Updated October 18, 2023

A new Economic Policy Institute report examines key economic trends in the South to refute proponents’ arguments that the Southern economic development model creates jobs and overall prosperity. In fact, the South lags other regions of the country on most indicators of economic health. 

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. 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: 

• Job growth across the South has failed to keep up with population growth. The share of prime-age workers (ages 25–54) who have a job is lower than the national average in most Southern states. 
• Workers in Southern states tend to have lower earnings. 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 are above the national average in most Southern states. Louisiana and Mississippi have the highest poverty rates in the nation, with nearly 1 in 5 residents living in poverty. 
• Child poverty is highest in the South compared with any other region. At 20.9%, child poverty rates in the South are 3.7 percentage points higher than the region with the next-highest child poverty rate—the Midwest (17.2%).  
• Southern states are among the lowest-GDP states. Nine of the 15 states with the lowest per-worker GDP are in the South. 

“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. While this economic model has garnered vast amounts of riches for the wealthiest people across the region, it is leaving most Southerners with low wages, underfunded public services, a weak safety net in times of economic downturns, deep racial divisions, and high rates of poverty,” said report author Chandra Childers, who is a senior policy and economic analyst for EPI’s Economic Analysis and Research Network.  

The reality is this economic development model is fundamentally flawed as a strategy for improving living conditions for most Southerners. But 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 still overwhelming made up of Black and brown workers across the region. 

“The failed Southern economic development model is still being used to maintain the color line across the South and to exploit and oppress Black, Hispanic, Indigenous, poor, and women residents. While these exploited groups face the greatest hurdles to social and economic security, all Southerners are harmed by this failed model,” said Childers. “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.”