Why Mississippi's 3.6% unemployment rate isn't the full picture of what businesses are facing

by Sara DiNatale, Mississippi Today
August 29, 2022

PASCAGOULA — When Ingalls Shipbuilding announced plans this summer to hire more than 2,000 workers, they put perks up front: day-one benefits, 12 paid holidays, competitive pay. 

And don't forget the on-site Chick-Fil-A. The company says it has invested nearly $1 billion in its local facility. 

“Attracting skilled workers is a top priority for Ingalls,” said spokesperson Kimberly Aguillard. “We are committed to finding and training the talent we need to build quality ships for our customers.” 

Mississippi businesses are learning they have to pull out all the stops if they want to attract and retain workers. Economic uncertainty is looming overhead, inflation has pushed up costs and businesses from restaurants to shipbuilders and business services are struggling to fill all their needed positions.

“Workforce is the single biggest issue we face in the state of Mississippi as a whole,” said Ashley Edwards, the president of the Gulf Coast Business Council. “That is certainly echoed in business leaders across the Coast. They are very concerned about, and very focused on, workforce questions and workforce challenges.”

Mississippi gained back the bulk of jobs it lost during the pandemic but those gains stalled out over the last few months. The state is still about 2,000 jobs short of where it was before the pandemic began, according to data from the Bureau of Labor Statistics. The Mississippi employment market has remained relatively flat over the last six months, without any major losses or gains. 

“Our economy has definitely slowed down along with the U.S.,” said state economist Corey Miller, referring to Mississippi. “But I don't think we're in a recession at present, but it's still 50/50 if we will be in one within the next 12 months.” 

That uncertainty has businesses on edge as they struggle to hire new workers. Miller said for every one person hired in a job, there's still 1.5 openings – a statistic he said is true in both Mississippi and nationwide. 

The state's unemployment rate – now about 3.6% – has fallen to historic lows, but that's not a full picture of what Mississippi businesses are facing. Economists say they still don't have a great understanding of why people haven't come back to the labor force entirely. 

“The labor force is still smaller than it was before the pandemic,” Miller said. “Some of those people who are no longer unemployed are not in the labor force and that's a phenomenon we have seen across the country.”

Mississippi's labor participation rate – the percentage of Mississippians working or looking for work – is about 55%, according to BLS data. That's about where it was before the pandemic began. But it's much lower than the national average of about 62%. 

“We want to dig into that more,” said Ryan Miller, the director of workforce development office Accelerate Mississippi. “Job rates are getting back to pre-COVID levels and yet we see labor participation rate, on the surface, could be better. We want to understand why and how we can move the needle.” 

Accelerate Mississippi plans to commission a study to better understand the gaps between unemployment and the labor participation rate.

Ryan Miller – no relation to the state economist – said another thing his office is tackling is the barriers that may be keeping people from entering the traditional workforce, such as child care. 

“What are the factors in the lives of Mississippains that are keeping them from engaging in the workforce?” he posed. “For specific population sectors, one of them being single mothers, they would probably love to participate in training (for a better job) but they can't get the childcare and don't have the latitude to participate.” 

Accelerate Mississippi is looking into how new programming could help, like creating non-traditional child care options for when workers are in training classes for in-demand skilled work. 

Experts largely agree the issue is more complex than the people simply don't want to work anymore.

“There are probably folks who would rather not work,” said Miller, whose focus is getting more Missisippians in good-paying jobs to raise the state's average wages. “But I think there are more Mississippians who if given the opportunity to the pathway to … have an opportunity to grow a skill, a chance for advancement, they'd take that.” 

Jobs in accommodations and food services are slowly building back to pre-pandemic numbers, but restaurants are not only dealing with the inability to find workers but increased costs from inflation. The Mississippi Hospitality and Restaurant Association says 55% of operators surveyed reported their businesses are understaffed and they do not not have enough employees to support demand. 

The same survey found 79% of Mississippi restaurants say they're less profitable now than they were in 2019. 

The shortages have pushed up some pay for workers. But when looking at wages Mississippi-wide, the state economist predicts most gains will be a wash due to inflation. 

Edwards, with the Gulf Coast Business Council, said business leaders are focusing their attention on recruitment efforts. Those needs will only be amplified as more baby boomers exit the workforce, Edwards said. 

The pandemic spurred what many call “the Great Resignation,” where time off from work made many realize they wanted to start new careers, find a better work-life balance, or retire.

“Businesses are still coming to terms with the shift,” Edwards said.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.