Report finds Mississippi among worst in U.S. in terms of economic freedom
Mississippi might be a reliably Republican state, but a recent report says that Mississippi is more like a blue state when it comes to economic freedom.
The annual Economic Freedom of North America report was released on December 14 by the non-partisan Fraser Institute — a Canadian public policy think tank — and uses three measures of economic freedom: Government spending, taxation and restrictions on labor markets. The data is from 2015, the most recent year of available comparative data.
Mississippi was ranked as one of the worst states at 45th, tied with Hawaii. New York was ranked as the least free, followed by California. New Mexico and West Virginia tied for 47th.
According to the report, New Hampshire was the most free, scoring 8.3 out of 10. Florida and Texas tied for second while South Dakota and Tennessee round out the top five.
The study ranks each category from one to 10, with 10 being the most free. Mississippi scored a 5.9 or 43rd nationally on government spending.
"The freest economies operate with comparatively less government interference, relying more on personal choice and markets to decide what's produced, how it’s produced and how much is produced," Fred McMahon said in a news release. "As government imposes restrictions on these choices, there's less economic freedom."
McMahon is the Dr. Michael A.Walker Research Chair in Economic Freedom at the Fraser Institute and was of the co-authors of this year’s study, along with Southern Methodist University economics professor Dean Stansel and José Torra, the head of research at Caminos de la Libertad.
On taxes, the Magnolia State scored a 6.4 out of 10 and was ranked 36th. While the state scored well on its income tax revenue (a 6.8 rating), top tax rates (a 7.0 rating for a 25th ranking nationally) and property tax and other revenue (8.3 rating which was 20th best nationally), the state's sales tax ranking as a measure of personal income (4.8 percent) dragged down the tax score with a 3.5 rating.
Mississippi's large state government workforce, per capita, compared with other states dragged down the labor market freedom measure to a 6.6 out of 10 rating, good for a 45th ranking. The only positive measure in the labor market category was the state's low union density, which represents only 6.7 percent of the state's workforce. That gave the state a 9.6 rating for unionized workforce, second highest among the states.
The study found that average per capita income in the most free states was seven percent above the national average compared with five percent below the national average in the least-free states.
The study also measured economic freedom in Canadian provinces and Mexican states and is an offshoot of the Fraser Institute's Economic Freedom of the World index.