The American South spent much of the past century trying to overcome its position as the country’s poorest and least-developed region, with considerable success: By the 2009 recession it had nearly caught up economically with its northern and western neighbors.
That trend has now reversed. Since 2009, the South’s convergence has turned to divergence, as the region recorded the country’s slowest growth in output and wages, the lowest labor-force participation rate and the highest unemployment rate.
Behind the reversal: The policies that drove the region’s catch-up—relatively low taxes and low wages that attracted factories and blue-collar jobs—have proven inadequate in an expanding economy where the forces of globalization favor cities with concentrations of capital and educated workers.
i disagree with that conclusion. my southern state, NC, led the nation in percentage of jobs dedicated to manufacturing. after NAFTA, which you know predated the great recession, that percentage atrophied, as it did across the nation. second and third world nations realized that they had a comparative advantage to compete with the USA for market share: lower wages, little support for unionization, and negligible rules prohibiting the infliction of environmental damage
the south, with its focus on creating manufacturing jobs, was disproportionally impacted by the onset of globalization. as an aside this is one of three factors the SBA warned about at the new millenium; [the other two being a projected shrinkage of labor/increase of wages as the boomers went into retirement and computing becoming a larger presence for all businesses]
when the great recession hit, those on the margins looked to live more economically. housing and the cost of living was less in the south resulting in the south becoming the new locale for those unable to afford the cost of living in the north and west. with the atrophy of manufacturing jobs, accelerated by the recession, and those whose skill sets and/or asset base were limited flocked to the south, which then spiked the unemployment rate and the decline of the labor participation rate
As the divide between rural and urban incomes widens nationwide, the South has been particularly affected, since a third of its population lives in rural areas, compared with under 20% for the overall U.S.
this describes a symptom rather than the underlying problem. with few exceptions, those stuck in the rural south are there not by choice but by few alternative options. under-educated, under-skilled, financially exhausted residents of the rural southern areas have very few prospects for moving to the urban communities. that explains the disproportionate percentage of residents located in the rural south
The South’s economy was historically poorer because it was heavily dependent on agriculture, one legacy of the dominance of cotton and slavery. In 1880, about 90% of southern workers were employed in farming, compared with about 66% nationally, according to Sukkoo Kim of Washington University.
To diversify and lure manufacturing, southern states, starting with Arkansas in 1947, began passing right-to-work laws that weakened unions and kept taxes lower than in the wealthier North. And they spent less, especially on education: an average of $1,869 per student in 2009 dollars, in 1960, compared with $2,741 nationwide, according to the Education Department. In part, this reflected the long shadow of slavery. In the Jim Crow era white taxpayers and politicians resisted spending that benefited blacks, according to historians.
that implementation of comparative advantage that we are now seeing globally from second and third world nations, well that is what happened in the south after WWII. lower wages attracted industry which was located elsewhere because it led to higher corporate profitability when relocated to the south
UNION is a dirty word in the south, even today. imagine what it was like during the jim crow era and subsequent. that and being vilified as affiliated with communists, unionism never got a toehold in the old or new south
since the cost of living has been cheaper in the south, i have to question why it surprises anyone that the per capita public education expenditure was less in the south than the more affluent north and west
additionally, black schools were always inferior. the white schools books were passed to black schools when the white schools got new ones. so, between a lesser cost for 11% of the population and non-unionized school teachers, is there really any reason for the southern education system to operate at a lower cost than its more affluent counterparts in the north and west
