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News from EPI New report illustrates the South’s economic underperformance

States that have embraced the Southern economic development model are underperforming when compared with regions that did not implement this model, according to a new Economic Policy Institute report.  

The Southern economic development model is characterized by low wages, a regressive tax system, few regulations on businesses, few labor protections, a weak safety net, and vicious opposition to unions. This long history of anti-worker policies in the South—rooted in a racist agenda—has had devastating consequences for its residents. Specifically, the report finds:  

  • Southern states are overrepresented among the lowest-GDP states. Seven of the 10 states with the lowest per capita GDP are in the South, and Mississippi has the lowest of all states.  
  • Job growth in the South lags other regions. Over the past 40 years, job growth across the South has failed to keep up with the growth of the working-age population. 
  • Labor force participation in the South is the lowest of any region. The lower levels of unemployment across the South are misleading as the region’s low labor force participation indicates that many Southerners have become discouraged because they are unable to find a job or face serious employment obstacles.  

“Far from delivering on their promises of shared abundance and economic prosperity, ‘business-friendly’ policies have impoverished the South. The Southern economic development model is a key feature shaping the region’s economic underperformance,” said report author Chandra Childers, who is a senior policy and economic analyst for EPI’s Economic Analysis and Research Network. “Instead of funneling resources to wealthy Southerners and corporations, policymakers should strengthen the social safety net, adequately fund schools, provide affordable access to child care and transportation, and enforce labor laws and safety standards for workers.” 

The report is part of a series, “Rooted in racism and economic exploitation,” that takes a deep dive into the failed Southern economic development model. An upcoming report released soon will analyze job quality in the South.