session, taking effect Jan. 1, 2010, and running until Dec. 31, 2012. This year the Legislature extended it through 2017.
The first effort to pass the tax credit for each cut-and-sew job was vetoed in 2009 by then-Gov. Haley Barbour. In 2010, Barbour signed legislation that would provide the $2,000 tax credit for each new cut-and-sew hire by furniture manufacturers.
Pruett said the tax credit is working. In the first two years, he said at least 1,200 cut-and-sew jobs were added. Total employment in the furniture industry has risen by about 2,000. The industry now employs about 20,000 people in the state, he said.
Pruett also said jobs are being added at a faster pace this year. He said the goal when the tax credit was put in place was to add 3,000 jobs in three years. The goal now with the five-year extension is to add 10,000 jobs.
“We want to do everything we can to help the furniture industry, especially in my area where it is still the No. 1 employer,” said Sen. Nickey Browning, D-Pontotoc, who authored the extension signed into law by Gov. Phil Bryant.
The tax credit is important because the cut-and-sew jobs have been lost in recent years to manufacturers in China. A study done by the Mississippi State University Stennis Institute of Government before the tax credit was first proposed in 2009 said those jobs are beneficial to Northeast Mississippi because they provide a higher wage and more benefits than most people who fill them can find elsewhere.
“We have a lot of people in our area who had good jobs when the cut-and-sew jobs were available ...,” said Rep. Preston Sullivan, D-Okolona, also an advocate of the tax credit. “We have a lot of people in their 40s and 50s who still want a job and do not have to be trained. They already know how to do it. And nowadays, it helps to provide businesses with an incentive.”
While cut-and-sew employees traditionally have been women, Pruett said with the demand growing he hopes men consider the possibility of training to accept those jobs. He said in other countries many of the cut-and-sew employees are men.
He said the jobs would be good for military personnel returning from combat tours.