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New Report: The Failed Southern Economic Development Model

Above photo: Southerns states perform poorly on a wide range of economic indicators. Mario Tama/Getty Images.

Rooted in racism and economic exploitation.

Southern politicians claim that “business-friendly” policies lead to an abundance of jobs and economic prosperity for all Southerners. The data actually show a grim economic reality.

Key findings

  • The share of prime-age workers (ages 25–54) who have a job is lower than the national average in most Southern states.
  • Median earnings in nine Southern states are among the lowest in the nation, even after adjusting for lower cost of living in the South.
  • Poverty rates in most Southern states are above the national average. In Louisiana and Mississippi, nearly 1 in 5 residents live in poverty.
  • The child poverty rate in the South is 20.9%—higher than in any other region.
  • These statistics reflect an anti-worker economic model whose signature policies are low wages, low taxes, few regulations on businesses, few labor protections, a weak safety net, and vicious opposition to unions.

Why this matters

A long history of anti-worker policies in the South—rooted in a racist agenda—has had devastating consequences for its residents. Business interests and the wealthy have stoked racial divisions to maintain power and ensure access to cheap labor—at the expense of working people.

How to fix it

We must begin to reverse 150 years of anti-worker policymaking in the South—starting with raising minimum wages and protecting workers’ right to organize. We also need to enforce appropriate regulations on business practices, reform a broken tax structure, and strengthen the safety net for Southerners.

Report: Many states across the Southern United States employ an economic model that prioritizes business interests and the wealthy over ordinary citizens. This model—which we refer to in this report as the “Southern economic development model”—is characterized by low wages, low taxes, few regulations on businesses, few labor protections, a weak safety net, and vicious opposition to unions. The model is marketed as the way to attract businesses into Southern states, with the implicit promise that this will lead to an abundance of jobs and shared economic prosperity for all Southerners.

The reality is this economic development model is fundamentally flawed as a strategy for improving living conditions for most Southerners. In fact, the Southern economic development strategy was never designed to help the vast majority of working Southerners; rather, it reflects efforts to ensure continued access to the cheap labor of Black people following emancipation. Today the cheap labor sought is increasingly diverse, yet it is still overwhelmingly made up of Black and brown workers across the region.

In this report, we use empirical data to show that the Southern economic development model has failed to provide economic security for workers and families across the South. In fact, the South lags other regions of the country on most indicators of economic health.2 We also show—through historical context and case examples—how the Southern economic development model continues to serve as a means of maintaining racial hierarchies across the South.

 Read the full Report.

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