Recent furniture manufacturer start-ups and expansions have been encouraging, but the industry remains under stress. It’s too valuable to the economy of this state and region not to provide prudent help where possible.
Import tariff reductions and the establishment of foreign trade zones for several furniture manufacturers in the area have given the industry a boost. On another front, legislation that would grant a $2,000 tax credit for each new cut-and-sew job in the Mississippi furniture industry has passed both houses of the Legislature and awaits Gov. Haley Barbour’s signature.
Barbour last year vetoed a bill that gave the tax credit to all cut-and-sew jobs, existing or new. He said it was unfair to other industries to single out furniture for such help and also expressed concern about the impact on state revenue during tough budgetary times.
The Mississippi Furniture Association and its legislative allies came with a different bill this session. It grants the tax credit only for new cut-and-sew jobs. It won’t cost the state anything unless jobs are created, and the creation of those jobs and the income and tax revenue from them will more than offset the revenue loss.
Furniture manufacturers have reduced cut-and-sew jobs in recent years as pre-assembled kits – primarily from China – have grown in usage. One Northeast Mississippi furniture company eliminated 135 of its 250 cut-and-sew jobs in the months since Barbour’s veto.
While the cut-and-sew kits are cheaper, most manufacturers would prefer to keep a sizable number of cut-and-sew employees – and not just out of altruism. Having experienced cut-and-sew operators on site allows for quicker response to customer requests and greater quality control. The state tax credit will make it easier for manufacturers to make the decision to restore some of those jobs that were cut.
Those jobs mean quite a lot to the people who hold them, mostly women who get from cut-and-sew jobs better pay and benefits than they would likely receive in other jobs they might be able to find at their skill levels.
Northeast Mississippi’s economic developers and business and political leadership have been working hard to attract high-skilled jobs of the future, including manufacturing jobs. But furniture is still vitally important to the region in this period of economic transition, and the governor could help by signing the legislation on his desk.