Imagine a Mississippi without Nissan. Or Ingalls. Or others. The economy would be worse.

By: Scott Waller and Jay C. Moon, Guest Columnists │ The Clarion Ledger, Nov. 11, 2018

Let us, for a moment, imagine a Mississippi without Nissan.

Or without Airbus, Ingalls Shipbuilding, Steel Dynamics, Chevron, Yokohama, PACCAR and Toyota.

How different would our state be today? Some would like you to think it wouldn’t be much different, or it might possibly be even better.

The reality is the vast economic growth we have seen would not have happened without recruiting these companies to Mississippi. 

If the state had not competed for the Nissan project, would the company still have built its facility in Madison County and opened it in 2003? 

Not a chance.

Economists, when trying to determine the value of something, like to use the concept of “Ceteris Paribus,” which means “all other things being equal” or “other things held constant.” The reason for employing this method is it’s often very difficult to identify all the variables that ultimately influence change. Thus, they try and simplify the process viewing it as if everything were equal.

When it comes to economic development — which spurs economic growth — the use of the concept of “Ceteris Paribus” is greatly flawed because all things are not equal.

Mississippi’s population isn’t equal to other states.

Infrastructure from state-to-state is not equal.

Nor is the tax structure, business climate, cost of living or workforce.

Even the incentives offered by states to win projects aren’t equal.

In some categories, Mississippi might have a competitive advantage, and in others it may be at a disadvantage. 

Economic development is vital in helping move our state forward, and we must have all the tools necessary to level the playing field with those we are competing against — even if it means providing financial incentives.

The incentives are invested in our citizens to provide the workforce training needed to succeed. The development of these programs at our community colleges, which didn’t previously exist, are now being used to improve the state’s overall workforce.   

The incentives are invested in infrastructure, used not only by the primary company but by other companies and businesses that understand the value in locating or growing in Mississippi.

Nissan was the catalyst for an economic shift unlike any we have seen in our lifetimes. It moved Mississippi from a state of low-wage, low-tech manufacturing into a position where vast opportunities are being created throughout the state. 

These new companies now offer our citizens high-paying careers. In the automotive industry alone, the average salary is $50,510 annually, according to the U.S. Bureau of Labor Statistics — almost $13,000 more than the state average of all industries of $37,642.

To provide a little historic perspective, the state average wage in 2000, when Nissan was under construction, stood at $25,208.

Some people simply want to view the return on investment by comparing the incentive amount to the number of jobs and the average salary. Here are just a few of the flaws in that approach:

  • It compares the state’s total investment to a single year’s wage, as opposed to the multiplying effect of those wages annually. 
  • It fails to include a company’s capital investment, which is 2 to 3 times that of the state’s. Many of these companies have made additional investments and created additional jobs with expansions.
  • It doesn’t include in the equation the hundreds of millions of dollars of state and local taxes being collected annually that didn’t exist before.
  • It doesn’t account for the economic benefit of other businesses locating in the state that create jobs and supply goods and services. 

By totally ignoring all other variables that could influence or change the outcome, you do not get an accurate picture of the true economic growth taking place through economic development. 

However, one of the biggest faults with this approach is the failure to take into account long-term outcomes. Ingalls Shipbuilding in Pascagoula started as a result of the state’s Balance Agriculture with Industry initiative. In its 80-year history Ingalls has hired 180,000 employees who have delivered nearly 350 ships to the U.S. Navy — an amazing return on investment.

State leaders also deserve credit for working to create a fair tax system, removing regulatory barriers, providing a stable legal climate and focusing on education and workforce development improvements.  

This has helped stabilize our business climate, level the playing field, open new doors for boosting our state’s entrepreneurial spirit and growing investment from existing companies. 

So yes, we really do have a lot to cheer about.

More importantly, thank goodness we don’t have to think about a Mississippi without Nissan.


Scott Waller is president and CEO of the Mississippi Economic Council. 

Jay C. Moon is president and CEO of the Mississippi Manufacturers Association.