Enjoy this conversation with Economic Policy Institute President, Heidi Shierholz; Director of the Program on Race, Ethnicity and the Economy, Valerie Wilson; and Chief Economist, Josh Bivens; moderated by Samantha Sanders, about what’s missing from the current debate!

Originally held Thursday, January 22, 2026.

Webinar links, notes and discussion

Timestamped themes, discussion, and resources mentioned in the webinar

Other affordability resources

The missing piece in the affordability debate: Higher paychecks

The free market won’t solve our nationwide housing affordability problem: Equity-focused policy is the solution

The federal minimum wage is officially a poverty wage in 2025

Holding the Line: Minimum wage state solutions to the U.S workers rights crisis

Raising taxes on the ultrarich: A necessary first step to restore faith in American democracy and the public sector

The impact of the Raise the Wage Act of 2025 factsheet

Listen on The State of Working America Podcast

If you are an academic, student, non-profit researcher or advocate, or a journalist, you may view and use the content of this webinar and its related materials without requesting any further permission.

This is permitted under a non-commercial use Creative Commons license CC BY-NC-SA 4.0.

If you are a commercial enterprise looking to this information or data in any product that will be sold or as part of services and data you provide to paying customers, request commercial use by contacting EPI.

Find out about upcoming webinars first! Subscribe to EPI newsletters.

Who are low-income families of color?

Families in which the household head identifies as

• Black
• Hispanic
• American Indian or Alaska Native (AIAN)
• Asian American or Pacific Islander (AAPI)

With at least one child under the age of 18 living at home

With a total family income below 200% of the federal poverty line (below $64,300 in 2025 for a family of two adults and two children)

Introduction

Low-income families of color live in a permanent cycle of economic insecurity and uncertainty. These families make up a disproportionate share of the nearly 10 million families with children (9.7 million) who are either poor or vulnerable to poverty. As a result of their economic precarity, these families are among the first to experience the painful consequences of a recession. This was evident during the last two business cycle downturns: the Great Recession and the pandemic recession. We find that these two economic contractions dealt a mighty blow to the employment security of these families, triggering a rise in poverty and housing insecurity.

Given the weak policy response to the Great Recession, it took economically vulnerable families of color nearly a decade to recover in nearly all the economic domains we examine, including employment, poverty status, and housing insecurity. While the bold response to the pandemic recession led to a relatively faster rebound in employment, economically vulnerable families of color remain disproportionately burdened by poverty and housing insecurity.

Instead of easing the pain of economically vulnerable families, the Trump-Vance administration and congressional Republicans have been on the attack in the first half of 2025. They have gone after the agencies, laws, and programs that help protect these families from joblessness, discrimination, poverty, hunger, and premature death. In just its first 100 days, the administration deliberately cut the wages of workers, rolled back protections against bias in employment, and hacked away at staffing at agencies that support the well-being of low-income families (like the Department of Education and the Department of Health and Human Services). As if this weren’t enough, the administration and congressional Republicans prioritized dealing a historic blow to Medicaid and Supplemental Nutrition Assistance Program (SNAP). They cut spending on programs that provide desperately needed health care and nutritional support to families by more than $1 trillion (CBO 2025b).

The chaos and uncertainty ushered in by the economic mismanagement of the Trump-Vance administration even led to the first quarterly contraction in economic growth since 2022. With the prospects of another recession rising, the administration has done everything in its power to leave low-income families even more vulnerable to the pain ahead. As we illustrate in this report, economic downturns hit these families the hardest, and while we’ve learned a great deal since 2007 about how to protect them, the administration has chosen not to build upon those lessons. Instead of protecting the strong labor market they inherited, empowering workers to bargain for better pay and working conditions, and strengthening basic needs programs, the Trump-Vance administration is fighting for an economic agenda centered on austerity for the economically vulnerable and subsidies for the rich.

In just a short period of time, the Trump-Vance administration has left low-income families more economically insecure and vulnerable to pain as recession risks continue to rise

Since taking office, the Trump-Vance administration has worked to dismantle the basic protections that help shelter low-income families from even deeper economic insecurity and hardship. This attack on families has taken the form of executive actions undermining civil and workers’ rights. While some of President Trump’s executive orders have been challenged in court, their introduction has altered the policy discourse and the lived experience of low-income families of color throughout the U.S. with an explicitly racist and xenophobic agenda. Beyond executive actions, the Trump-Vance administration and congressional Republicans also passed one of the most sweeping cuts to the U.S. social safety net in recent history, gutting basic needs programs and making Medicaid and SNAP benefits much more difficult for families in need to access (Shierholz 2025). All of this was done to help offset the cost of tax cuts that disproportionately benefit rich households and corporations (The Budget Lab 2025).

Few policy issues have received as much priority in the Trump-Vance administration as their attack on economic justice and initiatives promoting diversity, equity, and inclusion (DEI). In just his first day in office, President Trump rolled back numerous executive actions expressing the federal government’s commitment to racial justice for Black, Hispanic, Native American, and Asian American, Native Hawaiian, and Pacific Islanders (EPI 2025d). President Trump later also rescinded executive actions that identified systemic barriers impeding Black Americans’ opportunity to fully participate in American society on a level playing field (EPI 2025e). Equity in the classroom is also under attack. This was evident when President Trump rescinded an executive order stating that all students should be guaranteed an educational environment free from discrimination, including discrimination in the form of sexual harassment, sexual violence, and on the basis of sexual orientation or gender identity (EPI 2025c). These efforts form part of more than a dozen executive actions signed by President Trump in his first 100 days to roll back years of progress on racial and economic justice (McNicholas et al. 2025).

The Trump-Vance administration is also working to roll back anti-discrimination protections by weakening the Equal Employment Opportunity Commission (EEOC) (Maye and Wilson 2025). Just days into his second term, President Trump dismissed two EEOC commissioners and the agency’s general counsel, years before the expiration of their appointment (Olson and Savage 2025; EPI 2025b). As a result of these dismissals, the commission lost the quorum needed to perform key functions. Trump has also redirected the EEOC’s priorities to focus more on investigating so-called DEI-motivated race and sex discrimination and anti-American national origin bias and discrimination (EEOC 2025; DOJ 2025). Because wages are the primary source of income for low-income families, weaker enforcement of anti-discrimination laws leaves families of color more vulnerable to employment and pay discrimination in the labor market.

The EEOC is not the only federal body that the Trump-Vance administration has weakened to the detriment of low-income families. In March 2025, President Trump signed an executive order that would effectively eliminate the U.S. Department of Education (ED). The U.S. Supreme Court later lifted a lower court decision that had blocked the administration from firing more than 1,300 employees at ED (Sherman 2025). While the merits of the case before the Supreme Court have yet to be decided, the gutting of ED will disproportionately harm children from low-income families of color that benefit from federal funding for under-resourced schools and programs aimed at closing learning and achievement gaps (Dianis 2025; EPI 2025a; Santhanam 2025).

More broadly, ED serves an essential role in helping enforce Title VI of the Civil Rights Act, which prohibits discrimination based on race, color, or national origin in programs or activities that receive federal financial assistance (ED n.d.). Even the U.S. public health infrastructure is now under attack, as the Trump administration is committed to carrying out layoffs at federal health agencies focused on reducing premature and preventable deaths associated with pervasive racial health disparities (Moore 2025).

President Trump’s attacks on federal agencies that are vital to the provision of public goods and services for families are part of a larger war his administration has waged on workers. In his first 100 days, Trump replaced the leadership of the National Labor Relations Board (NLRB)—the federal agency tasked with protecting the most fundamental U.S. labor rights—with members more likely to carry out his agenda to erode workers’ union and collective bargaining rights (McNicholas et al. 2025). This will hurt the ability of workers to form and join unions at work. Unions are vital to working families, as union workers enjoy better wages and working conditions than their nonunion peers (Banerjee et al. 2021).

Beyond executive actions, the main legislative priority of the Trump-Vance administration imposed more than $1 trillion in cuts to basic needs programs in exchange for continuing a tax regime that overwhelmingly favors rich households and corporations (CBO 2025b; Shierholz 2025). Extending the 2017 tax cuts that President Trump enacted in his first term will not just favor the rich disproportionately. On its own, this extension can even suppress economic growth over the long run and leave policymakers with significantly less room to respond to another recession (Bivens 2025b). To help offset the cost of these large tax cuts to the rich, the Republican-led budget reconciliation bill that Trump signed into law adds more stringent work requirements to Medicaid and SNAP on top of historic cuts.

This combination will leave more than 22 million families at risk of losing some or all of their SNAP benefits and strip away health coverage for more than 11 million people (CBO 2025a; Wheaton et al. 2025). These cruel and misguided efforts will disproportionately hurt low-income families of color and children who are more likely than their peers to rely on Medicaid and Children’s Health Insurance Program (CHIP) for health insurance, and SNAP and other nutritional assistance programs to avoid going hungry in the face of growing food insecurity (Cid-Martinez, Moore, and Maye 2025; Cid-Martinez 2025).

In its totality, the policy positions President Trump has advanced in his first 100 days via executive orders and legislative priorities will leave low-income families of color and children much more vulnerable to hardship. In the face of a recession, which is no longer a hypothetical scenario, the consequences would be devastating. The Bureau of Economic Analysis (BEA) reported the first quarterly contraction of economic growth since 2022, and while growth climbed again in the second quarter, the U.S. economy is now growing significantly slower in the first half of 2025 than in the previous year (BEA 2025). And the chaotic economic climate that the current administration has generated with its trade, immigration, and macroeconomic policy management has increased the prospects of a recession (Bivens 2025a).

The fear of an approaching recession increased with the downward revision of employment gains that defined the weak jobs report published in August 2025 (EPI Staff 2025). What we see in the first half of 2025 is an economy being held back by anemic growth and a deteriorating labor market.

The upheaval that this administration has produced leaves low-income families of color exposed to future hardship. Without a bold policy response to recessions and the support of a strong welfare state, these families are hit hardest by economic downturns and sluggish economic recoveries (Bivens et al. 2025). This report sheds light on this reality by examining how the last two recessions impacted the well-being of low-income families, as captured by their employment situation, poverty status, and housing insecurity.

Low-income families of color with children and the last two recessions

What do we mean by low-income families of color with children?

The sample of families included in this analysis are those in which the household head has at least one child of their own, under age 18, living at home. Within these households, there may also be other members who have children under 18. Families of color are broadly defined as those whose household head identifies as Black, Hispanic, American Indian or Alaska Native (AIAN), or Asian American or Pacific Islander (AAPI).[1]

We further restrict this sample to a subset of economically vulnerable, or low-income, families, defined as having total family income below 200% of the federal poverty threshold.[2] To place the poverty threshold in context, the federal poverty line (FPL) for a single individual in the 48 contiguous states (excluding Alaska and Hawaii), and Washington, D.C., is $15,560 in 2025. While the FPL increases by $5,500 for each additional family member, a year-round worker earning the federal minimum wage ($7.25 an hour) can’t afford to keep their family out of poverty in 2025 (Hickey and Cid-Martinez 2025). For the remainder of this report, we will use families (of color) to refer to families (of color) with children, and the terms “economically vulnerable” and “low income” will be used interchangeably.

Drawing a demographic portrait of economically vulnerable families

While our main economic analysis is focused exclusively on Black and Hispanic families due to data limitations associated with the sample size of other groups, this section provides a demographic picture of low-income families of color more broadly. Table 1 shows low-income families by race and ethnicity, using data from the 2023 American Community Survey (ACS). As depicted in Table 1, families of color are generally overrepresented among the 9.7 million families with children that are economically vulnerable. While Black, Hispanic, AIAN, and AAPI families collectively account for 44.4% of all families with children, they represent 61.1% of economically vulnerable families with children. Although white families make up a larger share of low-income families than any other single racial or ethnic group, they are underrepresented among low-income families (38.9%) relative to their share of all families (55.6%).

More than 3 in 10 (32.6%) low-income families are Hispanic and more than 1 in 5 (21.5%) are Black. Together, Black and Hispanic families represent more than half (54.1%) of all low-income families with children, but just over one-third (35.1%) of all families with children. While less than 1.5% of all families are AIAN, they too are slightly overrepresented (1.8%) among the economically vulnerable. AAPI families account for 7.9% of all families and 5.2% of economically vulnerable families; however, the aggregate socioeconomic status of AAPI families hides important differences that become evident when we separate groups by country of origin (Cid-Martinez and Marvin 2023).

Immigrant families also make up a disproportionate share of low-income families and are especially prevalent among low-income Hispanic and AAPI families. Foreign-born families made up 23.6% of all families in 2023, but a higher share (30.5%) of low-income families were immigrant families. Slightly more than 8 in 10 (81.1%) economically vulnerable AAPI families are foreign-born, as are more than 6 in 10 (61.9%) comparable Hispanic families.

Beyond economic insecurity, these families face ongoing threats under Trump’s draconian mass deportation agenda, which the administration and congressional Republicans bolstered with new financing in the budget reconciliation bill that Trump signed into law (Costa 2025; NIJC 2025). These attacks on immigrant families and the immigrant workforce will also have ripple effects on the labor market, costing the U.S. economy nearly 6 million jobs, particularly in construction and child care (Zipperer 2025). All of this will also put upward pressure on food and housing prices (McNicholas et al. 2025).

In terms of family structure, low-income families are generally more likely to be headed by women or a non-married household head.[3] However, one finds noticeable variations in these patterns across racial and ethnic groups. For example, Black and AIAN families are most likely to be headed by women, 78.7% and 69.5% respectively, compared with less than half (43.3%) of low-income AAPI families. There are also differences in marital status. Low-income AAPI families are significantly more likely to be led by a married couple (76.2%), compared with about half of white (50.5%) and Hispanic (51.6%) families. More than one-third of low-income AIAN families and one-quarter of low-income Black families are led by married couples. Apart from Black families, less than 1% of low-income families report having a partner or spouse of the same sex in 2023. Because most low-income Black families are headed by women, attacks on women’s reproductive rights, along with efforts to undermine nondiscrimination enforcement for racial and ethnic minorities, women, and LGBTQ+ individuals, impose additional disadvantages for these families.

Economically vulnerable families are also more likely to have more than one child (under age 18): 67% of low-income families have two or more children, compared with 58.7% of all families. However, among low-income families, there is little variation in the number of children across racial and ethnic groups. For example, about two-thirds of all low-income families has two or more children, and only 12.6% have four or more children.

The share of low-income families with either a disabled child or parent of a child shows considerable variation across race and ethnicity. AIAN families stand out as having the highest prevalence of disability. About 1 in 3 (33.7%) AIAN households has a parent or child with a disability. Similarly, more than one-quarter of white families, and more than 1 in 5 Black and Hispanic households have a parent or child with a disability. AAPI households had the smallest share (16.2%) of households with a disabled parent or child.

The share of low-income families that is a part of intergenerational households varies significantly by race and ethnicity group. More than 1 in 8 (13.1%) AAPI households are multigenerational or intergenerational, followed by 7.8% of Hispanic households and 5.9% of AIAN households. Economically vulnerable white families are the least likely to be intergenerational, as less than 4% have a grandparent in the household.

Table 1

The Great Recession and the pandemic recession: Differences and similarities

As this report contrasts the economic experience of families during two different recessions, it is important to first understand the severity and duration of these events.

By official accounts, the Great Recession began in December 2007 and ended in June 2009, representing the longest economic downturn to impact the U.S. economy in the postwar period (NBER 2010). We assess the severity of the Great Recession by examining the impact that it had on the labor market via the employment situation of workers of color (EPI 2025g). These workers are among the first to lose a job during a downturn of the business cycle. Between 2007 and 2010, for example, the unemployment rate for Hispanic workers more than doubled, rising from 5.6% to 12.5%. Similarly, the unemployment rate for Black workers shot up from 8.3% in 2007 to 15.9% in 2010. While the recession had been declared officially over by 2009, it took nearly a decade for the unemployment rate of workers of color to fully recover. This prolonged suffering was largely due to the anemic policy response that followed the Great Recession, largely characterized by austerity measures at both the federal and state levels (Bivens 2019; Bivens 2011). 

Compared with the Great Recession, the pandemic recession was considerably shorter. Officially, the pandemic recession only lasted two months, from February 2020 to April 2020, making it the shortest economic contraction in U.S. history (NBER 2021). But this doesn’t mean that the impact on workers was less severe. Just between February 2020 and April 2020, the unemployment rate for Hispanic workers more than tripled, and that of Black workers more than doubled.

Unlike previous contractions, the economic impact on women was particularly pronounced (Alon et al. 2021).[4] By April 2020, more than 1 in 5 (20.3%) Latina workers were out of a job and seeking employment, as the unemployment rate of these workers quadrupled between February and April of that year.[5] Similarly, the unemployment rate of Black women more than tripled during this period, rising from 5% in February 2020 to 16.4% in April 2020.[6] The nature of the economic shock explains much of the disproportionate impact on these workers, as the public health crisis and mitigation efforts fell most heavily on low-wage industries and occupations in which women of color are overrepresented due in large part to occupational segregation (Wilson 2020).

Despite the sharp rise in joblessness caused by the pandemic recession, the economic suffering didn’t last as long as during the Great Recession. Within two years, the unemployment rate for Black and Hispanic workers had fully recovered to 6.2% and 4.3% respectively, reaching historical lows (EPI 2025g). Black women and Latinas experienced similar rebounds; by 2022, the unemployment rate for Black women and Latinas (at 6.2% and 4.4% respectively) was among their lowest in recorded history (EPI 2025g). This swift and atypically even rebound was not just a function of a much shorter recession. As we detail later in this report, the swift and bold policy response to the pandemic and the economic contraction that followed was qualitatively different from that of previous recessions in the United States. Rather than the austerity and conditional support provided during the Great Recession, policymakers responded to the pandemic crisis with more generous cash transfers and extended support for unemployed workers and families with children.

Weathering crises: How did the last two recessions impact the employment security, poverty status, and housing insecurity of economically vulnerable families?

In this section, we examine how the Great Recession and the pandemic recession impacted the well-being of low-income families in three domains: their employment security, poverty status, and housing insecurity.

Employment security: Labor market attachment of families and employment rate of parents

One way of assessing the impact that business cycle downturns have on the economic well-being of families is by examining the impact that these events have on their employment security and attachment to the labor market. Since earnings represent the primary source of income for most families, involuntary separation from the labor market is likely to magnify the economic hardship experienced by these households. In this section, we examine changes in the labor market attachment of economically vulnerable families by looking at the share of families with at least one full-time earner and by capturing shifts in the employment rate of parents between the ages of 25 and 54.

Labor market attachment

Given the importance of work for low-income families, the prevalence of full-time employment in the household provides a measure of their attachment to the labor market. On average, more than two-thirds of low-income families had at least one full-time earner before the Great Recession. However, as can be seen in Figure A, differences in attachment existed by race and ethnicity even before the crisis. In 2007, 63.6% of Black families had at least one full-time earner, compared with more than 67.7% of white families and 77.7% of Hispanic families.

The Great Recession, and the weak policy response that followed, left a major dent in the labor market attachment of families. By 2010, the attachment gap between white and Black families had widened, as only 56% of Black families had at least one full-time earner that year, compared with 63.1% of their white counterparts. The share of low-income Hispanic households with at least one full-time earner also fell by nearly 10 percentage points, from 77.7% in 2007 to 68.1% in 2010. Comparatively, the rate of attachment for white families dropped by less than five percentage points during this period. While Hispanic families were more likely to report a stronger attachment to the labor market than their white peers, this advantage declined during the crisis and its aftermath. Overall, Black and Hispanic families took nearly a decade to recover, as their attachment to the labor market remained below the pre-crisis level in 2016. 

Leading to the COVID-19 pandemic and the recession, families of color regained a significant measure of the employment they had lost during the Great Recession. By 2018, for example, 64.4% and 76.6% of Black and Hispanic families respectively had at least one full-time earner. Largely due to the much shorter duration of the contraction and the robust policy response that followed, the pandemic recession had a much more muted impact on the labor market attachment of these families. Between 2018 and 2020, the share of economically vulnerable families of color with at least one full-time earner in the household declined only marginally, by about three percentage points for Black and Hispanic families.

By 2022, the share of Black families with a full-time earner had rebounded to 68.1%. This figure was nearly identical to the attachment rate for white families in the same year, and it represented the highest rate for Black families since 2007. While that number declined in 2023, it was still higher than in most years since 2007. On the other hand, by 2023, Hispanic families continued to lag considerably behind their 2007 peak.

Figure A

Employment rate of prime-age low-income parents

Examining changes in the prevalence of full-time earners within the household can provide us with a sense of the impact that crises have on the annual labor market attachment of families. But it does not capture monthly changes in the employment situation of parents over the business cycle. This is particularly important in the context of the pandemic recession since it represents the shortest economic recession in U.S. history. To best capture the impact that this economic contraction had on the employment situation of economically vulnerable parents of color, we examine changes in the employment-to-population (EPOP) ratio of low-income parents between the ages of 25 and 54.

In Figure B, prime-age Hispanic parents enjoyed higher employment rates than their Black and white peers before the pandemic. This pattern is also consistent with those shown in Figure A. Leading to the pandemic in January 2020, 94.7% of low-income Hispanic parents between the ages of 25 and 54 were employed, compared with 89.8% of white parents and 88.6% of Black parents, who face the greatest employment disadvantage historically.

As evidenced in Figure B, the gap in employment between Black and white prime-age parents widened during the pandemic recession. Much of this is explained by the disproportionate impact that the pandemic recession had on parents of color. Between January 2020 and April 2020, the employment rate of prime-age low-income Black and Hispanic parents plummeted by more than 32.7 and 27.0 percentage points respectively. By April 2020, only around half (55.9%) of prime-age Black parents had a job. At this point, prime-age Hispanic parents also saw their employment rate drop to a low of 67.7%. While the employment rate of white parents declined by 17.6 percentage points between January 2020 and April 2020, these parents remained about 29% and 7% more likely to be employed in April 2020 than their Black and Hispanic peers respectively. 

While the employment rate of parents of color declined to historically low levels in 2020, the bold policy response to the pandemic recession led to a quick rebound in the labor market. By the end of 2023, 88.9% of prime-age low-income Black parents and 91.6% of their Hispanic peers had a job. The strong recovery of parents of color also helped narrow the racial gaps in employment seen at the height of the pandemic recession in April 2020.

Figure B

Poverty status: Prevalence of poverty and severe poverty

As low-income families are largely dependent on wage earnings to meet their financial obligations, business cycle fluctuations can significantly affect their economic vulnerability. Without a proportional policy response or adequate social protection systems, these families are the first to fall victim to material hardship during an economic downturn. The Great Recession and the pandemic recession exemplify this, as these crises pushed more low-income families of color into poverty and severe poverty. This is evident when we examine changes in the prevalence, severity, and distribution of poverty over time.

Prevalence of poverty

Leading to the Great Recession, economically vulnerable Black and Hispanic families were more likely than their white peers to fall below the federal poverty line (FPL).[7] In 2007, more than half (53.6%) of low-income Black families were poor, relative to 44.6% and 38.7% of Hispanic and white families respectively (see Figure C). The Great Recession and the inadequate policy response to the downturn pushed a larger share of these families into poverty quickly and for a prolonged period of time. By 2010, more than half (51.2%) of Hispanic families fell below the FPL. The poverty rate for Black families continued to rise the following year, reaching nearly 6 in 10 (58.5%) in 2011. The poverty rates of both Hispanic and Black families did not return to pre-Great Recession levels until 2015, more than half a decade later. While racial gaps first widened and then narrowed throughout the crisis and the slow recovery, poverty rates remained much higher among Black and Hispanic families, relative to their white counterparts. 

By the lead-up to the COVID-19 pandemic and the recession that followed, the poverty rates of families of color were lower than they were in 2007, but a large racial poverty gap remained. While less than half (49.3%) of Black families fell below the FPL in 2018, they remained about 30% more likely to suffer material hardship than their white peers.

Largely because of policy, the material situation of families was not impacted as severely by the pandemic recession as it was during the Great Recession. While Hispanic families experienced a marginal increase in poverty between 2019 and 2022, rising by 3.3 percentage points (relative to the larger increase, of 6.6 percentage points, during the previous downturn), the share of Black families that fell below the FPL during this period declined. By 2022, low-income Black families recorded the lowest poverty rate (44.1%) in the entire period between 2007 and 2023. After economic relief measures expired, poverty rates were relatively stable for Hispanic families but had increased for Black families.

Figure B

Prevalence of severe poverty 

Economic downturns don’t just push economically vulnerable families into poverty. Without the support of a strong social safety net, families can fall deeper into economic deprivation when parents lose their jobs during a recession. The parents struggle to make ends meet and provide their children with the resources they need to flourish and to participate in society without shame. This happened far too often during the Great Recession as an increasing share of low-income families experienced severe poverty, with an income below half (50%) of the federal poverty line. To place this figure in context, the severe poverty threshold for the 48 contagious states and Washington, D.C., amounts to $7,825 annually for a single individual in 2025 (HHS n.d.).

Before being hit by the Great Recession, more than 1 in 4 (26.1%) Black families suffered severe poverty in 2007 (see Figure D). At this stage, Black families were about 61% more likely than their white peers to fall among the poorest of the poor. While Hispanic families fared relatively better in 2007 (with a severe poverty rate close to that of white families), disparities quickly widened. By 2010, more than 1 in 5 (21.6%) Hispanic families fell among the poorest of the poor, and an even larger share (30.3%) of Black families experienced similar material hardship, compared with 18% of their white peers. The anemic policy response to the Great Recession left an elevated share of these families under a prolonged state of economic deprivation until about 2015.

The strong policy response to the pandemic recession prevented a large uptick in the prevalence of poverty, especially for Black families, but severe poverty rates rose significantly for families as the material shortcomings of the most vulnerable worsened. Between 2018 and 2020, the share of Black families that fell among the poorest of the poor increased by 4.7 percentage points, from 22.5% to 27.2%. Hispanic families fared slightly better, as the severe poverty rate for these families rose from 15.6% in 2018 to 18.9% in 2021.

While the exposure of families of color to severe poverty fell in 2022, reaching a historic low of 22% for Black families, severe poverty again rose once economic relief measures ended. By 2023, the share of Black and Hispanic families among the poorest of the poor remained above the pre-recession levels of 2018. In contrast, severe poverty among white families had returned to the pre-recession rate by 2023.

Figure D

Housing insecurity: Prevalence and severity

Business cycle downturns that lead to significant job losses don’t just leave low-income families more vulnerable to poverty. Recessions also leave families much more exposed to housing insecurity, irrespective of whether these families own or rent their homes. As we illustrate below, this is because housing represents a significant expense for resource-constrained families. Low-income families of color are particularly vulnerable to even more pain during downturns as they are also forced to contend with an economy that suffers from an obstinate deficit in affordable housing and one in which the housing and lending markets have historically discriminated against them (Moore and Maye 2024).

In this section, we examine the impact that both the Great Recession and the pandemic recession had on the rent and homeownership rates of families of color. We also look at how the cost burden of housing evolved for both renters and homeowners during and after the crises.

Renters and housing insecurity

Given the high economic barriers to homeownership, Black and Hispanic families are generally more likely to rent, relative to their white peers (see Appendix Table 1). But, as homeownership rates declined during the Great Recession, the share of low-income families who rent has increased. Leading to the COVID-19 pandemic, in 2018, more than 80% of Black families and more than 70% of Hispanic families were renters. In contrast, slightly more than half (55.3%) of white families rented their homes that same year. While the share of renters was lower post-pandemic, racial gaps widened in 2023 with Black and Hispanic families being 61% and 36%, correspondingly, more likely to rent than their white peers.

The pandemic and the short economic downturn that followed exacerbated the already precarious position that low-income renters found themselves in after the Great Recession. By 2017, nearly a decade after the Great Recession, the share of economically vulnerable families that spend 30% or more of their income on rent remained above the pre-recession levels of 2007 (see Figure E). In 2018, for example, more than 8 in 10 Black and Hispanic families that rent were housing poor. The strong pandemic recovery did little to shelter these families from the housing affordability crisis in the U.S. that was amplified by the global health crisis (Moore and Maye 2024). By 2023, racial gaps had widened as the share of Black and Hispanic families that spend over 30% of their income on rent climbed above the peaks reached in the aftermath of the Great Recession.

Figure E

The impact of the last two recessions on families fell most heavily on those that spend more than half of their income on rent. While some of these renting families had recovered by the time that the pandemic recession rolled in, the share of Hispanic families experiencing severe housing insecurity remained above pre-recession levels in 2019 (see Figure F). Black families were particularly disadvantaged. Nearly half (48.3%) of low-income Black families spent over half of their income on rent in 2019. The situation quickly worsened for all families, as the strong economic recovery failed to protect these families from the growing affordability crisis in housing. By 2023, a higher share of white, Black, and Hispanic families spent more than half of their income on rent than at any other point since 2007. Low-income Black and Hispanic families remain most disadvantaged, as more than half of these families spend over 50% of their income on rent.

Figure F

Homeowners and housing insecurity

The Great Recession deepened the racial divide in homeownership rates, as families of color were disproportionately touched by the crisis (see Appendix Table 1). The share of low-income Black families that owned their home declined from 21.5% in 2007 to 15.7% in 2016, and from 34.6% to 28.3% during the same period for their Hispanic peers. By 2017, a decade after the start of the crisis, the homeownership rate of families had yet to recover, and racial disparities had widened. At this stage, economically vulnerable white families were 169% and 48% more likely than their Black and Hispanic peers respectively to own their home. 

Despite the steep gaps in homeownership, the pandemic recession didn’t quite lead to a suppression of homeownership rates for families. Partly as a function of younger households transitioning toward ownership, low interest rates, and the generous (albeit temporary) economic relief measures enacted in response to the pandemic recession, the downturn failed to reverse the gains in homeownership that economically vulnerable families of color were already experiencing in 2018 and 2019 (Sanchez-Moyano 2024; Callis 2023).

By 2023, slightly more than one-third (34%) of low-income Hispanic families owned their home, compared with about 3 in 10 (29.7%) in 2018. Black families also experienced gains. During this period, the homeownership rate of low-income Black families increased by 5.3 percentage points, from 16.4% in 2018 to 21.7% in 2023. By 2023, the homeownership of low-income Black and Hispanic families had achieved a near full recovery from both the Great Recession and the pandemic recession. While these achievements in homeownership helped narrow racial disparities, economically vulnerable families of color remained significantly less likely to own their homes in 2023 compared with their white peers.

While owning a home can be an important step toward wealth creation, economically vulnerable homeowners spend a significant share of their income on housing costs associated with mortgage payments, taxes, insurance, and more (U.S. Census Bureau 2004). Leading to the pandemic recession, Black homeowners remained more likely to spend over 30% of their income on housing costs (see Figure G). At this stage in 2019, 65.2% of economically vulnerable Black families who owned their homes were housing poor, compared with fewer than 6 in 10 Hispanic and white families. Despite the economic relief measures that helped economically vulnerable families weather the shock of the pandemic recession, housing insecurity rose for nearly all families. By 2023, a slightly higher share of Black and Hispanic families who owned their homes spent over 30% of their income on housing than in 2019.

Figure G

The impact of the pandemic recession and the increasing cost of housing in the U.S. is even more evident when we examine the situation of low-income families suffering from severe housing insecurity (Moore and Maye 2024). These are homeowning families who spend over half of their income on housing. Despite the short duration of the most recent downturn, the share of economically vulnerable families who face severe housing insecurity climbed by more than four percentage points between 2019 and 2023 (see Figure H). By 2023, Black families remained disproportionately vulnerable to economic pain with a prevalence of severe housing insecurity comparable to the hardship they experienced in the lead-up to the Great Recession. Since 2007, more than 2 in 5 economically vulnerable Black families who own their homes were unable to escape severe housing poverty as a result of having to spend over 50% of their income on housing costs.

Figure H

Lessons learned: Key policy choices that made a difference during the pandemic recession and are still needed to break the cycle of economic vulnerability for families

By nearly every measure of economic well-being examined above, low-income families of color weathered the pandemic recession better than the Great Recession largely because of policy choices. The weak policy response to the Great Recession, centered on austerity at the federal and state levels, contrasted sharply with the bold response to the pandemic recession guided by economic relief measures and public investments. This enabled families to avoid a prolonged separation from the job market and a worsening of their material conditions.

The last two recessions and their distinct recoveries left us with a clear blueprint for action. The economic lessons are not unfamiliar:

• Full employment policies that create tight labor markets also promote economic equity for workers and their families.
• Good jobs are union jobs.
• A strong social safety net helps families avoid unnecessary and scarring economic deprivation.

Breaking the vicious cycle that leaves low-income families more susceptible to hardship during recessions will require a renewed commitment to full employment, stronger worker rights and unions, and a robust welfare state that meets the needs of families and children. While the policies that can accomplish these objectives commonly face political headwinds, actions taken by the Trump administration and Congress will create even worse conditions.

Full employment policies are equity-enhancing policies 

While economists debate the overall rate of unemployment that constitutes full employment, there is less debate about the equity-enhancing effects of a tight or “high-pressure” labor market, one in which willing workers can obtain access to a job and the working hours they prefer (Bivens 2021; Bivens and Zipperer 2018). Sustained periods of low unemployment can effectively boost the earnings of low-wage workers and help narrow persistent racial disparities in a labor market that disproportionately disadvantages the employment situation of workers of color and the economic well-being of their families (Wilson 2023; Bivens 2021). The narrowing of these gaps would not constitute full healing from the legacy and continued expression of structural racism and xenophobia in the U.S. economy, but it would be a step in the right direction. Historical evidence points to increased economic equity via low unemployment and rapid job growth. 

The recent economic recovery from the COVID-19 pandemic and the economic contraction that followed serves as a good example of a policy regime that aimed, in large part, to provide a strong or high-pressure labor market. Unlike the economic recovery from the Great Recession, the rebound from the pandemic recession has been characterized by bold fiscal policies, via much-needed relief and strategic public investments, and more accommodating monetary policy that kept downward pressure on unemployment (Wilson 2023; Bivens 2024; Bivens 2016). The results of this policy regime are unambiguously clear: Workers of color made historic gains over the last five years in both employment and earnings, with Black and Hispanic real wages (adjusted for inflation) growing more than three times faster over the last five years than the four decades prior (Cid-Martinez, Maye, and Marvin 2025).

Instead of providing continuity to the economic regime they inherited, the Trump-Vance administration is pursuing a macroeconomic and trade policy that is sowing economic uncertainty and chaos and has already led to a contraction of economic growth in the first quarter of 2025.

Unions help narrow economic disparities that hurt workers and their families

It is easy to envision growing income disparities that threaten the economic security of working families as endemic features of the U.S. economy. Between 1979 and 2023, for example, the real annual earnings for the top 1% of earners increased by 181.7%, while the earnings for the bottom 90% grew just 43.7% (Gould and Kandra 2024). This economic divide mirrors another increasing gap between economywide productivity and the hourly pay of the typical worker, a gap that is even more pronounced for the typical Black and Hispanic worker (Moore and Banerjee 2021). But none of these trends is inevitable.

Behind these rising inequities one finds a wide range of deliberate policies choices that have weakened labor standards and stripped workers of their ability to bargain collectively for better compensation and working conditions (Mishel and Bivens 2021), including the erosion of union membership since the late 1950s (Bivens et al. 2023b).

Workers of color have been disproportionately touched by the decline of union density in the U.S. economy since they typically receive a larger wage boost from union membership. Compared with the premium of the average worker, the union pay premium is higher for Black and Hispanic workers (Bivens et al. 2023a). Black workers, for example, are more likely than white workers to be unionized (13.1% vs 11.2%), and the wage advantage unionized Black workers receive from being covered by collective bargaining is 12.6% (EPI 2025f; EPI 2025h). This premium is higher than the 11.9% average wage premium for unionized white workers. While Hispanic workers have slightly lower union coverage (9.7%) than white workers, they claim a higher union wage advantage of 16.4%.

Unions can also protect workers from discrimination and improve working conditions. Because private employment in the U.S. is for the most part “at will,” employers can terminate workers for nearly any reason, without providing notice or severance. This power imbalance harms workers of color disproportionately, as they are more likely than their white peers to report unfair dismissals (Bivens et al. 2023a). Unions protect these workers with the provision of “just cause” rights that shelter workers from discriminatory and retaliatory practices and unfair dismissals. Unions also offer workers better employment conditions. This is important for economically vulnerable families who face care needs alongside scarce resources. Unionized workers, for example, are more likely than their nonunion peers to have access to paid sick days and employer-sponsored health and retirement benefits (Shierholz et al. 2024).

Low-income working parents stand to gain the most from union membership. However, few of them belong to a union. Only 8% of prime-age Black parents and 4.9% of Hispanic parents belonged to a union in 2023. Similarly, only 5.3% of economically vulnerable white parents between the ages of 25 and 54 belonged to a union in the same year.

Instead of strengthening the rights of workers to bargain collectively, President Trump has openly embarked on an anti-worker agenda centered on weakening the federal agency tasked with protecting the most basic and fundamental U.S. labor rights, the National Labor Relations Board (McNicholas et al. 2025). These efforts will leave families of color much more vulnerable to discrimination in the labor market and to wage theft and mistreatment at work.

The social safety net expanded in response to the pandemic, which demonstrated that poverty remains a policy choice

The welfare of economically vulnerable families of color and their children is not an insurmountable problem beyond the reach of public policy. This became most evident during the COVID-19 pandemic. The federal government responded to this crisis boldly with an array of economic relief measures, such as economic impact or stimulus payments; with provisional expansions of social programs like the Supplemental Nutrition Assistance Program and the unemployment insurance (UI) program; with temporary enhancements of tax credits, such as the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC); and with increased federal assistance to state and local governments. Overall, these measures kept millions of people out of poverty in 2021 (Banerjee and Zipperer 2022). The economic impact or stimulus checks alone kept nearly 9 million people out of poverty in 2021, including more than 2 million children (Shrider and Creamer 2023).

The expanded social safety net had a notable impact on alleviating the material hardship experienced by families of color. This is most evident when we look at trends in the prevalence of child poverty. For this, we rely on child poverty rates based on the Census Bureau‘s Supplemental Poverty Measure, which accounts for cash and in-kind transfers as well as geographic differences in housing costs. By this measure, the post-pandemic social policy regime looks particularly effective in its ability to reach children of color and to alleviate the human suffering that accompanies deprivation at a young age. Between 2019 and 2021, for example, child poverty rates fell by more than half across nearly all groups, reaching their lowest levels in recorded history (see Figure I). Before the pandemic, more than 1 in 5 Black and Hispanic children fell below the supplemental poverty line in 2019. By 2021, these rates plummeted by nearly 60%, as the Black and Hispanic child poverty rate dropped to 8.3% and 8.4% respectively. The Asian American and AIAN child poverty rates also declined by more than 40% during this period, reaching historic lows of 5.1% and 7.4% respectively in 2021.

Many of the gains in poverty reduction were driven by the expansion of the Child Tax Credit (Gould 2022). Relative to all income transfers in 2021, the expanded CTC drove an estimated 44% of the reduction in child poverty that year (Parolin 2023). The impact was especially pronounced for children of color (Burns and Fox 2022). For example, this expanded credit lifted an estimated 1.2 million Hispanic children out of poverty in 2021. Similarly, more than 700,000 Black children and over 100,000 Asian children avoided falling below the supplemental poverty line in 2021 because of the expanded CTC. The rest of the social policy levers (aside from Social Security) that drove the bulk of the historic reduction in child poverty had also been provisionally expanded under the American Rescue Plan Act (ARPA), including EITC, SNAP, and UI benefits.

Despite the powerful effect these measures had in extinguishing poverty, nearly all the enhanced social safety net measures under ARPA expired by 2022. This purposeful expiration erased the bulk of the gains in poverty alleviation that families and children of color had achieved economically in 2021 (Cid-Martinez and Zipperer 2023). This is evident when we examine how the end of the expanded welfare state impacted the prevalence of poverty for children of color. Between 2021 and 2023, the poverty rates of Black, Hispanic, Asian, and AIAN children had more than doubled, returning to or exceeding 2019 levels (see Figure I). This increase marked an obliteration of the gains achieved in poverty reduction between 2019 and 2021. In fact, by 2023, the poverty rates of all groups were either higher, or no different, than the pre-pandemic estimates of 2019. 

Instead of expanding the CTC to help more low-income parents meet the basic needs of their children and reduce poverty, the Republican-led budget reconciliation bill that Trump signed into law fails to increase benefits for the 17 million children who receive less than the full value of the credit because their parents earn too little to meet the earnings requirement (Maag 2025). The Republican law is also particularly harmful to children of migrant parents, as it revokes the credit eligibility of children that are U.S. citizens if both spouses in a married couple lack a Social Security number (Tax Policy Center 2025). At least one spouse will now need to have a Social Security number in order for a U.S. citizen child to qualify for the CTC. While the Republican law increases the maximum credit from $2,000 to $2,200 per child, no significant changes in the refundability structure and earnings requirement mean that CTC benefits will remain out of reach for the children of the poorest of the poor, while middle- and high-income families continue to receive most of the benefits (Collyer et al. 2025; Crandall-Hollick, Maag, and Jha 2025).

The Republican budget reconciliation bill that the president signed into law also missed an opportunity to break the cycle of economic vulnerability that poor children face with the “Trump accounts.” These new tax-free investment accounts will provide a single government contribution of $1,000 to every child born in the next four years (Hamilton and Pressley 2025). The current administration is also discussing these accounts as a “back door for privatizing Social Security,” a program that helps narrow racial and income disparities, lifting more than one million children out of poverty in 2023 (Price and Mascaro 2025; Morrissey and Bivens 2025; Shrider 2024).

Unlike the more popular Baby Bonds, which require sustained contributions from the federal government throughout childhood with the goal of narrowing the racial wealth gap, the Trump accounts are built on the mistaken premise that low-income families lack an incentive to save when the real issue is that they lack enough discretionary income to put into a savings account (Markoff, Radcliff, and Hamilton 2025). The employment, income, and wealth disadvantages that low-income families with children face leave them in a perennial struggle to access basic necessities like health care, housing, and child care. These families are often an emergency away from falling into poverty or severe poverty. Helping families escape this generational challenge will require more than a new savings vehicle that will further widen the divide between the rich and poor by providing yet another giveaway to rich families.

Figure I

Conclusion

Low-income families of color were disproportionately impacted by the economic suffering that came in the wake of the last two recessions. Both the Great Recession and the pandemic recession worsened the employment security, poverty status, and housing insecurity of these families. In contrast with the Great Recession, policymakers responded to the pandemic with a show of strength that helped families recover their employment and bounce back from poverty significantly faster. But housing insecurity and poverty continue to leave these families particularly vulnerable when the next recession strikes.

While the prospects of a recession continue to rise due to the chaos and uncertainty generated by the Trump-Vance administration, they are deliberately ignoring the lessons of the past. This administration has failed to protect the strong labor market they inherited, has failed to empower workers to bargain for better pay and working conditions, and has failed to strengthen basic needs programs. Instead, the administration is proudly advancing an economic agenda that forces austerity on low-income families, strips away protection from discrimination for people of color, and offers more tax cuts for those who do not need it—the ultrarich. This economic agenda will push even more families into poverty and prolong the pain that follows a recession.

Appendix

Appendix Table 1

Acknowledgments

Support for this research was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation.

Notes

[1] Our classification of race and ethnicity is mutually exclusive, such that white families are non-Hispanic white, and Black families represent all families in which the head identified their race as Black in combination with other races. Hispanic families include those in which the head identified Hispanic origin, irrespective of race. Among the remaining pool, those who identified as American Indian in combination with other races are listed as AIAN, and respondents who identified as Asian or Pacific Islander in combination with other races (such as Asian and white or Pacific Islander and white) are listed as AAPI.

[2] Total family income is the sum of the individual incomes of each family member. Because unmarried partners are nonrelated household members, the unmarried partner’s total income is not incorporated in the primary family’s total family income. In cases where the income statuses of the household head and the unmarried partner are different, we use the income status of the household head.

[3] Similarly to race and ethnicity, the marital status of the family is informed by the status of the household head, such that married captures respondents who identify as married, irrespective of the presence of the spouse. All other responses are classified as not married.

[4] As we point out below, this disproportionately affected low-income families of color,  which are more likely to be headed by women.

[5] The unemployment rate here is captured by the seasonally adjusted unemployment rate of Hispanic women, 20 years old and over.

[6] The unemployment rate here is captured by the seasonally adjusted unemployment rate of Black women, 20 years old and over.

[7] This federal poverty line is informed by the official poverty measure (OPM) published annually by the Census Bureau since 1967. This measure uses a set of money income thresholds that vary by family size and composition to determine who is in poverty. While the Supplemental Poverty Measure (SPM) is considered to be a more accurate and comprehensive measure because it accounts for government transfers and geographic cost-of-living expenses, including housing, published estimates only go back to 2009 (Shrider 2024). For the purpose of this analysis, we rely on OPM to capture the impact of both the Great Recession and pandemic recession.

References

Alon, Titan, Sena Coskun, Matthias Doepke, David Koll, and Michèle Tertilt. 2021. “From Mancession to Shecession: Women’s Employment in Regular and Pandemic Recessions.” National Bureau of Economic Research Working Paper no. 28632, April 2021. https://doi.org/10.3386/w28632.

Banerjee, Asha, Margaret Poydock, Celine McNicholas, Ihna Mangundayao, and Ali Sait. 2021. Unions Are Not Only Good for Workers, They’re Good for Communities and for Democracy: High Unionization Levels Are Associated with Positive Outcomes Across Multiple Indicators of Economic, Personal, and Democratic Well-Being. Economic Policy Institute, December 2021.

Banerjee, Asha, and Ben Zipperer. 2022. “Pandemic Safety Net Programs Kept Millions out of Poverty in 2021, New Census Data Show.” Working Economics Blog (Economic Policy Institute), September 13, 2022.

Bivens, Josh. 2011. Failure by Design: The Story Behind America’s Broken Economy. Ithaca, N.Y.: Cornell Univ. Press.

Bivens, Josh. 2016. Why Is Recovery Taking So Long—and Who’s to Blame? Economic Policy Institute, August 2016.

Bivens, Josh. 2019. What Should We Know About the Next Recession? Economic Policy Institute, April 2019.

Bivens, Josh. 2021. The Promise and Limits of High-Pressure Labor Markets for Narrowing Racial Gaps. Economic Policy Institute, August 2021.

Bivens, Josh. 2024. “The Post-Pandemic Recovery Is an Economic Policy Success Story: Policymakers Took the Best Way Through a Rocky Path.” Working Economics Blog (Economic Policy Institute), October 1, 2024.

Bivens, Josh. 2025a. “The Macroeconomics of the Trump Administration: Chaotic and Harmful Policies Will Make the United States Poorer—Either Rapidly or Gradually.” Working Economics Blog (Economic Policy Institute), March 12, 2025.

Bivens, Josh. 2025b. There Will Be Pain: Continuing Low Tax Rates for the Rich and Corporations Will Hurt Working Families. Economic Policy Institute, February 2025.

Bivens, Josh, Elise Gould, Adam S. Hersh, Hilary Wething, and Ben Zipperer. 2025. Recession FAQ (FAQ). Economic Policy Institute, June 10, 2025.

Bivens, Josh, Celine McNicholas, Kyle K. Moore, and Margaret Poydock. 2023a. Unions Promote Racial Equity (fact sheet). Economic Policy Institute, July 31, 2023.

Bivens, Josh, Celine McNicholas, Margaret Poydock, Jennifer Sherer, and Monica Leon. 2023b. What to Know About This Summer’s Strike Activity: What’s Spurring the Rise in Labor Actions? Economic Policy Institute, August 2023.

Bivens, Josh, and Ben Zipperer. 2018. The Importance of Locking in Full Employment for the Long Haul. Economic Policy Institute, August 2018.

Bureau of Economic Analysis (BEA). 2025. “Gross Domestic Product, 2nd Quarter 2025 (Advance Estimate)” (news release). July 30, 2025.

Burns, Kalee, and Liana E. Fox. 2022. “The Impact of the 2021 Expanded Child Tax Credit on Child Poverty.” Social, Economic, and Housing Statistics Division (U.S. Census Bureau) Working Papers no. 2022-24, November 2022.

Callis, Robert R. 2023. “Younger Householders Drove Rebound in U.S. Homeownership.” America Counts: Stories (U.S. Census Bureau), July 25, 2023.

Cid-Martinez, Ismael. 2025. “Cuts to SNAP Benefits Will Disproportionately Harm Families of Color and Children.” Working Economics Blog (Economic Policy Institute), April 29, 2025.

Cid-Martinez, Ismael, and Stevie Marvin. 2023. “Broad Child Poverty Data for the Asian American, Native Hawaiian, and Pacific Islander Population Don’t Tell the Whole Economic Story.” Working Economics Blog (Economic Policy Institute), May 26, 2023.

Cid-Martinez, Ismael, Adewale A. Maye, and Stevie Marvin. 2025. “Workers of Color Made Historic Gains over the Last Five Years, but Trump’s Anti-Worker and Anti-Equity Agenda Threatens to Reverse This Progress.” Working Economics Blog (Economic Policy Institute), March 27, 2025.

Cid-Martinez, Ismael, Kyle K. Moore, and Adewale A. Maye. 2025. “Cuts to Medicaid Will Disproportionately Hurt People of Color and Children.” Working Economics Blog (Economic Policy Institute), April 2, 2025.

Cid-Martinez, Ismael, and Ben Zipperer. 2023. “The End of Key U.S. Public Assistance Measures Pushed Millions of People into Poverty in 2022.” Working Economics Blog (Economic Policy Institute), September 12, 2023.

Collyer, Sophie, Christopher Yera, Megan Curran, David Harris, and Christopher Wimer. 2025. “Children Left Behind by the H.R.1 Child Tax Credit.” Poverty and Social Policy Brief (Center on Poverty and Social Policy at Columbia University), June 5, 2025.

Congressional Budget Office (CBO). 2025a. “Estimated Budgetary Effects of an Amendment in the Nature of a Substitute to H.R. 1, the One Big Beautiful Bill Act, Relative to CBO’s January 2025 Baseline.” [Excel file] Accessed July 2025.

Congressional Budget Office. 2025b. “Estimated Budgetary Effects of Public Law 119-21, to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14, Relative to CBO’s January 2025 Baseline.” [Excel file] Accessed July 2025.

Costa, Daniel. 2025. “House Republican Budget Bill Gives Trump $185 Billion to Carry Out His Mass Deportation Agenda—While Doing Nothing for Workers.” Working Economics Blog (Economic Policy Institute), June 5, 2025.

Crandall-Hollick, Margot, Elaine Maag, and Muskan Jha. 2025. Options to Reform the Child Tax Credit in the 2025 Tax Debate. Tax Policy Center, May 2025.

Department of Education (ED). n.d. “Education and Title VI” (web page). Last reviewed April 11, 2025.

Department of Health and Human Services (HHS). n.d. “2025 Poverty Guidelines” [pdf]. Accessed July 2025.

Department of Justice (DOJ). 2025. “EEOC and Justice Department Warn Against Unlawful DEI-Related Discrimination” (press release). March 19, 2025.

Dianis, Judith Browne. 2025. “Eliminating the Department of Education Would Hurt Black Students.” Time, February 27, 2025.

Economic Policy Institute (EPI). 2025a. “Department of Education Reduces Workforce by Half.” Federal Policy Watch (Economic Policy Institute), July 14, 2025.

Economic Policy Institute (EPI). 2025b. “Firing EEOC General Counsel Karla Gilbride.” Federal Policy Watch (Economic Policy Institute), January 29, 2025.

Economic Policy Institute (EPI). 2025c. “Rescind EO 14021, Guaranteeing an Educational Environment Free from Discrimination on the Basis of Sex, Including Sexual Orientation or Gender Identity.” Federal Policy Watch (Economic Policy Institute), January 24, 2025.

Economic Policy Institute (EPI). 2025d. “Rescission of Biden-Era EOs on Racial Equity and Racial Justice for AANHPI, Black, Hispanic, and Native Americans.” Federal Policy Watch (Economic Policy Institute), January 24, 2025.

Economic Policy Institute (EPI). 2025e. “Rescission of EOs on Advancing Educational Equity, Excellence, and Economic Opportunity for Black, Hispanic, AANHPI, and Native Americans.” Federal Policy Watch (Economic Policy Institute), January 22, 2025.

Economic Policy Institute analysis of Current Population Survey data from EPI Microdata Extracts, Version 2025.5.8, https://microdata.epi.org.

Economic Policy Institute (EPI). 2025f. “Share Represented by a Union” [web page], State of Working America Data Library. Published 2025.

Economic Policy Institute (EPI). 2025g. “Unemployment—Unemployment Rate” [web page], State of Working America Data Library. Published 2025.

Economic Policy Institute (EPI). 2025h. “Union Wage Premium, Average (Regression-Based)” [web page], State of Working America Data Library. Published 2025.

EPI Staff. 2025. “Weak Jobs Report May Signal a Coming Recession.” Working Economics Blog (Economic Policy Institute), August 1, 2025.

Equal Employment Opportunity Commission (EEOC). 2025. “EEOC Acting Chair Vows to Protect American Workers from Anti-American Bias” (press release). February 19, 2025.

Flood, Sarah, Miriam King, Renae Rodgers, Steven Ruggles, J. Robert Warren, Daniel Backman, Annie Chen, Grace Cooper, Stephanie Richards, Megan Schouweiler, and Michael Westberry. 2024. IPUMS CPS: Version 12.0 . Minneapolis, MN: IPUMS. https://doi.org/10.18128/D030.V12.0

Gould, Elise. 2022. “Child Tax Credit Expansions Were Instrumental in Reducing Poverty Rates to Historic Lows in 2021.” Working Economics Blog (Economic Policy Institute), September 22, 2022.

Gould, Elise, and Jori Kandra. 2024. “Wage Inequality Fell in 2023 amid a Strong Labor Market, Bucking Long-Term Trends: But Top 1% Wages Have Skyrocketed 182% Since 1979 While Bottom 90% Wages Have Seen Just 44% Growth.” Working Economics Blog (Economic Policy Institute), December 11, 2024.

Hamilton, Darrick, and Ayanna Pressley. 2025. “‘Trump Accounts’ Will Save Kids? Republicans Can’t Be Serious.” Washington Post, June 11, 2025.

Hickey, Sebastian Martinez, and Ismael Cid-Martinez. 2025. “The Federal Minimum Wage Is Officially a Poverty Wage in 2025.” Working Economics Blog (Economic Policy Institute), April 28, 2025.

Maag, Elaine. 2025. “House and Senate Plans Boost Child Tax Credit, Could Help More Low-Income Families.” TaxVox (Tax Policy Center), June 25, 2025.

Markoff, Shira, David Radcliffe, and Darrick Hamilton. 2025. A Brighter Future with Baby Bonds: How States and Cities Should Invest in Our Kids. Institute on Race, Power, and Political Economy, February 2024.

Maye, Adewale A., and Valerie Wilson. 2025. “Trump Is Making It Easier for Employers to Discriminate. This Stifles Equity and Hurts Economic Growth.” Working Economics Blog (Economic Policy Institute), May 27, 2025.

McNicholas, Celine, Samantha Sanders, Josh Bivens, Margaret Poydock, and Daniel Costa. 2025. 100 Ways Trump Has Hurt Workers in His First 100 Days. Economic Policy Institute, April 2025.

Mishel, Lawrence, and Josh Bivens. 2021. Identifying the Policy Levers Generating Wage Suppression and Wage Inequality. Economic Policy Institute, May 2021.

Moore, Kyle K. 2025. “Trump’s Gutting of Public Health Institutions Is Setting the Stage for Our Next Crisis.” Working Economics Blog (Economic Policy Institute), April 21, 2025.

Moore, Kyle K., and Asha Banerjee. 2021. “Black and Brown Workers Saw the Weakest Wage Gains over a 40-Year Period in Which Employers Failed to Increase Wages with Productivity.” Working Economics Blog (Economic Policy Institute), September 16, 2021.

Moore, Kyle K., and Adewale A. Maye. 2024. “The Free Market Won’t Solve Our Nationwide Housing Affordability Problem: Equity-Focused Policy Is the Solution.” Working Economics Blog (Economic Policy Institute), May 7, 2024.

Morrissey, Monique, and Josh Bivens. 2025. Social Security FAQ (FAQ). Economic Policy Institute, August 11, 2025.

National Bureau of Economic Research (NBER). 2010. “Business Cycle Dating Committee Announcement September 20, 2010” (news release). September 20, 2010.

National Bureau of Economic Research (NBER). 2021. “Business Cycle Dating Committee Announcement July 19, 2021” (news release). July 19, 2021.

National Immigrant Justice Center (NIJC). 2025. “How Congress Codified Hateful and Extreme Anti-Immigrant Policies by Passing Trump’s Budget Bill.” July 10, 2025.

Olson, Alexandra, and Claire Savage. 2025. “Trump Fires Two Democratic Commissioners of Agency That Enforces Civil Rights Laws in the Workplace” Associated Press, January 29, 2025.

Parolin, Zachary. 2023. Poverty in the Pandemic: Policy Lessons from COVID-19. New York: Russell Sage Foundation.

Price, Michelle L., and Lisa Mascaro. 2025. “Bessent Says New Trump Child Savings Accounts Are ‘Back Door for Privatizing Social Security.’” Associated Press, July 30, 2025.

Ruggles, Steven, Sarah Flood, Matthew Sobek, Daniel Backman, Grace Cooper, Julia A. Rivera Drew, Stephanie Richards, Renae Rodgers, Jonathan Schroeder, and Kari C.W. Williams. 2025. IPUMS USA: Version 16.0 . Minneapolis, MN: IPUMS. https://doi.org/10.18128/D010.V16.0

Sanchez-Moyano, Rocio. 2024. Pandemic Homebuyers: Who Were They, and Where Did They Buy? Federal Reserve Bank of San Francisco, October 2024.

Santhanam, Laura. 2025. “Trump Cuts to Education Department Grants Will Cost Students Opportunities, Educators and Former Employees Say.” PBS News, May 28, 2025.

Sherman, Mark. 2025. “Supreme Court Allows Trump to Lay Off Nearly 1,400 Education Department Employees.” Associated Press, July 14, 2025.

Shierholz, Heidi. 2025. “The Radical Republican Budget Bill Steals from the Poor to Give Tax Cuts to the Rich.” Working Economics Blog (Economic Policy Institute), July 2, 2025.

Shierholz, Heidi, Celine McNicholas, Margaret Poydock, and Jennifer Sherer. 2024. Workers Want Unions, but the Latest Data Point to Obstacles in Their Path: Private-Sector Unionization Rose by More than a Quarter Million in 2023, While Unionization in State and Local Governments Fell. Economic Policy Institute, January 2024.

Shrider, Emily A. 2024. Poverty in the United States: 2023. U.S. Census Bureau, Current Population Reports, P60-283, September 2024.

Shrider, Emily A., and John Creamer. 2023. Poverty in the United States: 2022. U.S. Census Bureau, Current Population Reports, P60-280, September 2023.

Tax Policy Center. 2025. “Comparing Child Tax Credit Legislation in 2025” (web page). Last updated July 10, 2025.

The Budget Lab at Yale (The Budget Lab). 2025. “Distributional Effects of Selected Provisions of the House and Senate Reconciliation Bills.” June 30, 2025.

U.S. Census Bureau. 2004. Differences Between the Housing Cost and Housing Quality Estimates from the American Community Survey and the American Housing Survey (fact sheet). November 30, 2004.

U.S. Census Bureau. 2024. Poverty in the United States: 2023, “Table B-2. Number and Percentage of People in Poverty Using the Supplemental Poverty Measure, by Age, Race, and Hispanic Origin: 2009 to 2023.” [Excel file]. Accessed May 2025.

Wheaton, Laura, Linda Giannarelli, Sarah Minton, and Ilham Dehry. 2025. “How the Senate Budget Reconciliation SNAP Proposals Will Affect Families in Every US State.” Urban Institute, July 2, 2025.

Wilson, Valerie. 2020. “Inequities Exposed: How COVID-19 Widened Racial Inequities in Education, Health, and the Workforce.” Testimony before the U.S. House of Representatives Committee on Education and Labor, Washington, D.C., June 22, 2020.

Wilson, Valerie R. 2023. “Tight Labor Markets Are Essential to Reducing Racial Disparities in the Labor Market and Within the Purview of the Fed’s Dual Mandate.” Journal of Policy Analysis and Management 43, no. 1: 322–328. https://doi.org/10.1002/pam.22545.

Zipperer, Ben. 2025. Trump’s Deportation Agenda Will Destroy Millions of Jobs: Both Immigrants and U.S.-Born Workers Would Suffer Job Losses, Particularly in Construction and Child Care. Economic Policy Institute, July 2025.

These poor economic outcomes are both a consequence and an instrument of the Southern economic development model. By generating precarity, the Southern model weakens workers’ ability to reject low-quality jobs. Workers in poverty typically have few, if any, assets on which to rely in the event of a lost job. They have fewer resources with which to move to new areas and seek out better job options. They are more likely to face health challenges and will have a harder time fulfilling any care needs—either for themselves or a family member.

It should come as no surprise then that one component of the Southern model has been to do as little as possible to protect workers’ well-being on the job, in their lives outside of work, and the lives and well-being of their families. In this report, we describe how Southern state lawmakers have consistently made policy choices weakening enforcement of workplace wage, hour, and safety laws. They have sought to limit workers’ and families’ access to social safety net programs, leading to fewer families receiving the aid for which they are eligible, and providing notably ungenerous benefits to those who do receive benefits. Southern policymakers have also failed to invest in child care access, quality, and affordability; refused to protect renters and homeowners or provide those facing financial hardship with relief; and have deprioritized safe, reliable, and climate-friendly transportation policies while giving away public funds to corporate polluters.

Instead of investing in essential public goods and services that would allow communities to achieve a better standard of living, proponents of the Southern economic development model have sought to eliminate or block regulations that govern the private sector and protect workers, to reduce taxes on the wealthy and corporations, and to shrink the functions of the public sector—replacing them with private, for-profit services. The supports that Southern governments do provide are frequently geared toward businesses—large economic development packages, often with few strings attached—that have limited public benefits while reducing funding for essential services like public education.

This report highlights how Southern lawmakers have wielded the power of the state to protect and support businesses and the wealthy at the expense of working people and families. It covers many issue areas, including labor standards enforcement, environmental regulations, taxation and public spending, public education, and social safety net programs. As described throughout this series, these policy choices are often rooted in anti-Black racism and the desire to subjugate and control workers of color economically, politically, and socially.

Southern lawmakers have disinvested in labor standards enforcement, leaving workers at higher risk of abuse by employers

When it comes to protecting workers from having their wages stolen by employers, from being forced to choose between working while sick or going without pay, and from enduring other harms at work, Southern states have some of the weakest laws in the country and are less likely than other states to enforce those laws that do exist to protect workers.

According to 50-state analysis of state minimum wage law enforcement capacity, penalties for noncompliance, and the availability of additional legal remedies for victims of wage theft, Southern states have most of the lowest rankings. Seven of the 10 worst states for the enforcement of wage and hour laws are in the South: Louisiana, Mississippi, Alabama, Virginia, Florida, Tennessee are the six worst, and North Carolina is #10. Mississippi has no wage and hour laws at all, Alabama only regulates child labor, and Florida—which has the fifth weakest labor laws in the country—has no state Department of Labor to investigate labor violations and enforce laws protecting workers (Florida Policy Institute 2022; Galvin 2016).

A 2017 EPI analysis of wage theft in the 10 most populous states—including Florida, Georgia, North Carolina, and Texas—found that workers were cheated out of $8 billion annually due to minimum wage violations alone (Cooper and Kroeger 2017). In those four Southern states, over 800,000 workers lost nearly $3 billion annually due to minimum wage violations (see Table 1).2

Table 1

Florida had the highest rate of minimum wage violations across the 10 most populous states with one-quarter of low-wage, minimum wage-eligible workers in the state—over 400,000 workers—being underpaid. More than double this number of workers (835,000) experience wage theft across these four states collectively. Wage theft is rampant in these states in part because their governments fail to regulate businesses and enforce the minimal labor standards that do exist, whether local, state, or federal. States with weaker labor laws tend to have higher rates of wage theft and Southern states have some of the weakest labor laws in the country (Galvin 2016).

Though state Departments of Labor and Attorneys General play an important role in enforcement— their efforts accounted for around 19% of stolen wages recovered between 2017–2020—many Southern states do not recover stolen wages on behalf of workers (Mangundayao et al. 2021). Of the seven states that do not recover wages for employees, six are Southern states. In Alabama, Delaware, Florida, Georgia, Louisiana, Mississippi, and South Carolina, workers whose wages are stolen must seek redress either through the federal U.S. Department of Labor—which has just 611 wage and hour investigators responsible for protecting workers in all 50 states and territories or 1 investigator for roughly 270,000 workers3—or through class action litigation—which more than half of workers are barred from joining due to forced arbitration clauses in their employment contracts (Barnes et al. 2025; Poydock and Zhang 2024).

Southern states that do conduct wage theft enforcement are chronically understaffed. In Texas, for example, 80% of approved wage theft claims from an 11-year period still had not been paid out three years later (Galvin et al. 2023). Just as Southern lawmakers have vociferously blocked efforts to strengthen labor standards such as the minimum wage, paid sick leave, and workers’ organizing rights, they have chosen to not dedicate public resources to policing bad employers. They have prioritized businesses’ profit interests over workers’ right to be paid the wage they’ve earned and their ability to enforce that right.

Rampant wage theft is an unsurprising outcome of an economic agenda governed by low wages and anti-worker policies

Southerners are more likely than workers in other regions to be paid low wages, a result, in part, of relentless opposition to higher minimum wages by Southern lawmakers and their business allies. To take just one example, a bill to increase the minimum wage in Georgia has been repeatedly introduced since the federal minimum wage increased to $7.25 in 2009. Yet over the past 16 years, lawmakers have repeatedly failed to enact such legislation, leaving the statewide minimum stuck at its 2001 rate of $5.15 (GSU 2012). Since Georgia’s minimum wage remains $2.10 less than the federal minimum wage, most workers in Georgia earn at least $7.25 an hour (because federal law preempts lower state wage standards).

While the federal minimum wage is also far too low to support a basic living standard for workers in 2025, Southern states are even further behind. Only six Southern states and the District of Columbia have a higher state minimum wage than the federal minimum—Arkansas, Delaware, Florida, Maryland, West Virginia, and Virginia (EPI 2025b). Arkansas and Florida only have higher minimum wages because their residents voted to raise their statewide minimum wage through the ballot measure process, not because state politicians chose to raise wages for the lowest earners. This fact is not lost on Arkansas and Florida’s lawmakers, who have used various tactics to block the will of the voters. This year, Florida Republicans proposed a bill to let employers ask young workers to “opt out” of the constitutionally mandated minimum wage, and Arkansas lawmakers have passed a slate of bills to make it more difficult for citizen-led ballot initiatives to be considered (Rohrer 2025; Vrbin 2025).

When Southern localities have attempted to raise wages and workplace standards in response to weak standards statewide, state legislatures have frequently used harmful state preemption laws to block these ordinances from taking effect. In the South, preemption has been used as a means of entrenching white racial and economic supremacy against the will of majority-Black or majority-brown cities and counties and their elected officials. It is embedded in a long history of anti-Black racism, and it is more common in the South than anywhere else in the country (Blair et al. 2020). Additionally, in order to maintain an unbalanced labor market and block workers from unionizing to advocate for higher wages and better working conditions that unions afford, Southern policymakers have implemented right-to-work policies and bans on public-sector collective bargaining (Gould and Kimball 2015; Childers 2023; Morrissey and Sherer 2022).

Intentional disinvestment in public goods and services keeps workers and families economically insecure

Anti-poverty programs and the social safety net were structured to maintain racial hierarchy and economic precarity

Race is a social construct used to justify the subordination and enslavement of Black people. Negative stereotypes associated with Blackness—narratives of criminality, laziness, and immorality—were fabricated to maintain racial hierarchy and exclusion (DiTomaso 2024; Melson-Silimon, Spivey, and Skinner-Dorkenoo 2023). After slavery was abolished, Black Americans were forced into menial, dangerous, and low-paying jobs formerly dominated by enslaved labor: agricultural work, domestic work, and other manual labor. Then, the jobs they were segregated into were excluded from federal programs as a means of blocking Black people from accessing these benefits.

The 1935 Social Security Act (SSA), which created a social insurance program for workers after retirement and established Medicare, unemployment insurance, and cash assistance for low-income families (Aid to Dependent Children or ADC), excluded agricultural workers from eligibility for these benefits. Since Black workers were overrepresented in these jobs, the SSA served primarily to benefit white workers in its initial decades and excluded Black workers until key changes to the Act expanded its protections. To maintain racial oppression, Southern members of Congress lobbied to allow states to administer ADC themselves and to strip the SSA of a clause on ensuring “a reasonable subsistence with health and decency” (Black and Sprague 2017). Like SSA more broadly, the ADC program overwhelmingly benefited white families (despite high rates of poverty among Black families) and was structured to coerce Black families into accepting low wages in farm work (Black and Sprague 2017). A 1987 House bill proposed a national minimum benefit standard for AFDC, but the legislation died in the Senate because Southern lawmakers opposed it (Floyd and Pavetti 2022). 

Racist, anti-poor attitudes explain persistently low nutrition and cash assistance benefits for Southerners

The racist attitudes that inspired racially discriminatory social welfare programs 90 years ago persist today. For example, the public greatly overestimates the share of Black people that receive welfare benefits, and white people are less likely to support welfare programs if they believe that a large share of recipients are Black (Akesson et al. 2022). The intentionally stingy structure of public benefit programs, particularly in the South, also persists. Though racist attitudes are embedded in safety net programs across the U.S., Southern states have been particularly fervent in their disinvestment in social programs that benefit low-income families and families of color, reinforcing the harms of past policymaking. Of the 10 states that spend the least revenue per capita on public welfare expenditures, five are Southern: Alabama, Florida, Georgia, South Carolina, and Texas (Urban Institute 2022).

SNAP and Free School Lunch

The Supplemental Nutrition Assistance Program (SNAP) and Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) address food insecurity among low-income people and low-income pregnant women and young children, respectively. SNAP is the largest anti-hunger program nationwide, reaching 88% of eligible individuals in fiscal year 2022 and an estimated 41 million people in an average month in fiscal year 2024. However, participation rates are lower in the South, and four states in the region are ranked in the bottom 10 for participation rates: Arkansas (59%), Mississippi (74%), Texas (74%), and South Carolina (76%) (Cunnyngham 2025).

Despite already low participation in these programs amid considerable need, Southern lawmakers have moved to limit SNAP further. Amid the ongoing COVID-19 pandemic in 2022, six Southern states declined additional SNAP benefits for their residents that the federal government made available (Hernández 2022). Three of the four states that proposed limiting access to SNAP in 2024 are in the South (Kentucky, Maryland, Nebraska, and West Virginia) (Higham 2024). Many of the proposals by Southern lawmakers to weaken SNAP are now being copied by the Trump administration, which has threatened to make drastic cuts to the SNAP program to pay for tax cuts for the wealthy (Ross 2025). These cuts would have a devastating impact on millions of families across the South that would go hungry if not for SNAP (Bergh 2025).

The National School Lunch Program is another federal food assistance program, which provides free or reduced-cost meals to school children across the country. During the pandemic, the federal government reimbursed schools for the full price of school breakfast and lunch for all students, regardless of income. The program was set to expire at the end of June 2022 but was expanded through the summer months thanks to the bipartisan Keep Kids Fed Act (Pérez and Fitzsimons 2022). Over two-thirds (29) of the 42 House Republicans who voted against the budget-neutral bill to expand free school lunches represent Southern states (U.S. Clerk 2022). Since the expanded program ended in September 2022, school districts have struggled to fill the gap between what the federal government will pay for meals and the true cost of providing them to students. School nutrition directors in the Southeast cited food, labor, and equipment costs as a “significant challenge” at statistically significantly higher rates than the overall rates (the only region to do so) (School Nutrition Association 2025).

Cash assistance

Federal cash assistance programs date back to 1935, with the creation of Aid to Dependent Children, later renamed Aid to Families with Dependent Children (AFDC). From the very beginning, this program systematically excluded or discriminated against Black women and other women of color (Floyd et al. 2021). Racial discrimination in and exclusion from past programs endures today in the form of significant racial disparities in access to Temporary Assistance for Needy Families (TANF). TANF was the result of a bipartisan “welfare reform” effort that replaced AFDC in 1996. The new TANF program drastically restructured the funding, the generosity of benefits, and the requirements for families to receive them (ASPE n.d.). As a result, TANF reaches far fewer families in poverty than its predecessor. Over the last several decades, both the share of eligible families that receive TANF benefits and the maximum value of those benefits have declined across the country, but this decline is most severe in Southern states with large Black populations. Eligible Black children are less likely to receive TANF benefits than white children, and Black families are more likely to live in states where benefits are the lowest (Shrivastava and Thompson 2022). 

In 2021, only 20.7% of eligible families received TANF benefits, compared with 69.2% of families in 1997—the year TANF replaced AFDC (Crouse 2024). Recipiency rates of TANF benefits among eligible families in the South are often even lower. Among the 17 states where fewer than 10% of eligible families actually received TANF benefits in 2022 and 2023, 10 are in the South, and six Southern states provide TANF benefits to fewer than 5% of eligible families (see Figure A) (Bowden, Azevedo-McCaffrey, and Manansala 2025). These 17 states are home to 41% of the nation’s Black children, compared with only 28% of white children (Shrivastava and Thompson 2022).

Figure A

Southern states have also had the lowest maximum benefit levels throughout the history of AFDC and TANF (Floyd and Pavetti 2022). In recognition that benefit levels are far too low to keep up with the rising cost of living, 21 states and D.C. recently raised benefit levels, but only four of those states (plus D.C.) are in the South. As a result, Southern states, which already had the lowest benefits in the country, are now falling further behind. Among the 17 states where the maximum benefit remains less than 20% of the poverty line, 11 are in the South. And Southern states occupy seven of the 10 worst rankings for benefits as a share of the federal poverty level (see Figure B). In 2023, the maximum benefit for a family of three was $204 in Arkansas, compared with $1,243 in New Hampshire (Azevedo-McCaffrey and Aguas 2025).

Figure B

Additionally, because TANF is a block grant program, states can divert the funds to a broad range of uses beyond cash assistance for families with low incomes. TANF funds are misused in states across the country, but Southern states facing budget crises have shown a particular tendency to redirect TANF for other programs. For example, Louisiana spends much of its TANF grant on college scholarships, often for students whose families aren’t eligible for cash assistance. Georgia spends nearly half of its TANF funds on the child welfare system (Bergal 2020). And Mississippi illegally spent $77 million in TANF funds; $1.1 million went to former NFL player Brett Favre for speeches he never made and $5 million was used for a volleyball stadium at his alma mater (and where his daughter played volleyball) (Levenson and Gallagher 2022). In Arkansas, Alabama, Georgia, and Texas, the majority of TANF funds are neither spent on meeting families’ basic needs nor on connecting TANF recipients to work opportunities, the two main goals of the program (Azevedo-McCaffrey and Safawi 2022).

Lacking adequate public supports, Southern families face economic insecurity at high rates

Because the social safety net across the South was intentionally designed to be weak, families across the region face high poverty rates and struggle to reach and maintain a basic standard of economic security (Childers 2025). Economic insecurity can be measured across many dimensions, but this report focuses on food and housing insecurity since food and shelter are two of the most basic human needs.

The South has the highest rate of food insecurity

In 2023, 18 million households nationwide had limited or uncertain access to adequate food, and food insecurity was on the rise. Over a third (34.7%) of U.S. households with children headed by a single woman experienced food insecurity, and 7.2 million children lived in households where at least one child was food insecure (Rabbitt et al. 2024). Black households experienced food insecurity at three times the rate of white households, and Hispanic households experienced food insecurity at more than double the rate of white households (Coleman-Jensen et al. 2021).

The South has the highest rate of food insecurity of any U.S. region—in 2023, nearly 15% of Southern households were facing food insecurity. All U.S. states with food insecurity rates that are statistically significantly higher than the national average are in the South: Arkansas, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina, and Texas. Nearly every state with a higher-than-average rate of food insecurity is in the South, both prior to and after the COVID-19 pandemic (Rabbitt et al. 2024).

Renters and homeowners alike struggle to afford housing

Southerners are burdened by high housing costs and face high rates of evictions and foreclosures. Yet Southern lawmakers have failed to invest in affordable housing policies and protections for renters and homeowners. High-cost states like New York and California are commonly cited for having unaffordable housing. However, low incomes in the South have led to significant housing instability for renters across the region as costs rise and demand outpaces supply. Over the past decade, the states that have experienced the largest losses in low-rent units include Southern states that were previously considered affordable but have experienced increased rental demand, such as Georgia, North Carolina, and Texas. In three Southern states (Florida, Louisiana, and Texas), over half of renters are cost-burdened, with metro areas most heavily impacted (JCHS 2024a). Of the 10 metro areas with the highest share of cost burdened renters, six are in the South (five are in Florida, and one is in Texas) (JCHS 2024b).

Southern states have fewer tenant protections than other states and implemented fewer emergency protections for renters amid the COVID-19 pandemic. Nine Southern states received a rating of one star or less on the Eviction Lab’s COVID-19 Housing Policy Scorecard, which evaluated states’ strategies for ensuring stable housing for their residents. Arkansas, Georgia, and Oklahoma did not implement any statewide eviction moratorium during the pandemic (Eviction Lab 2021). States with tenant protections have lower eviction filing rates and reduced racial disparities in evictions than states with few or none (Gartland 2022). Southern cities have the highest eviction filing rates of any cities tracked, with Richmond, Virginia; Greenville, South Carolina; and Memphis, Tennessee, at the top of the list (Eviction Lab 2025).

Housing assistance programs are woefully inadequate

Housing assistance programs—like the Housing Choice Voucher program (the nation’s largest)—are not entitlements, meaning they are not available to all who are eligible for them. As a result, three in four people who are eligible for housing vouchers never receive them, and those who do obtain them face long waiting periods before receiving assistance. Of the nine states plus D.C. where wait times to receive vouchers exceed three years, six are in the South: Alabama, D.C., Maryland, Florida, Georgia, and Virginia. Two-thirds of households on waiting lists for housing assistance at large housing agencies are Black (Acosta and Gartland 2021).

Homeownership, an important wealth-building tool, is out of reach

Homeownership is most families’ primary source of wealth, and this is particularly true for Black and brown families. Yet homeownership is becoming increasingly inaccessible, due to the legacies of exclusionary housing policy, limited housing stock, and—more recently—the influence of real estate investment. In recent years, these investment companies have significantly increased their presence in the housing market, targeting areas of the country with fast population growth and weak tenant protections.

According to a 2025 report, private equity firms now own about 10% of all apartment units in the U.S., and more than half of private equity-owned units are located in five states, four of which are in the South (California, Florida, Georgia, North Carolina, and Texas). Among the 10 metropolitan areas with the largest number of private equity-owned units, 8 are in the South (Ash 2025). Black neighborhoods have been heavily targeted; nearly a third of home purchases in 2021 were to investors, compared with 12% in non-Black majority neighborhoods (Schaul and O’Connell 2022). Institutional investors tend to either flip homes or rent them out, decreasing the housing supply available to individual would-be home buyers while increasing rental costs for would-be renters (NLIHC 2022). Nine states, including North Carolina and Tennessee, have joined a federal civil lawsuit accusing the Texas tech company RealPage of illegally fixing rent prices to reduce competition and boost landlord profits. Florida, Georgia, and Texas, which also have large shares of private equity-owned apartment units, have not joined the lawsuit (U.S. et al. v. RealPage 2024).

Even for Southerners for whom homeownership is within reach, their access is more precarious compared with other regions. Foreclosure rates are higher in the South than any other region and have remained high in the wake of the pandemic. In 2024, four of the 10 states with the highest foreclosure rates were Southern states: Florida (3), South Carolina (5), Maryland (7), and Delaware (8) (Von Pohlmann 2024). Yet Southern lawmakers have done little to provide relief that would allow homeowners to stay in their homes. There are five states with no income-based policies to provide property tax affordability and they all are in the South—Arkansas, Kentucky, Mississippi, South Carolina, and Texas (Davis and Samms 2023).

Underinvestment in health, child care, and transportation infrastructure block working families from full participation in the economy

Affordable and accessible health care, child care, and transportation infrastructure are essential public goods that support families’ well-being and workers’ ability to take and hold a job. Expanding health care access and affordability allows people to get necessary care to live and work. High-quality, accessible, and affordable child care enables parents to remain in the labor market while their children learn and grow. And transportation infrastructure—e.g., roads, bridges, and public transit systems—is critical to our physical and economic mobility, enabling people to get to work or school and buy goods and services that support the local economy. But just as they have opted to not invest in safety net programs, Southern lawmakers have similarly not prioritized investments in the region’s care and physical infrastructure—policy decisions that further exacerbate poverty and economic insecurity, deepen disparities by race/ethnicity and gender, and prevent Southern families from thriving.

Southern lawmakers have resisted opportunities to expand health care access through the Affordable Care Act

The 2010 federal Patient Protection and Affordable Care Act (ACA) is a comprehensive health care reform law designed to increase health insurance access and affordability, shift the focus of health care from treatment to prevention, and improve the efficiency of our health care system. Though the ACA is particularly beneficial to states with limited health care access and poor health conditions—as is the case across the South—Southern lawmakers led initial opposition to the ACA and have remained resistant to implementing the law.

In 2010, the state of Florida sued the federal government over the ACA, arguing that two key provisions in the law were unconstitutional. Among the 25 states across the country that joined Florida in the lawsuit, six were Southern states: Alabama, Georgia, Louisiana, Mississippi, South Carolina, and Texas. Virginia filed its own lawsuit in opposition to the law. The rest of the South, except for Delaware, Maryland, and the District of Columbia, took no position—they did not oppose the law, but they also did not support it (KFF 2012). In 2018, 18 state attorneys general and two governors—10 of them from Southern states—sued over the law’s constitutionality again (CBPP 2021). Despite years of vocal opposition from Southern lawmakers, particularly in Texas and Florida, as well as President Trump’s promises to dismantle it, the ACA is increasingly popular in these states (Sanger-Katz 2023). In 2025, an all-time record of 24.2 million people signed up for an ACA plan, and enrollment has tripled since 2020 in six Southern states won by Trump in 2024, five of which had sued to block the implementation of the law (Ortaliza, Lo, and Cox 2025).

Failure to expand Medicaid has led to premature death for Southerners and hurt the South’s economy

Under the Affordable Care Act, states can expand Medicaid health benefits eligibility to nonelderly people with incomes below 138% of the federal poverty level, and the federal government will cover 90% or more of associated costs. Over 3.5 million fewer people would be uninsured if all states adopted Medicaid expansion, gains that would primarily benefit Black people, young adults, and women (Buettgens and Ramchandani 2022).

Though expanding Medicaid eligibility enjoys widespread public support and provides substantial health and economic benefits to states at very little cost, many Southern lawmakers have repeatedly rejected efforts to expand Medicaid in their states. Of the 10 states that have refused to expand Medicaid eligibility, seven are in the South: Alabama, Florida, Georgia, Mississippi, South Carolina, Tennessee, and Texas (KFF 2025). Non-expansion states nationwide and in the South have some of the highest uninsured rates in the country. Six of the 10 states nationwide with the highest uninsured rates are Southern states, and four of those Southern states have not expanded Medicaid. The District of Columbia is the only Southern jurisdiction with one of the 10 lowest uninsured rates (see Figure C).

Figure C

By refusing to accept the ACA’s Medicaid expansion, Southern lawmakers are denying tremendous welfare and economic benefits to their states. Medicaid expansion improves access to care, health outcomes, and financial security. When low-income adults have access to insurance, they are more likely to get regular preventive screenings, treatment for chronic conditions, and mental health and substance use disorder care.

Medicaid expansion has saved tens of thousands of lives and has also reduced racial and ethnic disparities in health insurance coverage and access to care. In states that have expanded Medicaid, low-income adults have less medical debt and better access to credit, and are less likely to face eviction (Harker and Sharer 2024). Medicaid expansion also has implications for the broader economy of a state, including boosted federal revenues to the state and millions more in state and local taxes generated through increased economic activity (Ku and Brantley 2021). Despite arguments by critics that Medicaid expansion disincentivizes work, multiple studies have found little to no reduction in labor force participation because of expansion.4 Conversely, Medicaid is an important support for working people—particularly those with disabilities or chronic conditions—because it makes it easier for recipients to look for a job, work, and do a better job at work (Harker and Sharer 2024). Disabled adults are significantly more likely to be employed in expansion states versus non-expansion states and, as shown in Figure D, Southern states have some of the highest disability rates.

The health care sector is a major employer across the country and in the South. Twelve Southern states have a higher-than-average share of the population employed as health care practitioners and technicians,5 the majority of whom are employed in hospitals (BLS 2023). Hospitals in states that expanded Medicaid—especially those in rural areas—have fared better than those in non-expansion states, as increased insured rates lead to Medicaid covering care costs that would otherwise be uncompensated (Broaddus 2017).

The health and economic benefits of Medicaid expansion are numerous, but so are the costs of failure to expand. Between 2014 and 2017—just three years—an estimated nearly 12,000 older adults in the South died prematurely because of their states’ failure to expand Medicaid (Broaddus and Aron-Dine 2019). States that have not expanded Medicaid have experienced large increases in hospital closures, particularly in rural areas (Lindrooth et al. 2018). In the South, which is the most rural region of the country, a single rural hospital may be the only accessible point of health care for an entire community and its single largest employer. The closure of rural hospitals leads to increased transit times to access care—including for life-threatening emergencies—as well as losses in jobs and population that hinder the community’s ability to raise revenue and attract employers (Wishner et al. 2016). Of the 148 rural hospitals that have closed since 2011 (the year after the ACA was passed), just over half (76) of those closures occurred in the 10 states that have not expanded Medicaid, and 66 of those closures occurred in Southern non-expansion states. Nearly half of all Southern hospital closures occurred in just Tennessee and Texas (UNC Sheps 2023).

The failure to expand Medicaid has also led to worsening economic disparities. In states that have not expanded Medicaid, medical debt has become more concentrated in low-income communities in these states. While Southerners were more likely to have medical debt prior to the ACA, the failure to expand Medicaid widened debt disparities between the South and other regions. A recent nationwide analysis of credit scores found that the South had the lowest credit scores of any region, and that the share of residents with overdue medical debt was the strongest predictor of these scores (Van Dam 2023).

Refusal to invest in child care exacerbates economic insecurity for Southern families and providers alike

States in the South and across the country are facing a child care crisis, both for families who cannot afford the steep cost or for whom there are few available child care providers, as well as for early educators who are frequently paid poverty wages to provide this essential care. In most of the country, monthly child care is more expensive than housing, and in 38 states and D.C., child care costs more than public college tuition. Monthly infant care costs range from $572 in Mississippi to as high as $2,363 in D.C. Though costs are much lower in Mississippi than D.C., the impacts are felt similarly because household incomes are much lower in Mississippi. A median family with children in Mississippi would have to spend 10% of their income on child care, compared with 11.8% in D.C. (EPI 2025a).

During the pandemic, the federal government invested $24 billion into child care stabilization through the American Rescue Plan Act, an unprecedented lifeline to the child care sector that supported hundreds of thousands of providers and nearly 10 million children (ACF 2022). As these federal investments phased out, some states sought to fill the gap with state funding for child care (as in Vermont) or with tax credit expansions to pay for child care (as in Colorado, New York, and Utah) (Cohen 2023; Butkus 2024).

However, lawmakers in the South have deprioritized bills to address the child care crisis. In Florida, Kentucky, and West Virginia,6 bills to address child care affordability failed this legislative session— even though capping child care costs would boost labor forced participation, increasing these states’ economies by billions of dollars per year (EPI 2025a). And in Texas, despite a record state budget surplus of $32.7 billion in 2023 and advocacy by nearly three dozen child welfare organizations, state lawmakers declined to spend just $2.3 billion (less than a tenth of the surplus) to keep child care providers afloat amid the expiration of federal COVID-19 relief funds (Dey 2023). Instead, the state spent over a third of the surplus on new property tax cuts, which inherently benefit the wealthiest property owners.

Child care affordability is often measured based on the share of family income spent on a certain type of care—often infant care, since this is the expensive type of care. Though the share of families that can afford infant care is higher in the South than in other regions because infant care costs are generally lower, this affordability is based on median family income across all family types in aggregate, with most families with children comprising a two-parent married couple. This affordability calculation masks disparities in child care affordability between single- and two-parent households: As unaffordable as child care is for typical families, it is even more out of reach for single-parent households. In Southern states, an average of 38% of children live in a single-parent household—the highest nationwide (Annie E. Casey Foundation 2023). Single-parent households have a much higher cost burden, spending an average of three times as much for child care as married-couple families (35% of their income, compared with 10% for a married couple) (CCAoA 2025).

In the South, many states that pay the lowest minimum wages allowed by federal law, lag in workers’ rights, and refuse to expand Medicaid now also ban or severely limit abortion access (Banerjee 2022) while failing to take action to make child care affordable. For low-income women and women of color in states that have not prioritized health and economic security for children and families, forced childbirth and associated long-term, steep child-rearing costs will only exacerbate poor economic and health outcomes for both parents and their children, as well as racial and gender disparities in those outcomes.

Existing transportation infrastructure is inadequate for drivers, riders, and pedestrians

Safe, reliable, and affordable transportation is another huge factor affecting people’s access to good jobs (and the quality of their commute), access to essential goods and services, and overall well-being. It is also a major category of spending for U.S. households, accounting for 17% of annual household expenditures—more than every category except housing (BLS 2024a). At the same time, the U.S. transportation system faces major challenges, including high rates of injuries and fatalities, increasing roadway congestion, aging infrastructure, poor public transit access, and the need to reduce emissions in the face of climate change. These challenges have significant consequences for the U.S. population. Transportation incidents are the leading cause of death for U.S. workers, nearly 40% of major roads are in poor or mediocre conditions, transportation is the largest source of greenhouse gas emissions in the U.S., and 45% of people in the U.S. have no access to public transportation (BLS 2024b; TRIP 2022; EPA 2022; APTA n.d.).

One reason U.S. roads are in such disrepair is because of insufficient state spending on road maintenance. When states do invest in transportation infrastructure, they often use federal funding to build new roads or expand existing ones instead of prioritizing road repair, leaving existing roads in poor condition to worsen and creating new unfunded maintenance liabilities. After the Obama administration directed $47 billion for transportation projects in 2009, the share of U.S. roads in poor condition increased as states—especially Southern states—used the money for continued road expansion instead of road repair. Of the eight states that spent at least 45% of highway capital funds for roadway expansion (Arizona, Arkansas, Indiana, Mississippi, Nevada, North Carolina, Texas, Utah), four are in the Southeast (Bellis, Osborne, and Davis 2019). This pattern has continued with the latest batch of federal infrastructure funding. The Biden administration’s 2021 Infrastructure Investment and Jobs Act (IIJA) directed $643 billion for highways, roads, and bridges over five years—the largest ever federal infusion for transportation. Yet three years in, fully a quarter of the funds have been used to expand highways, which will create new emissions equivalent to the operation of 20 coal-fired power plants for a year. Of the 10 states spending the most IIJA funding on highway expansion, six are in the South. Meanwhile, of the 10 states spending the most IIJA funding on public transit and passenger rail per capita, only D.C. is in the South (Salerno 2024).

Public transit remains deprioritized in comparison with automobile transit, even as the need to reduce greenhouse gas emissions while expanding transit equity becomes more urgent. According to the National Resources Defense Council, of the 10 states doing the least to improve equity and climate outcomes in transportation, six are in the South, and the Southeast ranked lowest of any region on its commitments to these goals (Henningson 2025). In 2024, Georgia’s governor, acknowledging “record job and population growth” in the state, announced a $1.5 billion transportation funding plan to improve and expand roads, highways, bridges, and freight infrastructure, but did not dedicate any funding to public transit projects (Kemp 2024). In fact, Georgia’s MARTA system is the only transportation agency in operation that has never received any state funds (King 2023).

There are also substantial disparities in transportation access based on race, ethnicity, socioeconomic status, and ability across the country. Because of racial and ethnic income and wealth disparities, workers of color are less likely to own a car and be more dependent on public transit (Austin 2017). Yet due to legacies of segregation, white flight and suburbanization, and corresponding disinvestment in urban transit in favor of the federal highway system, Black workers, other workers of color, and low-income people face worse transit quality and longer commute times (Sánchez, Stolz, and Ma 2003; National Equity Atlas 2019). They are also more likely to be killed in traffic accidents while walking, cycling, or riding in a car (Raifman and Choma 2022).

The lack of affordable, accessible public transportation is also unevenly distributed across disability status and urbanicity. Across the country, disabled adults of all racial and ethnic groups are twice as likely as non-disabled adults to face inadequate transportation access, and over a half a million disabled people are unable to leave their homes as a result (Urban Institute 2020). Of the 10 states with the highest share of adults with a disability, eight are Southern states (see Figure D).

Figure D

Additionally, though public transportation is more commonly discussed in the context of cities, access to transportation in rural areas poses unique challenges that are becoming more urgent as the population ages and demand for accessible public transit grows. The East South Central Census division encompassing Alabama, Kentucky, Mississippi, and Tennessee is the least urban area in the country (U.S. Census 2022). And in nine Southern states, the share of rural residents with no access to intercity transportation—rail, bus, or airline—exceeded the national average (14.6%). While some Southern states have increased access to intercity transportation between 2006 and 2021, seven Southern states have seen declines in access over the same period, with double digit declines in Oklahoma (11.7 percentage points) and Arkansas (18.5 percentage points). Populations in rural areas without access to intercity transportation are more likely than those in more connected rural areas to be over the age of 65, low-income, in poverty, unemployed, and carless. With no car and no public transit, many rural residents in the South and around the country are effectively denied access to employment, education, and other pathways to greater economic security, and older adults are forced to rely on the kindness of others to meet their basic needs (BTS 2023). 

The failure to invest in affordable health care, accessible high-quality child care, and convenient climate-friendly transportation systems is shortsighted and has worsened quality of life across the South. When workers and families are not able to maintain their health and well-being and access services that enable them to fully participate in civic, social, and economic institutions, we all suffer.

Southern lawmakers weaponize the poor outcomes of their own public revenue failures to fuel a vicious cycle of bad policies

The Southern economic development model is characterized by regressive tax and budget systems, with revenue programs that extract a larger share of income from families with the least ability to pay and often deliver targeted benefits specifically to businesses and the wealthy. These policies weaken the labor market power and jobs options for low-income families, contribute to income and wealth inequality, and fail to raise adequate revenue for public goods and services. Southern lawmakers have then frequently responded to revenue shortfalls with additional regressive forms of revenue generation like fees and fines, while providing tax cuts and economic development subsidies to businesses with the claim that such benefits to businesses will “trickle down” to the public at large. They also use the failure of such policies as a pretext to shrink the public sector and outsource core government functions to private companies motivated by profit as opposed to effectiveness or equity.

Regressive tax and budget policies exacerbate inequality

Taxes are the primary means by which state and local governments raise revenue to pay for essential goods and services, such as education, health care, infrastructure, and public safety. However, the Southern model’s tax policies have resulted in chronic underfunding that exacerbates income and wealth disparities by race and class and keeps living standards inadequate for many residents.

Anti-tax sentiment in the South is a direct legacy of slavery. Because enslaved people were treated (and taxed) as property, enslavers saw property taxation as an existential threat and worried that non-enslaving majorities would use taxation to weaken—and eventually abolish—the institution of slavery. Enslavers went to great lengths to preserve their power through anti-democratic means, including manipulating the rules of the legislative process, ensuring weak government, and limiting the constitutionality of taxation (Einhorn 2006). During Reconstruction, racist former enslavers rebranded themselves as “concerned taxpayers” to forge an alliance with small white farmers, sow racial division, and justify racist violence (Das 2022). Through the mid-19th century, taxes levied on enslaved people and the wealth they created for white enslavers through their forced labor were the single largest revenue source for state governments (between 30–60%) and were paid mostly by large landowning enslavers. When slavery was abolished, white Southerners, particularly small non-enslaving landowners, vehemently opposed all efforts to replace “slave tax” revenue with other tax measures (Lyman 2017).

In the mid-1880s, Southern states relied heavily on corporate income taxes—a legacy of slavery-era opposition to property taxes that was nonetheless fairly progressive in the sense that corporations generally have a higher ability to pay. However, amid the economic expansion following WWII, Southern states slashed corporate tax rates to lure businesses to the region and enacted sales taxes to fill the revenue gap (Das 2022). This tax policy agenda is being reenacted in many Southern states under the modern Southern economic development model. Rather than being described as “anti-tax” this model is better characterized anti-tax for the wealthy and corporations. Since corporate taxes are paid primarily by wealthy shareholders and sales taxes are paid primarily by low- and middle-income households, this shift in the tax burden amounts to an upward redistribution of income that persists in the modern South and hinders the region from raising adequate revenue.

Today, state taxation structures in Southern states are some of the most regressive in the nation. A tax is “regressive” when it forces people with lower incomes to pay a higher share of their income in taxes than people with higher incomes. The states with the most regressive tax systems typically rely heavily on sales and excise taxes (extremely regressive) and property taxes (somewhat regressive). States with regressive tax systems also typically lack a graduated personal income tax or impose low corporate income taxes. Of the 10 states with the most regressive tax structures, half are Southern states: Arkansas, Florida, Louisiana, Tennessee, and Texas (ITEP 2024). In 11 Southern states, the poorest 20% of residents pay more in sales taxes alone than the top 1% of residents pay in all state and local taxes combined (see Figure E and Appendix Table 1).

Figure E

Regressive taxes are not only inequitable from an economic justice perspective but also as a matter of racial and gender justice. Since Black, Hispanic, and women workers are more likely to earn low wages, they disproportionately bear the brunt of tax structures that tax the lowest paid workers the most. Tennessee, a state that also lacks a personal income tax and relies heavily on sales and excise taxes, is a case in point. In Tennessee, Black and Hispanic families—whose median household incomes are 19% less than the statewide median of all families—are taxed at a rate higher than the statewide average, while white and Asian families—with median household incomes 22% above the statewide average—are taxed at a lower-than-average rate.7 Meanwhile, in the more progressive taxation state of Minnesota, Black, Hispanic, and Indigenous families are taxed at below-average rates, in line with their relatively lower family incomes. Regressive taxes exacerbate racial, ethnic, and gender income inequality while progressive taxes can counteract these disparities (Davis and Guzman 2021).

Yet instead of addressing their inequitable tax structures, the South has led the charge of further increasing tax regressivity in recent years. Of the eight states that have moved toward regressive state tax structures since 2018, five are in the South: Arkansas, Kentucky, Mississippi, North Carolina, Ohio, and West Virginia (ITEP 2024). In four of these states, lawmakers have expressed interest in fully eliminating the personal income tax (Davis and Trinidad 2023). In her inaugural address, Arkansas Governor Sarah Huckabee Sanders committed to “eventually wipe the income tax off the books” and an overall agenda of deregulation (Sanders 2023), declaring:

“We will no longer surrender our jobs, our talent, our businesses and our economic might to states like Tennessee and Texas that have no income tax. Arkansas is going to fight for every job – and let me be clear, Arkansas is going to win. … [A]s long as I am your governor, the meddling hand of big government creeping down from Washington DC will be stopped cold at the Mississippi River. We will get the over-regulating, micromanaging, bureaucratic tyrants off of your backs, out of your wallets and out of your lives.”

In 2024, Sanders signed into law a bill to reduce tax rates on the wealthy and corporations, which will cost the state hundreds of millions of dollars per year (DeMillo 2024). In 2025, Mississippi lawmakers passed a bill to reduce the state’s personal income tax from 4 to 3%, and eventually eliminate it entirely, replacing it with an increased regressive tax on gasoline (Vance, Goldberg, and Pender 2025). Also this year, Kentucky passed a similar income tax elimination bill (Sonka 2025) and Florida’s governor proposed eliminating all property taxes (Perry 2025). Florida already has the most regressive state tax system in the country, in part because it has no personal income tax and relies heavily on sales and excise taxes, the most regressive type of tax. But property taxes account for over 40% of the state’s total tax revenue (ITEP 2024), so unless that lost revenue is made up through progressive means—which the governor has ruled out—eliminating property taxes will be disastrous for the state’s budget and could lead to a complete dismantling of the public school system (which gets around half its funding from property taxes) (Sczesny 2025). Of course, for Florida’s governor—who has been on a years-long crusade against public schools (Strauss 2022) and recently applauded President Trump’s move to shutter the federal Department of Education (DeSantis 2025b)—dismantling the state’s education system may, in fact, be the goal.

Inadequate revenue generation leads to low public spending, exacerbates racial disparities

Due to their high poverty rates, regressive tax structures, and failure to tax corporate income, Southern states collect little revenue per capita compared with other states (TPC 2023a) and are highly dependent on federal government spending to meet their residents’ basic needs. Southern states receive more federal government spending than they contribute to the federal government income and business taxes. Because Southern states have lower-than-average income levels and higher poverty rates, these states receive higher-than-average federal contributions to social safety net programs like Medicaid, SNAP, and TANF. Of the 10 states that rely on federal government funding the most, seven are Southern states. In Florida, where the governor has boasted about saving taxpayers’ money by returning federal funds (DeSantis 2025a), the state accepted nearly $37 billion more in federal funds than it paid in the form of taxes, equivalent to about a third of the state’s budget for fiscal year 2026 (see Figure F).

Figure F

As a result of chronic revenue shortfalls, state governments in the South spend less per capita overall than other regions, as well as less per capita on primary and secondary education and public welfare (TPC 2023a; TPC 2023b). Lawmakers in these states justify low spending on public welfare and programs that benefit all low- and middle-income workers by weaponizing ideological narratives about deservedness that are steeped in racism and misogyny and sowing racial and class division (Black and Sprague 2017). In reality, public revenue shortfalls harm everyone because the goods and services provided by the public sector are used by everyone. And when states are unable to raise adequate revenue, rather than making up the shortfall by seeking additional revenue through progressive taxation or clawing back subsidies provided to private businesses, the first budget items to be defunded are frequently public-sector jobs and the services public-sector workers provide.

These dynamics were further exacerbated by the pandemic. Revenue-starved states received millions of dollars in federally provided fiscal recovery funds as part of the package of federal COVID-19 response bills. Yet instead of using those funds for necessary public services, nine Southern states exploited resulting temporary budget surpluses to enact costly permanent personal or corporate income tax cuts.8 In North Carolina and West Virginia, the cost of the cuts exceeds 10% of total general fund revenue (Tharpe 2023). In Texas, nearly half of the $15.8 billion in fiscal recovery funds the state received were used to shield businesses from future unemployment insurance tax increases (Villanueva 2022).

Southern states rely heavily on non-tax revenue sources like fees and fines, which exacerbate income and racial inequality

The failure of states and localities to raise adequate revenue equitably imposes a double penalty on low-income communities of color. Lawmakers impose regressive tax systems that prioritize the wealthy and corporations, raise insufficient revenue, and then use budget shortalls to justify deep cuts to the public sector and social programs. At the same time, lawmakers in many Southern states simultaneously impose regressive fines and fees on these same communities to offset budget gaps. States and localities across the country, particularly rural and low-income communities, are heavily dependent on fees and fines imposed for minor violations or as alternatives to incarceration. Of the 10 states that rely most heavily on non-tax revenue (including fees, fines, and other surcharges) to fund the public sector, five are Southern states. A third or more of these states’ revenue comes from non-tax sources (ITEP 2024).9

There are racial disparities in every aspect of the criminal legal system, and the assessment and collection of fines and fees is no exception. Black people are more likely to be subject to traffic stops (Pierson et al. 2020)—the most common way people encounter police in the U.S.—and Black communities are also targeted with higher rates of fine and fee enforcement (USCCR 2019). Cities with larger Black populations (most of which are in the South) rely more heavily on fine and fee revenue. Southern states—particularly states with a history of convict leasing10—impose more fees and more mandatory (as opposed to discretionary) fees than any other region (Zvonkovich, Haynes, and Ruback 2022). Though lawmakers in many Southern states have introduced proposals to curb regressive fines and fees, such proposals have made little progress in the states most reliant on them (FFJC 2024).

The expectation that public agencies—charged with serving the public good—seek revenue from fines and fees in order to fund the agencies that employ them represents a profound conflict of interest. Indeed, all six of the small cities across the country that rely on fines and fees for at least half their revenue (five of which are in the South) spent at least a third of their budgets on law enforcement activities in 2017 (TPC 2024). The use of fees and fines to fund government or even new law enforcement activities can undermine public trust in institutions and their perceived legitimacy as agents of the public good (Boddupalli and Mucciolo 2022).

On top of the enduring harms that fines and fees impose on adults and youth of color and their corrosive influence on democracy, fines and fees are an inefficient method of raising public revenue. A study of 10 counties across Texas, Florida, and New Mexico found that these jurisdictions spent an average of 41 cents for every dollar collected from in-court and jail costs alone, and billions of dollars go uncollected every year because individuals are unable to pay (Menendez et al. 2019).

Southern dependency on fine and fee revenue deepens poverty and racial inequality, encourages expansion of the criminal legal system, and limits localities’ ability to invest in public services that benefit everyone. While Southern states are structuring their public financing in regressive and harmful ways, they are simultaneously giving enormous tax breaks and public subsidies to corporations. As the next section explains, the one area where Southern governments are not stingy with public dollars is in providing supports to business.

Economic development incentives fail to produce community benefits and drain limited public revenue to the private sector

Modern urban governance in the United States is so dominated by entrepreneurialism—a stance that prioritizes economic development and public investment into projects that mainly benefit the private sector—that this mode of governance may feel natural or unassailable. However, entrepreneurialism is a relatively new advancement, one that emerged in the early 1970s in response to a combination of deindustrialization, fiscal austerity, and the rise of neoconservatism and privatization (Harvey 1989). Whereas “managerialism” (which primarily focused on the local provision of services for the benefit of residents) was once commonplace, state and local tax and budget policy today is increasingly tilted in favor of the private sector, while benefits to the public are second-order and, in some cases, nonexistent.

Entrepreneurialism often takes the form of corporate subsidies: economic development grants, reimbursements, loans, tax abatements, infrastructure development, and other forms of financial assistance to businesses by federal, state, or local governments. Although not unique to the South, the use of publicly funded corporate subsidies is particularly harmful to Southern states that have long faced revenue shortfalls. These tax abatements (which allow a selected business to pay lower taxes or eliminate its tax obligation entirely) and other subsidies (such as direct cash grants to companies) are taxpayer funded and directly reduce the state’s ability to fund public services.

Working families pay their fair share (or more) in state and local taxes, with the expectation of public investment in essential public goods and services like schools, health care, food assistance, transit, and affordable housing. Instead, this public revenue is given to corporations in the form of subsidies or tax breaks. In exchange for corporate tax benefits, firms that receive such awards often make vague promises about projects’ benefits for local communities. However, these promises are notoriously difficult to assess. Southern states have particularly low disclosure requirements—Alabama and Georgia have no meaningful disclosure at all. Nine Southern states have below-average disclosure scores according to public-spending watchdog group Good Jobs First (Tarczynska, Wen, and Furtado 2022). As a result, it is extremely difficult for researchers, advocates, and the taxpayers themselves to investigate whether corporate incentives serve the public good. 

In 2022, a banner year for corporate subsidy packages to individual companies exceeding $100 million, nearly half (14 out of 30) of these “megadeals” were awarded to businesses in Southern states (GJF 2022a). These megadeals—which include but are not limited to tax breaks—amounted to at least $10.7 billion dollars in taxpayer funds given by these state and local governments to large corporations (see Figure G). Of the nine companies that received megadeals worth $1 billion or more in 2022 (the costliest year on record for megadeals), four of those deals were provided by Southern states (Tarczynska 2022). And three of the four megadeals in the South went to the auto manufacturing industry, which has grown significantly in the South over the past two decades as businesses seek to take advantage of the South’s weak regulatory environment, anti-worker policies, and use of public revenue to attract private investment. But these incentives have not produced the family-sustaining, union jobs historically associated with the Midwestern auto industry. Instead, faced with low wages, unsafe workplaces, and the anti-union sentiment inherent to the Southern economic development model, Southern autoworkers must fight tirelessly just to achieve any benefits from the public subsidy afforded their employers (Childers 2024d).

Figure G

In recent years, Southern states have given away billions of dollars in public revenue in the form of direct subsidies and tax breaks to corporations. This is revenue the state would have raised if it taxed corporations regularly, as opposed to preferentially. For example, in Tennessee, forgone revenue between fiscal years 2017 and 2021 exceeded the state’s total budget for transportation in 2021 by over $100 million (GJF 2022c). In the city of Memphis, where public pensions are chronically underfunded, public dollars spent on tax abatements and subsidies could have fully funded the city’s pension obligations for every year between 2009 and 2012 (Cafcas et al. 2014). In Louisiana, the state lost more due to economic development tax breaks than it spent on transportation, corrections, youth development, and agriculture combined in 2021 (GJF 2022b).

The impact of tax abatements on public education is particularly extreme because property taxes (which are a common target of economic development tax breaks) are the single largest source of funding for public schools across the country. In 2019, of the 10 school districts that lost the most revenue to tax abatements, six were in Southern states—three in South Carolina, two in Louisiana, and one in Texas (Wen, Furtado, and LeRoy 2021).

Louisiana’s five most populous school districts lost nearly $40 million to economic development tax breaks in 2021. And Texas, which lost $1.23 billion to corporate subsidies in 2022, is home to 49 of the 52 school districts nationwide where per-pupil losses exceed $1000 per year. These revenue shortfalls disproportionately harm low-income, Hispanic, and Black students whose school districts are more likely to hand out costly tax abatements (Wen, Furtado, and LeRoy 2021).

To hold companies accountable to the expectation that publicly funded projects benefit the public, advocates for workers and communities have leveraged tools like Project Labor Agreements (PLAs) and Community Benefits Agreements (CBAs). A PLA is a pre-hire collective bargaining agreement negotiated among multiple contractors, unions, and project owners that establishes the terms and conditions of employment that will apply to a specific construction project, and CBAs are PLAs that also involve community stakeholders and may include community-focused benefits beyond any employment requirements.

Unfortunately, most Southern states have provisions in state law that block local governments from abiding by PLAs, resulting in economic development projects that often do not support local workers and communities. In the past two years, Alabama, Georgia, and Tennessee have signed measures into law that bar companies from receiving state economic development funds if they voluntarily recognize unions, and Tennessee enacted a bill that bars companies from receiving state economic development funds if they enter into a community benefits agreement. These policies reflect an economic model that seeks to enrich business interests at the expense of workers and communities, in this case using public money to disempower workers and block communities from benefiting from economic development (Sherer 2024; Tennessee General Assembly 2025).

Privatization is offered as the cure for hollowed-out public services

From public schools to the social safety net, Southern lawmakers have led the charge to privatize public services and replace them with for-profit alternatives that are often worse, more expensive, and unconcerned with values like equity and fairness. Privatization is a central tenet of the Southern economic development model because it prioritizes the interests of the wealthy (who are overwhelming white) and businesses at the expense of working people, low-income Black communities and communities of color, and public-sector workers. The public sector has historically been a source of good union jobs and a pathway to the middle class—particularly for Black workers (Morrissey 2020). Thus, privatization serves the Southern model both in its service of business interests at the expense of workers and in its agenda to limit the role of the public sector in regulating corporate power and serving the public good.

Private school vouchers are a modern-day effort to reinstitute segregation, whether by race, class, or religion

The privatization of public schools in the United States is rooted in anti-Black racism and efforts to resist desegregation. In the decade prior to the 1954 Brown v. Board of Education ruling mandating school segregation, private school enrollment increased 43% in the South. By the end of 1956, six Southern states had passed constitutional amendments permitting the state to divert public funds to private schools (Suitts 2019), and by 1965 there were nearly one million private school students in the South. While public schools desegregated slowly over the 1960s and 1970s, private school enrollment grew, particularly in the South. By the early 1980s, the South accounted for nearly a quarter of private school enrollment nationwide, and most students attended schools where 90% or more of students were white (SEF n.d.). 

Though voucher advocates have claimed that such programs improve educational outcomes for low-income Black and Hispanic children, an extensive body of research finds that vouchers do not improve educational outcomes and more likely worsen them (Mast 2023). Voucher programs divert public funds to private schools (predominantly religious schools) where white students are overrepresented—these margins are greatest in the South (Suitts 2019). Private school voucher programs allow primarily white wealthy families, many of whom are already sending their children to private schools, to offset these costs with public dollars that are intended for public schools. In many states with private school voucher programs, most voucher recipients attend religious schools, amounting to billions of taxpayer dollars being used to subsidize religious education.

This subsidization of religious education parallels a simultaneous effort—popular in Southern states—to implement government-sponsored, often conservative religious ideology in the public school system (Meckler and Boorstein 2024). Oklahoma approved an application for a publicly-funded Catholic charter school back in 2023 (Perez Jr. and Gerstein 2025). The case went all the way to the U.S. Supreme Court, which recently affirmed the decision of the Oklahoma Supreme Court blocking the use of public funds for the nation’s first religious public charter school. However, given an evenly split vote, the ruling lacks precedential force (Saiger 2025), leaving the door open for states to continue eroding the separation between church and state through the use of government funds for religious education. A decision approving of the direct use of government funds to pay for religious education would amount to a significant erosion of the separation between church and state.

Today, 31 states and D.C. have some sort of voucher program in place that diverts public funds to private schools (Wething 2024). Though only 13 of those states (plus D.C.) are in the South, the South has some of the most established and expensive programs, spending hundreds of millions—or, in the case of Florida, billions—of public dollars to subsidize private schools (Dollard and McKillip 2025). In 2025 alone, public education advocates tracked voucher expansion bills in at least 22 states (PFPS 2025). After years of opposition, Texas passed a private school voucher program that will cost the state billions over the next few years (Edison 2025), and South Carolina reinstated a private school tuition subsidy program that had been ruled unconstitutional (Kesler 2025).

Efforts to implement and expand voucher programs in states across the country—through private school vouchers, Education Savings Accounts, and tax credits—are key to the relentless and enduring campaign to defund and privatize public education, a movement that also includes manufacturing mistrust in public schools and targeting educators and their unions (Mast 2023). The result, by design, is the defunding of the public school system, which in turn strengthens the arguments in favor of privatization as a solution to an ailing public school system. The Trump administration’s move in early 2025 to shutter the Department of Education is the culmination of the decades-long campaign to abolish public education, a campaign that began in the South and has been spearheaded by Southern lawmakers and billionaire-backed right-wing groups (Sullivan 2025; Blake 2024; Gott 2018).

Southern lawmakers have long sought to privatize our most important and popular social programs

Republicans in Congress and at many levels of government have long sought to privatize even the most overwhelmingly popular federal social programs, particularly Medicare and Social Security. Social Security is the largest anti-poverty program in the country and is the most important source of income for seniors; without it, over 25 million more people would be in poverty (Banerjee and Zipperer 2022). More than 64 million people rely on Medicare coverage for their health insurance coverage (CMS 2022). From Texas President George W. Bush’s plan to privatize Social Security in 2005, to Florida Senator Rick Scott’s plan to phase out all federal social programs in 2022 (Everett 2022), Southern Republicans have consistently been among the most vocal supporters of privatization (Scott 2022).

Privatization is often touted as a solution to bureaucratic red tape or cutting “wasteful” government spending, but in practice, it can mean cutting the experienced public workforce who administer complicated government programs. This can result in prolonged delays, more people wrongly denied benefits, and ultimately worse outcomes for people who need the benefits most. For instance, when Texas outsourced its SNAP eligibility determinations to a for-profit company in 2006, thousands of people were unable to apply or were given incorrect information and many were wrongly denied benefits. Public-sector staff were then forced to fix mistakes, and eligible SNAP participants were subject to long delays to receive benefits (Sanders and Mast 2024).

Privatization across criminal legal system threatens progress to undo mass incarceration

Since the 1990s, the U.S. criminal legal system has become increasingly privatized as private, for-profit companies have taken over many aspects of correctional control. Private prisons—prisons owned and run by private companies—are the most visible form of privatization. The use of private, for-profit prisons to incarcerate people convicted of crimes and detain immigrants grew significantly in the first decade of the 21st century but has declined nationwide since 2010. Nevertheless, as of 2022, approximately 91,000 people nationwide are currently incarcerated in private prisons, representing 8% of the total prison population. Across the country, 27 states and the federal government incarcerate people in private prisons, and states vary significantly in their use of private prisons (Budd 2024). Southern states have historically incarcerated more people in private prisons than any other region (Geiger 2017) and have increased their usage of private prisons at a time when other states are moving in the other direction. In Florida, Georgia, and Tennessee, the use of private prisons has increased considerably (by an average of 131% across those three states since 2000), and these states confine 15% or more of their incarcerated population in prisons motivated by profit (Budd 2024).

The private sector’s quest to extract profits from the U.S. prison system and those under correctional control within and outside prison is not limited to the small share of privately run prisons. Instead, the entire carceral system, which spans public and privately run facilities and services, has become increasingly privatized over the past several decades. Though this phenomenon is nationwide, incarcerated people in the South may be most heavily impacted. Within public and private prisons, private companies are granted contracts to provide food, health services, telecommunications services, and commissary functions. In turn, the private company earns a profit by marking up the price of goods and services, and the prison receives millions of dollars in revenue in the form of commissions (Katzenstein, Bennett, and Swanson 2020).

This system of “prison retailing” is supposed to be reinvested into the prison to pay for programs that benefit the incarcerated population, but many times these funds are improperly diverted to other purposes (Nam-Sonenstein 2024). The prices of privately administered goods and services in prisons and jails vary widely by state, but Southern prisons charge some of the most exorbitant rates for basic food items like instant ramen noodles, fans to keep cool in prisons that lack air conditioning, and even water (Weill-Greenberg and Corey 2024). At the same time, as shown in Figure H, incarcerated people in the South who work for the benefit of their prisons and prison owners are paid the lowest wages of any region—if they are paid at all—putting these heavily marked-up items even further out of reach for incarcerated people in the South (Mast 2025).

Figure H

Privatization is also pervasive in alternative forms of correctional control. As the prison population declines modestly, both in private and public facilities, the corrections industry has shifted its focus to extracting profit from community supervision, which includes pre-trial supervision, probation, and parole. Of the 5.5 million people under some form of correctional control, over half are on probation (a million more than those incarcerated in correctional facilities) (Wang 2023). Privatized correctional control and supervision originated in the South—Florida implemented private probation in 1975, followed by Tennessee in 1989 and Georgia shortly thereafter (Zvonkovich, Haynes, and Ruback 2022)—and persists there more than any other region (Ramachandra and Darehshori 2018). Today, of the 12 states that rely on private, for-profit companies for misdemeanor probation services, seven are Southern states (Huebner and Shannon 2022). Georgia law prohibits the state from supervising misdemeanor probations and requires that these services be contracted to local or private entities. More people are on probation in Georgia than any other state, and 80% of the state’s courts use private probation (Khalfani 2022). As with other privatized services, there is little transparency around the bidding process for these contracts, and private probation companies are not required to make financial disclosures to the state. Research suggests that private probation companies charge higher fees than state-run probation (Shannon et al. 2020). Numerous lawsuits across several states allege private probation companies charge inappropriate fees, violate probationers’ 14th Amendment rights, and engage in racketeering.11 

Though the use of private prisons has declined, President Trump’s anti-immigrant agenda has reinvigorated the market for private prison operators, especially in border states in the South. Private prisons are slated to make billions from new contracts to detain undocumented immigrants while they await immigration proceedings or deportation. The companies plan to make use of vacant detention facilities, some of which had been closed after reports of unsanitary conditions, overcrowding, and detainee deaths (Hurwitz 2025). The CEO of CoreCivic (formerly Corrections Corporation of America), the second largest private corrections company in the U.S., called it “one of the most exciting periods in my career” (Berzon, McCann, and Aleaziz 2025). Most immigration detention facilities are run by private prison operators and are clustered along the Southwest border and the gulf coast (Louisiana, Mississippi, Alabama, and Florida).

Immigrant detention as a profit-seeking enterprise is not limited to privately owned prisons. For example, in Louisiana, which is now being dubbed “detention center alley” (a play on “cancer alley”12) because of its significant role in immigrant detention (Maschke 2025), a detention center may be publicly owned and then privately operated (Hefferman 2025). In small localities across the country, jail bed rentals for immigrant detainees provide a large—if perverse—source of revenue. In Louisiana, Immigrations and Customs Enforcement pays localities $74 per day to rent beds in their facilities, nearly three times what the state prison system pays local sheriffs. And in one economically distressed North Carolina county, a newly built jail earned $2 million in the first 18 months for holding immigrants for the federal government, which comprised two-thirds of its detainees (Eisen and Subramanian 2022).

Privatization masks the true costs of mass incarceration by shifting many of the system’s costs to those under correctional control while creating incentives for the public and private sector to expand the system, either as a source of private or public revenue. But the revenue produced through criminal legal system privatization exacts high costs on communities, particularly on low-income Black and brown people who are disproportionately ensnared in it. Given the racist roots of the Southern economic development model, it is not surprising that these dynamics have manifested so acutely in the South.

A thriving South requires a new economic development model

The South is home to the nation’s weakest social safety net, the lowest wages, the most anti-worker policies, and the most regressive systems for raising revenue to pay for essential goods and services. As a result, the region suffers from high rates of poverty and food insecurity and poor health outcomes, and workers and their families struggle to achieve a basic standard of living. These outcomes are by design, the consequences of an economic development model that prioritizes the wealthy and corporations at the expense of workers and their families, and fosters precarity as a means of maintaining racial and class-based hierarchies.

W.E.B. DuBois famously said “as the South goes, so goes the nation.” This adage very much applies to the Southern economic development model, as conservative state lawmakers across the country have sought to duplicate the Southern policy agenda in their states. Now, this model has found a home in the Trump administration, which has taken every opportunity to prioritize the interests of the wealthy and corporations at the expense of working people and their families.

The Rooted in Racism series has shown across a wide range of dimensions that the Southern economic model fundamentally does not serve workers and their families. It does not lead to stronger growth; it does not lead to greater or more widespread prosperity; it does not lead to better health or educational outcomes or greater economic mobility.

But it does not have to be this way. Because the South’s poverty, precarity, and economic underperformance are the consequences of intentional policy choices, they can be undone by different policy choices. The racism and anti-worker sentiments that have influenced economic policymaking in the South for generations must be uprooted and replaced by a new economic model centered on empowering and investing in workers, families, and communities. There are proven strategies that lawmakers can take—proposals for which advocates have been fighting for years—to build a South where workers are empowered and families are supported to not just survive but thrive. It is time to retire the Southern economic development model and replace it with a model that serves everyone.

Appendix

Appendix Table 1

Notes

1. See Economic Policy Institute, “Rooted in Racism and Economic Exploitation” (web page), https://www.epi.org/rooted-in-racism.

2. The author acknowledges that these data are now over a decade old. Estimating the incidence of wage theft is extremely challenging, especially because victims often don’t know they’ve been cheated and even when they do, they often don’t have a paper trail. Consequently, there are few studies that have attempted to quantify the incidence and value of wage theft. Because the minimum wage has risen in Florida since this study, it’s quite likely that the incidence of minimum wage violations and value of that theft is higher than it was when these data were produced.

3. As of May 2025, there were an estimated 810 Wage and Hour Division investigators for 165 million workers, roughly one investigator per every 270,000 workers (165 million / 611). This was prior to layoffs and mass resignations at DOL induced by the Trump administration’s attacks on civil servants. As a result, there are now likely even fewer than 611 wage and hour investigators at the department.

4. See Frisvold and Jung 2018; Lavender and Johnston 2024; and Leung and Mas 2016.

5. Author’s calculation using Bureau of Labor Statistics Occupational Employment and Wage Statistics and Local Area Unemployment Statistics, March 2024.

6. See Florida HB 47, Kentucky HB 460, and West Vest Virgina HB 2605, HB 2730, and HB 2731.

7. Author’s calculation using U.S. Census Bureau 2023 ACS 1-Year Median Household Income in the Past 12 Months in Tennessee, by race/ethnicity (tables B19013B, B19013D, B19013H, B19013I, S1903).

8. Although the federal money explicitly could not be used to finance tax cuts, the fungibility of the resources meant determined conservative state lawmakers were able to find ways to shift resources such that they could cut taxes and then use federal funds to fill the revenue gap.

9. The five states and their rank regarding their reliance on non-tax revenue are: Alabama (3), Florida (7), Mississippi (8), Oklahoma (10), and South Carolina (4).

10. Convict leasing was a system for preserving forced labor after the abolition of slavery in the U.S. Southern states criminalized Black people for trivial “offenses” (such as loitering, breaking curfew, or failing to show proof of employment) and then leased them to private employers to work without pay to do dangerous, sometimes deadly, work under threat of punishment.

11. See recent news from private probation lawsuits in Georgia, Tennessee, and Alabama.

12. ”Cancer Alley” refers to the communities along the banks of the Mississippi River between New Orleans and Baton Rouge, Louisiana, where residents suffer from high rates of cancer and other health issues because of air pollution caused by the fossil fuel and petrochemical industries. These harms disproportionately impact Black residents, whose communities are commonly targeted for industrial development.

References

Acosta, Sonya, and Erik Gartland. 2021. Families Wait Years for Housing Vouchers Due to Inadequate Funding: Expanding Program Would Reduce Hardship, Improve Equity. Center on Budget and Policy Priorities, July 2021.

Administration for Children and Families (ACF). 2022. American Rescue Plan Child Care Stabilization Program Fact Sheet. U.S. Department of Health and Human Services.

Akesson, Jesper, Robert W. Hahn, Robert D. Metcalfe, and Itzhak Rasooly. 2022. “Race and Redistribution in the United States: An Experimental Analysis.” National Bureau of Economic Research Working Paper no. 30426, September 2022. https://doi.org/10.3386/w30426.

American Civil Liberties Union and the University of Chicago Law School Global Human Rights Clinic (ACLU and GHRC). 2022. Captive Labor Exploitation of Incarcerated Workers, June 2022.

American Public Transportation Association (APTA). n.d. “Public Transportation Facts.” Accessed May 2025.

Annie E. Casey Foundation. 2023. “Children in Single-Parent families in United States.” Kids Count Data Center (custom report, percent by state), 2023.

Ash, Jordan. 2025. Private Equity Multi-Family Housing Tracker. Private Equity Stakeholder Project, April 2025.

Austin, Algernon. 2017. To Move Is to Thrive: Public Transit and Economic Opportunity for People of Color. Demos, November 2017.

Azevedo-McCaffrey, Diana, and Ali Safawi. 2022. To Promote Equity, States Should Invest More TANF Dollars in Basic Assistance. Center on Budget and Policy Priorities, January 2022.

Azevedo McCaffrey, Diana, and Tonanzhit Aguas. 2025. Continued Increases in TANF Benefit Levels Are Critical to Helping Families Meet Their Needs and Thrive. Center on Budget and Policy Priorities, February 2025.

Banerjee, Asha. 2022. “Abortion Rights Are Economic Rights: Overturning Roe V. Wade Would Be an Economic Catastrophe for Millions of Women.” Working Economics Blog (Economic Policy Institute), May 18, 2022.

Banerjee, Asha, and Ben Zipperer. 2022. “Pandemic Safety Net Programs Kept Millions Out of Poverty in 2021, New Census Data Show.” Working Economics Blog (Economic Policy Institute), September 13, 2022.

Barnes, Jake, Janice Fine, Daniel J. Galvin, Jenn Round, and Hana Shepherd. 2025. To Help U.S. Workers, We Need Labor Standards Enforcement, Not Mass Deportations. Workplace Justice Lab at Rutgers University, May 2025.

Bellis, Rayla, Beth Osborne, and Stephen Lee Davis. 2019. Repair Priorities. Transportation for America, May 2019.

Bergal, Jenni. 2020. “States Raid Fund Meant for Needy Families to Pay for Other Programs.” Stateline, July 24, 2020.

Bergh, Katie. 2025. Millions of Low-Income Households Would Lose Food Aid Under Proposed House Republican SNAP Cuts. Center on Budget and Policy Priorities, February 2025.

Berzon, Alexandra, Allison McCann, and Hamed Aleaziz. 2025. “Private Prisons Are Ramping Up Detention of Immigrants and Cashing In.” New York Times, March 7, 2025.

Black, Rachel, and Aleta Sprague. 2017. Becoming Visible: Race, Economic Security, and Political Voice in Jackson, Mississippi. New America, November 2017.

Blair, Hunter, David Cooper, Julia Wolfe, and Jaimie Worker. 2020. Preempting Progress: State Interference in Local Policymaking Prevents People of Color, Women, and Low-Income Workers from Making Ends Meet in the South. Economic Policy Institute, September 2020. 

Blake, Jessica. 2024. “Red States Back Trump’s Plan to Abolish Education Department.” Inside Higher Ed, November 25, 2024.

Boddupalli, Aravind, and Livia Mucciolo. 2022. Following the Money on Fines and Fees: The Misaligned Fiscal Incentives in Speeding Tickets. Urban Institute, January 2022.

Bowden, Victoria, Diana Azevedo-McCaffrey, and Maria Manansala. 2025. “AFDC and TANF Caseload and Poverty Data.” Center on Budget and Policy Priorities, April 2025.

Broaddus, Matt. 2017. Affordable Care Act’s Medicaid Expansion Benefits Hospitals, Particularly in Rural America. Center on Budget and Policy Priorities, June 2017.

Broaddus, Matt, and Aviva Aron-Dine. 2019. Medicaid Expansion Has Saved at Least 19,000 Lives, New Research Finds. Center on Budget and Policy Priorities, November 2019.

Budd, Kristen M. 2024. Private Prisons in the United States. The Sentencing Project, February 2024.

Buettgens, Matthew, and Urmi Ramchandani. 2022. 3.7 Million People Would Gain Health Coverage in 2023 if the Remaining 12 States Were to Expand Medicaid Eligibility. Urban Institute, August 2022.

Bureau of Labor Statistics (BLS). 2023. “Occupational Employment and Wage Statistics: 29-0000 Healthcare Practitioners and Technical Occupations (Major Group).” May 2023.

Bureau of Labor Statistics (BLS). 2024a. “Consumer Expenditures—2023: Economic News Release.” U.S. Department of Labor, September 2024.

Bureau of Labor Statistics (BLS). 2024b. National Census of Fatal Occupational Injuries in 2023. U.S. Department of Labor, December 2024.

Bureau of Transportation Statistics (BTS). 2023. Access to Intercity Transportation in Rural Areas. Department of Transportation, September 2023.

Butkus, Neva. 2024. State Child Tax Credits Boosted Financial Security for Families and Children in 2024. Institute on Taxation and Economic Policy, September 2024.

Cafcas, Thomas, Kasia Tarczynska, Philip Mattera, and Greg LeRoy. 2014. Memphis Blues: How Corporate Property Tax Breaks and Stadium Subsidies Are Sapping the City’s Fiscal Strength. Good Jobs First, June 2014.

Center on Budget and Policy Priorities (CBPP). 2021. ACA Survives Legal Challenge, Protecting Coverage for Tens of Millions. July 2021.

Centers for Medicare & Medicaid Services (CMS). 2022. “CMS Program Data – Populations: Medicare (2020).” CMS FastFacts website, August 2022. 

Child Care Aware of America (CCAoA). 2025. Child Care in America: 2024 Price and Supply. Child Care Aware of America, May 2025.

Childers, Chandra. 2023. Rooted in Racism and Economic Exploitation: The Failed Southern Economic Development Model. Economic Policy Institute, October 2023.

Childers, Chandra. 2024a. The Evolution of the Southern Economic Development Strategy: Rooted in Racism and Economic Exploitation Part One. Economic Policy Institute, May 2024.

Childers, Chandra. 2024b. Breaking Down the South’s Economic Underperformance: Rooted in Racism and Economic Exploitation Part Two. Economic Policy Institute, June 2024.

Childers, Chandra. 2024c. Southern Policymakers Leave Workers with Lower Wages and a Fraying Safety Net: Rooted in Racism and Economic Exploitation Part Three. Economic Policy Institute, July 2024.

Childers, Chandra. 2024d. Southern Economic Policies Undermine Job Quality for Auto Workers: Rooted in Racism and Economic Exploitation: Spotlight. Economic Policy Institute, September 2024.

Childers, Chandra. 2025. The Ongoing Influence of Slavery and Jim Crow Means High Poverty Rates and Low Economic Mobility in the South: Rooted in Racism and Economic Exploitation: Part Four. Economic Policy Institute, April 2025.

Childers, Chandra, Nina Mast, Daniel Perez, and Sebastian Martinez Hickey. 2023–2025. Rooted in Racism and Economic Exploitation. Economic Policy Institute.

Cohen, Rachel. 2023. “One State Just Became a National Leader on Child Care. Here’s How They Did It.” Vox, May 22, 2023.

Coleman-Jensen, Alisha, Matthew P. Rabbitt, Christian A. Gregory, and Anita Singh. 2021. Household Food Security in the United States in 2020. U.S. Department of Agriculture Economic Research Service report no. 298, February 2021.

Cooper, David, and Teresa Kroeger. 2017. Employers Steal Billions from Workers’ Paychecks Each Year. Economic Policy Institute, May 2017.

Costa, Daniel, and Philip Martin. 2023. Record-Low Number of Federal Wage and Hour Investigations of Farms in 2022. Economic Policy Institute, August 2023.

Crouse, Gilbert. 2024. Welfare Indicators and Risk Factors: 23rd Report to Congress. U.S. Department of Health and Human Services, March 2024.

Cunnyngham, Karen. 2025. Reaching Those in Need: Estimates of State Supplemental Nutrition Assistance Program Participation Rates in 2022. United States Department of Agriculture Food and Nutrition Service, February 2025.

Das, Kamolika. 2022. Creating Racially And Economically Equitable Tax Policy In The South. Institute on Taxation and Economic Policy, June 2022.

Davis, Aidan, and Miles Trinidad. 2023. “State Lawmakers Should Break the 2023 Tax Cut Fever Before It’s Too Late.” Just Taxes Blog (Institute on Taxation and Economic Policy), January 18, 2023.

Davis, Carl, and Marco Guzman. 2021. State Income Taxes and Racial Equity: Narrowing Racial Income and Wealth Gaps with State Personal Income Taxes. Institute on Taxation and Economic Policy, October 2021.

Davis, Carl, and Brakeyshia Samms. 2023. Preventing an Overload: How Property Tax Circuit Breakers Promote Housing Affordability. Institute on Taxation and Economic Policy, May 2023.

DeMillo, Andrew. 2024. “Arkansas Governor Signs Income, Property Tax Cuts Into Law.” Associated Press, June 19, 2024.

DeSantis, Ron. 2025a. “Governor Ron DeSantis Announces the Focus on Fiscal Responsibility 2025–2026 Budget.” Executive Office of Governor Ron DeSantis (Press Release), February 3, 2025.

DeSantis, Ron. 2025b. “Ron DeSantis: Good Riddance to the U.S. Education Department.” Wall Street Journal, March 18, 2025.

Dey, Sneha. 2023. “Some Child Care Providers Expect to Shutter After Texas Lawmakers Leave $2.3 Billion Proposal off Final Budget.” Texas Tribune, August 4, 2023.

DiTomaso, Nancy. 2024. “The Invention of Race and the Persistence of Racial Hierarchy: White Privilege, White Supremacy, and White Colorblindness.” Social and Personality Psychology Compass 18, no. 4 (December).

Dollard, Norín, and Mary McKillip. 2025. Florida Continues to Drain Much-Needed Funds Away from Public Schools to Private and Home-School Students. Florida Policy Institute, January 2025.

Economic Policy Institute (EPI). 2025a. Child Care Costs in the United States. Updated February 2025.

Economic Policy Institute (EPI). 2025b. Minimum Wage Tracker. Updated February 2025.

Edison, Jaden. 2025. “Private School Vouchers Are Now Law in Texas. Here’s How They Will Work.” Texas Tribune, May 3, 2025.

Einhorn, Robin. 2006. “Tax Aversion and the Legacy of Slavery.” Chicago, Ill.: Univ. of Chicago Press., 2006.

Eisen, Lauren-Brooke, and Ram Subramanian. 2022. “A Market for Holding Humans: The Correctional and Detention Bed Trade.” Brennen Center for Justice, August 8, 2022.

Environmental Protection Agency (EPA). 2022. “Fast Facts on Transportation Greenhouse Gas Emissions: 2022 U.S. GHG Emissions by Sector.” U.S. EPA Inventory of U.S. Greenhouse Gas Emissions and Sinks 1990–2022.

Eviction Lab. 2021. “COVID-19 Housing Policy Scorecard.” Princeton University Eviction Lab. Last updated June 30, 2021.

Eviction Lab. 2025. “Top Evicting Large Cities in the United States.” Princeton University Eviction Lab. Eviction Filings by Location. Last updated April 2025.

Fines and Fees Justice Center (FFJC). 2024. “2023 State Legislative Round-Up: Fines and Fees Reform Across the Country.” January 29, 2024.

Florida Policy Institute. 2022. Ensuring Enforcement of Wage and Hour Laws for All Working Floridians by Establishing a Department of Labor. January 2022.

Floyd, Ife, Ladonna Pavetti, Laura Meyer, Ali Safawi, Liz Schott, Evelyn Bellew, and Abigail Magnus. 2021. TANF Policies Reflect Racist Legacy of Cash Assistance: Reimagined Program Should Center Black Mothers. Center on Budget and Policy Priorities, August 2021.

Floyd, Ife, and Ladonna Pavetti. 2022. Improvements in TANF Cash Benefits Needed to Undo the Legacy of Historical Racism. Center on Budget and Policy Priorities, January 2022.

Frisvold, David E., and Younsoo Jung. 2018. “The Impact of Expanding Medicaid on Health Insurance Coverage and Labor Market Outcomes.” International Journal of Health Economics and Management 18, no. 2 (2018): 99–121.

Galvin, Daniel. 2016. “Deterring Wage Theft: Alt-Labor, State Politics, and the Policy Determinants of Minimum Wage Compliance.” Perspectives on Politics 14, no. 2 (June): 324–350. https://doi.org/10.1017/S1537592716000050.

Galvin, Daniel J., Jake Barnes, Janice Fine, and Jenn Round. 2023. Persistent and Widespread Wage Theft, Weak Enforcement Harming Low-Income Texans. Rutgers Workplace Justice Lab and Workers Defense Project, August 2023.

Gartland, Erik. 2022. Relief Measures Reduced Hardship for Renters During Pandemic, but Many Still Struggle to Pay Rent in Every State. Center on Budget and Policy Priorities, June 2022.

Geiger, A.W. 2017. U.S. Private Prison Population Has Declined in Recent Years. Pew Research Center, April 2017.

Georgia State University Law Review (GSU). 2012. “Labor and Industrial Relations: Minimum Wages; Increase Hourly Amount; Provide for Exceptions; Provide for Related Matters.” Georgia State University Law Review 18.

Gizis, Anya. 2025. The Cost of Corporate Tax Breaks to South Carolina Schools. Good Jobs First, February 2025.

Good Jobs First (GJF). 2022a. “Subsidy Tracker Megadeals (2022)” (web page). Accessed May 2025.

Good Jobs First (GJF). 2022b. The Revenue Impact of Corporate Tax Incentives: Louisiana GASB 77 Findings (fact sheet). April 2022.

Good Jobs First (GJF). 2022c. The Revenue Impact of Corporate Tax Incentives: Tennessee GASB 77 Findings (fact sheet). April 2022.

Gould, Elise, and Will Kimball. 2015. “Right-to-Work” States Still Have Lower Wages. Economic Policy Institute, April 2015. 

Gott, Molly. 2018. A Guide to the Corporations that Are De-Funding Public Education and Opposing Striking Teachers. LittleSis, May 2018.

Harker, Laura, and Breanna Sharer. 2024. Medicaid Expansion: Frequently Asked Questions. Center on Budget and Policy Priorities, June 2024.

Harvard Joint Center for Housing Studies (JCHS). 2024a. America’s Rental Housing 2024. Harvard University.

Harvard Joint Center for Housing Studies (JCHS). 2024b. “Renter Cost-Burden Shares Remain High” (view full data set). Harvard University.

Harvey, David. 1989. “From Managerialism to Entrepreneurialism: The Transformation in Urban Governance in Late Capitalism.” Geografiska Annaler: Series B, Human Geography 71, no. 1: 3–17. https://doi.org/10.1080/04353684.1989.11879583.

Hefferman, Shannon. 2025. “‘Perverse’ Incentives: How Local Governments Might Cash In on Trump’s Migrant Detention.” The Marshall Project, January 4, 2025.

Henningson, Samantha. 2025. Getting Transportation Right (scorecard). National Resources Defense Council, March 2025.

Hernández, Kristian. 2022. “More States Are Forgoing Extra Federal Food Aid.” Governing, July 22, 2022.

Higham, Aliss. 2024. “SNAP Benefits Under Threat in These 4 States.” Newsweek, March 11, 2024.

Holland, Lynn, and Patrick Schumacher. 2024. Giving or Getting?: New York’s Balance of Payments with the Federal Government. Rockefeller Institute of Government, July 2024.

Huebner, Beth M., and Sarah K.S. Shannon. 2022. “Private Probation Costs, Compliance, and the Proportionality of Punishment: Evidence from Georgia and Missouri.” RSF: The Russell Sage Foundation Journal of the Social Sciences 8, no. 1: 179–199. https://doi.org/10.7758/RSF.2022.8.1.08.

Hurwitz, Sophie. 2025. “Private Prison Companies Set to Make Billions Reopening Jails for ICE.” Mother Jones, March 6, 2025.

Institute on Taxation and Economic Policy (ITEP). 2024. Who Pays? A Distributional Analysis of the Tax Systems in All 50 States (7th Edition). January 2024.

Kaiser Family Foundation (KFF). 2012. States’ Positions in the Affordable Care Act Case at the Supreme Court.

Kaiser Family Foundation (KFF). 2025. Status of State Medicaid Expansion Decisions. May 2025.

Katzenstein, Mary Fainsod, Noah Bennett, and Jacob Swanson. 2020. “Alabama Is US: Concealed Fees in Jails and Prisons.” UCLA Criminal Justice Law Review 4, no: 1: 259–267.

Keating, Larry. 2001. Atlanta: Race, Class, and Urban Expansion. Philadelphia, PA: Temple Univ. Press, 2001.

Kemp, Brian. 2024. “Gov. Kemp Announces Details for $1.5B Transportation Infrastructure Investment.” Office of the Governor of Georgia, July 18, 2024.

Kesler, Alex. 2025. “Gov. McMaster Signs Two Education Bills into Law.” ABC 15 News, May 8, 2025.

Khalfani, Ray. 2022. Unjust Revenue from an Imbalanced Criminal Legal System: How Georgia’s Fines and Fees Worsen Racial Inequity. Georgia Budget and Policy Institute, December 2021.

King, Patrick. 2023. “Georgia Is Number 1 for Business and Number 35 for Transportation.” National Resources Defense Council, November 8, 2023.

Ku, Leighton, and Erin Brantley. 2021. The Economic and Employment Effects of Medicaid Expansion Under the American Rescue Plan. The Commonwealth Fund, May 2021.

Lavender, Makayla, and Emily Johnston. 2024. “Labor Force Effects of Medicaid and Marketplace Expansions: Variation by Gender, Parental Status, and Household Structure.” Southern Economic Journal 90, no. 4: 949–1001. https://doi.org/10.1002/soej.12678.

Leung, Pauline, and Alexandre Mas. 2016. “Employment Effects of the ACA Medicaid Expansions.” National Bureau of Economic Research Working Paper no. 22540, August 2016.

Levenson, Eric, and Dianne Gallagher. 2022. “What We Know About Brett Favre and the Mississippi Welfare Scandal.” CNN, October 22, 2022.

Lindrooth, Richard C., Marcelo C. Perraillon, Rose Y. Hardy, and Gregory J. Tung. 2018. “Understanding The Relationship Between Medicaid Expansions and Hospital Closures.” Health Affairs 37, no. 1 (January): 111–120. https://doi.org/10.1377/hlthaff.2017.0976.

Lyman, Bryan. 2017. “A Permanent Wound: How the Slave Tax Warped Alabama Finances.” Montgomery Advertiser, February 4, 2017.

Mangundayao, Ihna, Celine McNicholas, Margaret Poydock, and Ali Sait. 2021. More Than $3 Billion in Stolen Wages Recovered for Workers Between 2017 and 2020. Economic Policy Institute, December 2021.

Maschke, Alena. 2025. “‘Detention Center Alley’ — Louisiana Rises to Prominence as Hub for Immigrant Detention.” WWNO New Orleans Public Radio, April 14, 2025.

Mast, Nina. 2023. State and Local Experience Proves School Vouchers Are a Failed Policy That Must Be Opposed. Economic Policy Institute, April 2023.

Mast, Nina. 2024. Tipping Is a Racist Relic and a Modern Tool of Economic Oppression in the South. Economic Policy Institute, June 2024.

Mast, Nina. 2025. Forced Prison Labor in the “Land of the Free”: Rooted in Racism and Economic Exploitation: Spotlight. Economic Policy Institute, January 2025.

Meckler, Laura, and Michelle Boorstein. 2024. “Billions In Taxpayer Dollars Now Go to Religious Schools Via Vouchers.” Washington Post, June 3, 2024.

Melson-Silimon, Arturia, Briana N. Spivey, and Allison L. Skinner-Dorkenoo. 2023. “The Construction of Racial Stereotypes and How They Serve as Racial Propaganda.” Social and Personality Psychology Compass 18, no. 1 (August).

Menendez, Matthew, Michael F. Crowley, Lauren-Brooke Eisen, and Noah Atchison. 2019. The Steep Costs of Criminal Justice Fees and Fines: A Fiscal Analysis of Three States and Ten Counties. Brennan Center for Justice, November 2019.

Morrissey, Monique. 2020. The War Against the Postal Service: Postal Services Should Be Expanded for the Public Good, Not Diminished by Special Interests. Economic Policy Institute, December 2020.

Morrissey, Monique, and Jennifer Sherer. 2022. Unions Can Reduce the Public-Sector Pay Gap: Collective Bargaining Rights and Local Government Workers. Economic Policy Institute, March 2022.

Nam-Sonenstein, Brian. 2024. Shadow Budgets: How Mass Incarceration Steals from the Poor to Give to the Prison. Prison Policy Initiative, May 2024.

National Equity Atlas. 2019. “Commute Time: All Workers Should Have Reasonable Commutes.” Accessed January 6, 2023.

National Low Income Housing Coalition (NLIHC). 2022. “HFSC Holds Hearing on Private Equity Firms’ Impact on Housing Affordability” (memo to members). July 5, 2022.

Office of the Assistant Secretary for Planning and Evaluation (ASPE). n.d. “Aid to Families with Dependent Children (AFDC) and Temporary Assistance for Needy Families (TANF) – Overview.” Accessed March 2023.

Ortaliza, Jared, Justin Lo, and Cynthia Cox. 2025. “Enrollment Growth in the ACA Marketplaces.” Kaiser Family Foundation, April 2, 2025.

Partnership for Southern Equity (PSE). 2017. Opportunity Deferred: Race, Transportation, and the Future of Metropolitan Atlanta. October 2017.

Pérez, Allyson, and Crystal Fitzsimons. 2022. “Congress Passes Bipartisan, Bicameral Keep Kids Fed Act.” Food Research Action Center, June 24, 2022.

Perez Jr., Juan, and Josh Gerstein. 2025. “Supreme Court Appears Ready to Bless the Country’s First Public Religious Charter School.” Politico, April 30, 2025.

Perry, Mitch. 2025. “At DOGE Presser, Desantis Again Floats Concept of Ending Property Taxes in Florida.” Florida Phoenix, February 24, 2025.

Pierson, Emma, Camelia Simoiu, Jan Overgoor, Sam Corbett-Davies, Daniel Jenson, Amy Shoemaker, Vignesh Ramachandran, Phoebe Barghouty, Cheryl Phillips, Ravi Shroff, and Sharad Goel. 2020. “A Large-Scale Analysis of Racial Disparities in Police Stops Across the United States.” Nature Human Behavior 4 (July): 736–745. https://doi.org/10.1038/s41562-020-0858-1.

Poydock, Margaret, and Jiayi (Sonia) Zhang. 2024. More Than $1.5 Billion in Stolen Wages Recovered for Workers Between 2021 and 2023. Economic Policy Institute, December 2024.

Public Funds for Public Schools (PFPS). 2025. “PFPS Private School Voucher Bill Tracker.” Accessed May 20, 2025.

Rabbitt, Matthew P., Madeline Reed-Jones, Laura J. Hales, and Michael P. Burke. 2024. Household Food Security in the United States in 2023. U.S. Department of Agriculture Economic Research Service, September 2024.

Raifman, Matthew A., and Ernani F. Choma. 2022. “Disparities in Activity and Traffic Fatalities by Race/Ethnicity.” American Journal or Preventive Medicine 63, no. 2 (August): 160−167. https://doi.org/10.1016/j.amepre.2022.03.012.

Ramachandra, Komala, and Sarah Darehshori. 2018. “Set Up to Fail”: The Impact of Offender-Funded Private Probation on the Poor. Human Rights Watch, February 2018.

Rohrer, Gray. 2025. “Some Workers Could Get Paid Less Than Minimum Wage Under Bill Moving in Florida Legislature.” Tallahassee Democrat, March 12, 2025.

Ross, Kyle. 2025. “How the Trump Administration Could Leave Families Hungry: Potential Cuts to SNAP in 2025 and Beyond.” Center for American Progress, February 3, 2025.

Saiger, Aaron. 2025. “After U.S. Supreme Court Ruling, It’s Back to States’ Laboratories for Religious Charter Schools.” State Court Report, May 29, 2025.

Salerno, Corrigan. 2024. Fueling the Crisis: Climate Consequences of the 2021 Infrastructure Law. Transportation for America, November 2024.

Sánchez, Thomas W., Rich Stolz, and Jacinta S. Ma. 2003. Moving to Equity: Addressing Inequitable Effects of Transportation Policies on Minorities. The Civil Rights Project at Harvard University.

Sanders, Samantha, and Nina Mast. 2024. How Republicans in Congress Are Trying to Quietly Privatize SNAP Through the Back Door of Disaster Relief. Economic Policy Institute, November 26, 2024.

Sanders, Sarah Huckabee. 2023. Sanders Delivers Inaugural Address (press release). Office of Arkansas Governor Sarah Huckabee Sanders, January 2023.

Sanger-Katz, Margot. 2023. “Obamacare Sign-Ups Top 16 Million for 2023, Setting Another Record.” New York Times, January 25, 2023.

Schaul, Kevin, and Jonathan O’Connell. 2022. “Investors Bought a Record Share of Homes in 2021. See Where.” Washington Post, February 16, 2022.

School Nutrition Association. 2025. SY 2024/25 School Nutrition Trends Report, January 2025.

Scott, Rick. 2022. “An 11-Point Plan to Rescue America: What Americans Must Do to Save This Country.” U.S. Senator Rick Scott (FL).

Sczesny, Matt. 2025. “Could Ending Property Taxes in Florida ‘Dismantle’ Public School System?” WPTV, March 17, 2025.

Shannon, Sarah, Beth M. Huebner, Alexes Harris, Karin Martin, Mary Patillo, Becky Pettit, Bryan Sykes, and Christopher Uggen. 2020. “The Broad Scope and Variation of Monetary Sanctions: Evidence from Eight States.” UCLA Criminal Justice Law Review 4, no. 1.

Sherer, Jennifer. 2024. “The South’s Economic Model Is ‘Under Attack’. That’s a Good Thing [Opinion].” Newsweek, March 26, 2024.

Shrivastava, Aditi, and Gina Azito Thompson. 2022. Policy Brief: Cash Assistance Should Reach Millions More Families to Lessen Hardship: Access to TANF Hits Lowest Point amid Precarious Economic Conditions. Center on Budget and Policy Priorities, February 2022.

Sonka, Joe. 2025. “Kentucky Bill Making It Easier to Cut State Taxes Heads to Governor. Here’s How It Works.” Louisville Public Media, March 17, 2025.

Southern Education Foundation (SEF). n.d. “A History of Private Schools and Race in the American South.”

Strauss, Valerie. 2022. “How Florida Gov. DeSantis Is Trying to Destroy Public Education.” Washington Post, April 27, 2022.

Suitts, Steve. 2019. “Segregationists, Libertarians, and the Modern ‘School Choice’ Movement.” Southern Spaces, June 4, 2019.

Sullivan, Terrance. 2025. “The Long Road to Dismantling the Department of Education: From the Southern Manifesto to Project 2025.” Progressive Magazine, April 14, 2025.

Tarczynska, Kasia. 2022. 2022: A Mega-Year for Megadeals! Good Jobs First, December 2022.

Tarczynska, Kasia, Christine Wen, and Katie Furtado. 2022. Financial Exposure Rating the States on Economic Development Transparency. Good Jobs First, April 2022.

Tax Policy Center (TPC). 2023a. “Rankings of State and Local per Capita General Revenue, 2021” [data table]. State Revenues and Expenditures, July 2023.

Tax Policy Center (TPC). 2023b. “State and Local Direct General Expenditures, per Capita, FY 2021” [data table]. July 2023.

Tax Policy Center (TPC). 2024. “How Do State and Local Revenues from Fines, Fees, and Forfeitures Work?” In The Briefing Book, January 2024.

Tennessee General Assembly. 2025. “HB 1096: Economic and Community Development.” Signed by Governor, April 3, 2025.

Tharpe, Wesley. 2023. States’ Recent Tax-Cut Spree Creates Big Risks for Families and Communities. Center on Budget and Policy Priorities, November 2023.

TRIP. 2022. Funding America’s Transportation System. March 2022.

UNC Sheps. 2023. “Rural Hospital Closures 2005-Current” (Excel file). Cecil G. Sheps Center for Health Services Research at The University of North Carolina at Chapel Hill, last updated January 2023.

Urban Institute. 2020. The Unequal Commute: Examining Inequities in Four Metro Areas’ Transportation Systems. October 2020.

Urban Institute. 2022. “State and Local Public Welfare Expenditures: Per Capita Direct General Expenditures, Fiscal Year 2019.” State and Local Backgrounders Project, March 2022.

U.S. Census. 2022. “Nation’s Urban and Rural Populations Shift Following 2020 Census.” U.S. Census Bureau, December 2022.

U.S. Census Bureau American Community Survey (U.S. Census Bureau ACS). 2021. ACS Five-Year Estimates, Table S1810, “Disability Characteristics.” Accessed May 17, 2025.

U.S. Census Bureau American Community Survey (U.S. Census Bureau ACS). 2023. “Median Household Income in the Past 12 Months (ACS 2023 1-year Estimates).” Accessed May 20, 2025.

U.S. Clerk. 2022. “Roll Call 290 | Bill Number S 2089: Keep Kids Fed Act.” Clerk of the U.S. House of Representatives 118th Congress, June 23, 2022.

U.S. Commission on Civil Rights Briefing Report (USCCR). 2019. Collateral Consequences: The Crossroads of Punishment, Redemption, and the Effects on Communities, June 2019.

U.S. Department of Justice et al. v. RealPage Inc (U.S. et al. v. RealPage). 2024. “Case No. 1:24-cv-00710.” United States District Court for the Middle District of North Carolina, filed August 2024.

Van Dam, Andrew. 2023. “Why the South Has Such Low Credit Scores.” Washington Post, February 17, 2023.

Vance, Taylor, Michael Goldberg, and Geoff Pender. 2025. “House Votes to Send Senate Income Tax Elimination Plan to Governor. But Is Debate Really Over?” Mississippi Today, March 20, 2025.

Villanueva, Chandra King. 2022. “Testimony to the House Ways and Means Committee on the Use of Fiscal Recovery Funds.” Every Texan, April 2022.

Von Pohlmann, Jennifer. 2024. “Foreclosure Rates for All 50 States in October 2024.” ATTOM, November 15, 2024.

Vrbin, Tess. 2025. “Two Bills to Change Citizen-Led Petition Process Pass Arkansas House, but Without Emergency Clauses.” Arkansas Advocate, March 10, 2025.

Wang, Leah. 2023. Punishment Beyond Prisons 2023: Incarceration and Supervision by State. Prison Policy Initiative, May 2023.

Weill-Greenberg, Elizabeth, and Ethan Corey. 2024. “Locked In, Priced Out: How Prison Commissary Price-Gouging Preys on the Incarcerated.” The Appeal, April 17, 2024.

Wen, Christine, Katie Furtado, and Greg LeRoy. 2021. Abating Our Future: How Students Pay for Corporate Tax Breaks. Good Jobs First, March 2021.

Wething, Hilary. 2024. How Vouchers Harm Public Schools: Calculating the Cost of Voucher Programs to Public School Districts. Economic Policy Institute, December 2024.

Wishner, Jane, Patricia Solleveld, Robin Rudowitz, Julia Paradise, and Larisa Antonisse. 2016. A Look at Rural Hospital Closures and Implications for Access to Care: Three Case Studies. The Urban Institute and the Kaiser Family Foundation, July 2016.

Zvonkovich, Jordan, Stacy H. Haynes, and R. Barry Ruback. 2022.“A Continuum of Coercive Costs: A State-Level Analysis of the Imposition and Payment Enforcement of Statutory Fees.” Federal Sentencing Reporter 34, no. 2–3 (February): 113–118. https://doi.org/10.1525/fsr.2022.34.2-3.113.

The rising cost of homeownership is also having spillover effects in the rental market as more families have had to resort to renting, thus increasing the demand and prices for rental units. The primary issue leading to America’s housing crisis—for buyers and renters—is a shortage of affordable housing that has major implications for equitable access to shelter and wealth. 

Outlining the problem 

In Figure A, the Consumer Price Index (CPI) for rent of primary residence reveals a significant surge in the cost of renting across U.S. cities over time. Since 2009, the cost of rent has climbed 67%—with nearly half of that increase occurring in the last five years. The cost of rent has increased faster than the cost of most consumer goods. Such a steep increase underscores the mounting financial burden on renters and the challenges they face in securing affordable housing. 

The problem of rising rent is most acute in growing metro areas with a greater concentration of employment opportunities. The result is lower-income workers and their families are being pushed further out into the suburbs where they face longer commutes and higher transportation costs, while families who remain in the cities find housing costs are consuming more of their monthly income as the threat of eviction and homelessness rise.

Figure A

Families who rely on government assistance to gain access to housing—a disproportionate share of whom are women-led, Black, or Hispanic—face further headwinds through source-of-income discrimination. While many states and localities prohibit discrimination against families attempting to use Housing Choice Vouchers (otherwise known as Section 8) to access housing, this is not the case federally, and in many places, enforcement is lacking. 

During the early months of the pandemic, the Federal Reserve appropriately acted to avert economic catastrophe by reducing already low interest rates. While this made accessing mortgages easier for new homebuyers than it had been for many years, the resulting surge in home purchases combined with the pause in new construction during the pandemic made an existing shortage of housing stock much worse. As the Fed aggressively hiked interest rates in 2022 and 2023 in response to rising inflation, that temporary ladder toward homeownership for many has been pulled away, leaving much of the U.S. housing market prohibitively expensive for would-be homeowners and renters alike. 

The consequences of the housing affordability crisis extend beyond making access to shelter more difficult. Safe and secure instruments for building wealth are few and far between in the United States, so most families rely on their home as the major source of net worth. Wealth-building is put further out of reach for many families when access to homeownership is made more difficult. That problem is exacerbated for Black families, who own just 15.5% of the wealth of the typical white family, and for whom housing wealth is a larger share of overall wealth than for other groups.  

Black and Hispanic families are consistently more likely to be denied access to mortgages than the overall population of homebuyers, and this disparity comes from more than simply a difference in ability to pay or creditworthiness. Marginalized families face various forms of discrimination when attempting to access and benefit from homeownership—from difficulty obtaining mortgages at all to receiving less favorable mortgage rates and unfair home appraisals. For example, the Department of Justice (DOJ) and Consumer Financial Protection Bureau (CFPB) have in recent years caught banks and credit unions red-handed continuing the legacy of redlining by refusing to lend in majority Black and Hispanic neighborhoods, and by offering sub-prime mortgage rates to Black or Hispanic borrowers, irrespective of ability to pay.  

Inaccessible homeownership, rising rents, and widespread discrimination together create a housing situation in the United States that feels dire. It’s little wonder that sentiment about the economy is mixed, despite a strong job market with the largest wage gains among low-wage workers and slowing inflation. Positive messages about the strength of the post-pandemic economy can ring hollow when housing costs continue to consume a larger portion of household budgets.  

Why the market approach to the housing affordability crisis won’t work 

There is a tension at the heart of the relationship between landlords and tenants that makes it difficult for the market to reach a solution to the housing affordability crisis without government intervention. Landlords are driven to maximize the total amount of revenue and can best achieve that goal using one of two strategies: by catering to tenants with higher, more stable incomes (the luxury strategy) or by minimizing the cost of maintenance on cheaper units through neglect and a lack of improvements (the slumlord strategy). The luxury strategy excludes typical U.S. workers and their families, as wages have not kept up with the increasing costs of rent over the past 40 years—even the relatively strong wage growth of the last four years has not been enough to offset rising housing costs. The slumlord strategy results in unsafe living conditions and housing insecurity. In both cases, working families, particularly those of color and in the bottom of the income distribution, face the brunt of the consequences. 

Unfortunately, the United States has not done anywhere near enough to regulate the rental market to protect tenants from untenable rent increases, housing insecurity, and unsafe living conditions. And some policymakers are trying to deregulate the market further: Recent proposals aim to make it easier to evict tenants struggling to make rent and to relax safety standards for the construction of manufactured homes. An insufficiently regulated rental market leads to a squeezing of the middle for typical American households; overproduction of high-cost (luxury) units to service a higher-income clientele pushes lower-income families out of desirable metropolitan areas, while less affluent families are pushed toward housing insecurity and less safe conditions. 

On the homeownership side, a lack of adequate enforcement of existing regulations has opened the door to racially discriminatory practices. Moreover, the legacies of gentrification and continued racial and economic segregation in cities across the country are clear examples of insufficient regulation, representing another critical dimension of the housing crisis we face. 

Equity-focused policy is a better alternative 

Further deregulation is not the solution to the crisis facing the U.S. housing market. Instead, we should use policy to ensure that people can access the fundamental human need of shelter in a way that is economically sustainable and equitable. No single approach will be enough to solve the housing affordability problem entirely on its own—a bundle of equity-focused policies will be necessary to move the needle. 

Federally funded housing construction that is energy efficient and safe would be the most direct method of addressing our current housing supply shortage. The Biden administration has already taken steps toward this goal through federal subsidization and tax credits for construction in areas facing supply constraints. A more radical strategy would involve the government building more housing directly, as suggested by the social housing movement in Washington D.C.  

Reforming zoning laws to allow for more residential construction, and more multifamily housing in particular, should also be part of the approach to increasing housing supply, but admittedly one that faces opposition. Existing homeowners often object to the creation of more multifamily housing in their vicinity; the current housing shortage and zoning regime contributes to maintaining the value of their home should they decide to sell. This should not impede efforts to solve the housing crisis. An equity-focused policy approach would prioritize directing resources toward those struggling to make rent or purchase their first homes at an affordable price over boosting existing homeowners’ store of wealth. 

Rent control is another policy that should be pursued under an equity-focused approach. Ideally, wages would rise in proportion to rents, but this has not been the case for the past 40 years. Placing a limit on rent increases protects renters and their families from experiencing housing insecurity and would also curtail one of the major contributors to inflation. 

Focusing on the demand side of the housing crisis, equity-focused policy prioritizes fair access to the housing market. This means proactively pursuing equity in lending, home appraisal, and the use of housing vouchers along with robust enforcement of antidiscrimination laws. Providing more support to enforcement agencies like the DOJ and CFPB is essential to supporting fair housing practices like those proposed in the Fair Housing Improvement Act, which would address source-of-income discrimination at the federal level.  

A root problem of racial disparities in housing and homeownership on the demand side is unequal access to capital. Racial disparities in homeownership are often cited as a major contributor to the racial wealth gap, but for many Black and Hispanic families, the difficulty in becoming a first-generation homeowner is so often a matter of differences in access to intergenerational wealth transfers. Black and Hispanic young adults are less able to receive financial help from a family member in putting together a down payment on a home. An equity-focused policy solution would be the first-generation down payment assistance programs proposed by the Biden administration’s Build Back Better framework that’s now being introduced in states and localities across the country. Student debt cancellation is another equity-focused solution, as the burden of student debt disproportionately hinders Black borrowers in their pursuit of homeownership.  

Finally, programs centered on redress for our nation’s history of Black families being left out of the programs that built a white middle class of homeowners could be used to address the large racial wealth gaps that characterize the United States. Housing voucher programs like the Restorative Housing Program in Evanston, Illinois, are one strategy along a spectrum of policies that extends all the way to cash-based reparations at the local, state, and federal levels. 

Maintaining a housing market that is affordable and accessible for all is too critical of an issue to leave to chance, or to the turbulence of the market. Whether families decide to rent or pursue homeownership, securing shelter should not push them toward financial ruin, nor substandard living conditions. We’ll need to design and implement a broad basket of policies that centers equity across race, income, and family structure if we want to solve our housing crisis in a way that benefits all. 

This report is a joint project of EPI and the Jain Family Institute.

Key findings

• The decline in homeownership rates among young borrowers in D.C., from 22.1% in 2010 to 13.7% in 2022, is closely linked to the surge in student loan debt.
• Homeownership in D.C. is marred by racial and educational disparities, as majority-Black neighborhoods grapple with lower educational achievements and elevated mortgage denial rates.
• Young borrowers in D.C. not only have the highest levels of student debt in the United States but also face challenging debt-to-income ratios, exacerbating financial strain, particularly in majority-Black areas.
• The root causes of racial disparities in homeownership and mounting student debt in D.C. are systemic, necessitating multi-faceted federal policy for meaningful change.

Download the full report

As we note in Just Action, African American household income is about 60% of white household income. That discrepancy is concerning in itself, but the wealth gap is much, much worse: African American household wealth is only 5% of white household wealth.

Government housing policy exacerbated the wealth gap

While many factors have contributed to the troubling disparity between the income and wealth gaps, one factor stands out: government housing policy in the early- to mid-twentieth century.

Policies that subsidized homeownership for white working- and middle-class households during that period allowed those families to buy homes. They accumulated wealth over decades as their homes appreciated. They then passed on that wealth to their children and grandchildren.

African American families were explicitly and unconstitutionally excluded from these programs. That made it harder—often impossible—for them to own homes and thus build wealth they could bequeath to subsequent generations.

For many African American families, the story stopped there. These families would have been able to afford a home if they had been permitted to purchase government-subsidized suburban homes the way white families had. But they were explicitly prohibited from purchasing those homes.

But even for the minority of Black families who managed to purchase homes, a wealth imbalance has persisted. These families were forced to purchase into less-well-resourced neighborhoods, and the values of homes in those neighborhoods didn’t increase the way home values in white suburban areas did. Therefore, though they were able to accumulate some wealth, they were not able to accumulate as much wealth as white families did.

We describe all this in Just Action. And we talk about ways to begin to redress homeownership disparities going forward. We describe programs that can help Black families into homeownership today, and we show how racial justice advocates and their community organizations can improve access to these initiatives, expand them, and increase opportunities for homeownership in communities where poverty isn’t concentrated.

But there is yet another part of the story we did not have space to address in the book. Families who had homes and land have too often lost them, because these properties were not passed down according to the original owners’ wishes. For these families, lack of intergenerational wealth lies not in the fact that they never had wealth. Rather, the wealth they had built was lost rather than fairly inherited by subsequent generations.

Probate and the ‘heirs property’ designation puts families at risk of losing their homes and wealth

When a property owner dies with a will or estate plan, the asset is distributed according to the owner’s wishes, with the named heirs becoming the legal owners of the property. This happens more often for white property owners than for African American property owners. While most American adults do not have a will, over half of white Americans do, compared with 24% of African Americans.

There are many reasons for this discrepancy. Families with fewer assets or lower-value homes—who are disproportionately African American—may think estate planning is not necessary and may be less aware of the benefits of having a will. Black households may also be less likely to trust the legal system. Finally, they may be deterred by the legal expenses associated with creating an estate plan.

When a person dies without a will or estate plan, their assets go into a process called probate. In this process, the court decides how much the assets are worth, pays off creditors, and then identifies heirs. Without a will to identify heirs, the court uses default rules that give children and grandchildren shares of the property (with complicated rules about who the heirs are if there are no surviving children or grandchildren). The asset is then designated an “heirs property.” This designation can be problematic.

There is no easy way to get a home out of being an heirs property once it is so designated. Most states require agreement by all heirs to change the ownership structure. This can be difficult or impossible, as there may be dozens of heirs spread across the country—or even the world—who may not know they are part-owners of a property. Locating them and informing them of their rights can be a challenge. At the very least, the process will require significant resources for fees, appraisals, and legal assistance.

Those living in a home their parents or grandparents owned may think that they are the presumptive owners when those older generations pass away. They may have lived at the property for years—even decades—and they may know or believe that their parent or grandparent wanted them to continue living there.

But without a will, the property is not legally transferred at the owner’s death to the persons occupying the home, so the occupants are not on the home’s title. Without a clear title, the occupants can’t qualify for any kind of loan that requires the property to be used as collateral, such as a home refinance mortgage. They are also unable to access many government-funded programs aimed at homeowners. For example, they are disqualified from disaster relief as well as the “homestead exemption,” which reduces property taxes for owner-occupied homes. Without this exemption, in areas where property values are increasing, the occupants of the home will be faced with rising property tax bills without being eligible for reductions. They may miss a payment. Local government then will likely place a lien on the home for the unpaid taxes. This can lead to foreclosure and the loss of a home that had been in the occupants’ family for generations.

Even if the occupants are able to keep up with taxes and forestall foreclosure, if the home is an heirs property, the occupants could still lose it under partition laws, which are in effect in 28 states. Under a partition law, when any heir requests to cash out their portion, no matter how small a fraction they own, it forces sale of the entire property. A distant cousin who owns a 5% share can force a sale without the agreement of the other heirs, including family members who live on the property and who may have lived there continuously for decades.

Investors and developers sometimes take advantage of this, finding those distant relatives, buying their shares, and then forcing the sale. Per the partition law, the sale doesn’t happen on the open market, but in a government auction where the winning bidder must pay in cash. Family members who want to retain ownership can rarely afford to buy the home at auction. Instead, investors or developers—sometimes the very same ones that demanded the sale to begin with—buy the whole property for a fraction of what it’s worth. The sale proceeds are then split among all the heirs according to their court-designated shares.

Since 2011, twenty-three states have reformed their laws to prevent partition sales by passing a Uniform Partition of Heirs Property Act, or “Uniform Act.” Under this law, when a part-owner requests the forced sale of an heirs property, the remaining heirs can buy out that part-owner’s fractional interest and retain ownership of the property. The Uniform Act also gives the court the option to divide the property among all heirs, when appropriate, and allow the sale of that part-owner’s piece. In instances when a forced sale is appropriate, such as for a single home that can’t be divided into parts, the act requires that the property be sold on the open market, which yields a higher sales price than an auction and allows buyers to secure financing for the purchase. (For more on the Uniform Act, see this interview with Professor Thomas Mitchell, who developed the model state statute, as well as his recent book.)

Seven of the 27 states that haven’t passed a Uniform Act are in the South. There, many who have lost their land in the partition process are descendants of people freed from slavery who acquired land to farm. Often it was land no one else wanted at the time. This land has since become more desirable, and developers have used partition laws to acquire these now-profitable properties.

In North Carolina, Carteret County has the highest rate of partition actions. The county’s population of 70,000 is 6% African American, but 42% of the partition cases in the last decade involved African American families. A ProPublica feature about heirs property loss in the South tells the story of Jessica Wiggins, whose family owned 18 acres in Bertie County, north of Carteret. The land contained woods, farmland, and her great-grandmother’s house and, until 2015, was an heirs property. That year a company named Aldonia Farms bought the interests of four of the property’s heirs, one of whom was Wiggins’s uncle, who suffered from dementia. Even though Aldonia Farms owned only 39% of the land, it forced the sale of the full 18 acres. The remaining heirs could do nothing to prevent it. The property was sold in a county auction and the family lost it all.

In Louisiana, which also still has partition laws on its books, Fred Wardlaw’s family owned a large parcel of land in the town of Castor. The parcel included creeks, farmland, and several of his extended family-members’ homes. As Wardlaw described to NPR’s Planet Money in 2021, the land had been in his family since his great-great-great grandfather, Jacob Loud, who was born enslaved in Virginia, acquired it through the Homestead Act in 1906. By Fred Wardlaw’s time, the land was collectively owned as an heirs property by members of five generations of his family.

In 1999, Wardlaw’s family learned that a partition action had been filed, forcing the sale of the whole property. Wardlaw investigated and learned that the action had been brought by the owner of a 4% share, which Wardlaw’s great-uncle had sold to two white men in 1980 for $100. The buyers had then sold it for $1,000 to another man, from whom it was later acquired by a timber company. Though the company owned only 4% of the land, Louisiana’s partition law did not allow the remaining heirs to buy out that share or sell that fraction of the land and keep the rest. As a result, Wardlaw’s family’s land was auctioned off. No one in the family had the cash to make a bid. The timber company that owned the 4% share bought the full 160 acres, with proceeds divided up between the heirs. All homes on the land were soon demolished.

(Louisiana has since changed its law so that a part-owner of an heirs property must own at least 20% of the property to force the sale, but it has not made more comprehensive reforms such as passing a Uniform Act.)

While estimates vary, NPR reports that half of Black-owned land in the U.S. is held as heirs property. More land is likely at risk of becoming so at the death of the property’s legal owner. This is a pressing issue in the South, where Black-owned land is more likely than in other parts of the country to have been acquired several generations ago by ancestors who did not leave wills and estate plans. But it also affects homeowners in other parts of the country. When an elderly homeowner in Philadelphia or Cleveland, for example, dies without a will, their home also becomes heirs property and can be forced into a partition sale by any part-owner of that home.

What can be done about this?

Organized residents can campaign for their states to pass a Uniform Act if they have not yet done so. Until that happens, they can advocate for local government assistance to heirs property owners, in order to stabilize communities and prevent loss of intergenerational wealth. Gainesville, Florida, has an Heirs’ Property Assistance Program that provides free legal assistance to owners of heirs property to obtain clear legal title to their homes. Recipients must meet income eligibility guidelines and their property must be in the city’s Community Reinvestment Area.

There are limits, however, to what can be done once the legal owner of a property has died without a will or estate plan, especially in states that have not reformed their partition laws. Therefore, it is also essential that we do what we can to prevent this from happening. We should provide support to make sure more property owners have an estate plan that specifies who should be the legal owner of the property upon their death so they can avoid these complications for their descendants.

Organizations that provide homeownership education and counseling should include estate planning in their curriculum. Financial institutions that require borrowers receiving homebuyer assistance to take these courses should also make having an estate plan a prerequisite for eligibility. Community organizations can pressure banks that offer targeted assistance to low-income and African American borrowers to provide free or low-cost estate planning resources for their grantees.

Community and legal aid organizations should also provide affordable estate planning services and do targeted outreach to educate and inform African American homeowners, especially seniors, about what is at stake. Grow Brooklyn, a nonprofit that provides homebuying and financial counseling to lower-income residents of New York City, provides free estate planning services. More should follow its lead. Community organizations and churches can help educate their members about the importance of estate planning and connect them with resources to do so.

If we are serious about closing the racial wealth gap, as we should be, we must address the ways African Americans have been denied wealth accumulation through homeownership and also the ways they may be at risk of wealth loss through heirs property rules. There is much we can do to make progress on both.

A slightly edited version of this blog post will be published on the “Just Action” Substack column of Leah Rothstein and Richard Rothstein. You can subscribe here. Richard Rothstein is an Economic Policy Institute distinguished fellow. 

Some Menlo Park residents pushed back against proposed housing for teachers and support staff who couldn’t afford to live in or near the towns where they teach, introducing Measure V. The measure, defeated in 2022, would have blocked the teacher housing and made it more difficult to build homes, including affordable apartments, in their communities. 

This win—in one of the richest suburbs in the country—is a story of unyielding grassroots activism, years of preplanning, and constant reinforcement of the “No on V” coalition’s vision of a racially, ethnically, and economically diverse town. 

This strategy aligns perfectly with what we argue in our book Just Action and shows what is needed to achieve change and reform a biased housing system spawned from government-sponsored segregation. 

Menlo Park, known as the “capital of venture capital,” is a town of about 30,000, of whom 3% are Black, 17% are Hispanic, and the remainder are white and Asian. Located in the heart of the San Francisco Bay Area’s Silicon Valley, the median household income in Menlo Park is over two and a half times the nationwide figure. Most of the city’s teachers, public employees, and service workers can’t afford to live near their work.  

Redressing segregation requires that towns like Menlo Park diversify their housing to allow residents with a range of incomes to live within them. We suggest that zoning reform, inclusionary zoning, and affordable housing production can help accomplish this. But these strategies are often met with resistance by residents who claim that increasing affordability will threaten their community character and property values—a veiled attempt to keep these places affluent and white. 

It’s not surprising, then, that some in Menlo Park opposed a local school district’s proposal to build 90 units of affordable housing for teachers and staff on a vacant site the district owned. They crafted a ballot measure to block the construction but went further. If passed, it would have required voter approval to reclassify any parcel zoned for single family dwellings. In a city where existing home prices are in the millions, Measure V had the potential to block all attempts to create more affordable housing options.  

If this measure had been proposed before we wrote Just Action, we would have explained that launching a campaign to defeat the measure is an example of an activity that a suburban group hoping to redress segregation could undertake. Instead, I write about it now as a successful model for other communities.  

Here’s how it happened. 

Menlo Park voters resoundingly defeated Measure V thanks to a campaign launched by the Housing Leadership Council of San Mateo County and Menlo Together, a local organization formed four years earlier to promote equitable housing, environmental sustainability, and transportation. I spoke with Karen Grove, chair of her family’s philanthropic foundation and one of Menlo Together’s founders, and Margarita Mendez, a teacher and leader in the No on V effort, to hear more about how they defeated the measure and what they learned in the process. 

Before Measure V was proposed, Menlo Together was busy building a base of supporters aligned with its vision of transforming the city into one that is integrated and diverse, multi-generational, and environmentally sustainable. The group developed a training around my father Richard Rothstein’s seminal book, explaining how government policy intentionally segregated the region and connecting this history to the city’s current racial makeup and housing affordability crisis. In 2019, over 300 people came to hear Richard speak about the book at a local church, and a few weeks later, over 100 came to the group’s first workshop. Then the pandemic hit and the training went virtual, but it still retained an “in-person feel,” as Grove explained: “We tried to make it supportive so that people felt in community and not judged as they were facing an uncomfortable set of facts.” Menlo Together ran the program for a regional housing conference, the school district, the county’s office of housing, and neighboring cities. “Once we did it a few times,” said Grove, “people asked us to do it again and again.” In 2021, over 500 people attended a workshop.  

Because of this ongoing public conversation and the group’s expanding support, when Measure V was introduced, many residents understood that it wasn’t only about 90 units of teacher housing. As part of its organizing, Menlo Together required that members agree with the group’s vision and its values of equity, sustainability, inclusion, health, and racial and economic justice—this measure was another test of these values. In its workshop, participants studied how segregation had been created. Now we know better, Grove said, “so it’s time to do better.”  

The campaign had a very sympathetic message—it’s hard to argue against housing for teachers, especially in a district where one-third of teachers leave every year, in large part because they can’t find affordable housing near their work. The campaign also benefited from a growing membership base; several early, generous donors, including Grove’s family political action fund; access to voter identification and turnout information and systems; and assistance from regional housing advocates who saw the danger of similar measures passing in surrounding cities if this one wasn’t defeated.  

What struck me the most in talking to Grove and Mendez, however, was how important it was for them to be explicit about their values and how this contributed to their success. Grove said she learned many lessons from the No on V campaign, but one stood out: 

“It’s worth planting a flag for your values,” she said, adding that the worst that can happen is people won’t agree. “That’s what Menlo Together did and what this campaign did. We said, ‘here’s what we stand for and here’s the programming around it, and we’re going to act in accordance with that, and come join us if you want and if you don’t, that’s OK. This is an experiment, let’s find out how many of us are here.’” 

Mendez was born in Mexico and raised in neighboring Redwood City. She has lived in Menlo Park since 2004 and has been a teacher in a nearby district for over 20 years. Her family moved to Menlo Park when home prices were more affordable. Before Measure V, she wasn’t very active in local politics, but in 2022, she was inspired to call in to a city council meeting to challenge the objections she was hearing to the teacher housing development. 

Mendez recognizes how lucky she was to grow up in the area and brushes aside arguments from Measure V supporters that hard work is all that is needed to be able to live in Menlo Park: “I’m like, that’s bull****. It’s luck. I don’t want to keep teachers from living in this neighborhood.”  

Mendez’ call to the city council meeting got Grove’s attention and she reached out to Mendez, who began attending local housing events. “Then it was a no-brainer for me to start getting more and more involved,” said Mendez. “What they’re presenting [are] the things I care about.” Soon, she was spending every weekend knocking on voters’ doors to discuss Measure V. 

When Measure V was introduced, Grove proposed that the Menlo Park City Council study the measure’s racial equity and educational impacts. Her suggestion was criticized in public forums, but the City Council authorized the analysis and its conclusions helped inform the No on V campaign’s top four messages: 

1. Teachers need housing and they can’t afford to live in Menlo Park. With teachers commuting hours to their schools and with 30% leaving the district every year, students’ education suffers.  
2. Measure V violates a state law that requires cities to allow for housing that serves all income levels and risks expensive lawsuits, which would cost taxpayers. 
3. The measure would perpetuate Menlo Park’s racial segregation. 
4. Measure V would not only block the proposed teacher housing—it would make it harder to build diverse housing in the future. 

Every Saturday, Mendez went door-to-door in the more affordable parts of the city delivering these messages. “We didn’t have to sell [this to] anybody. Everyone understood how expensive it was to live here, no one would argue that point,” she recalls. Grove, who canvassed in more expensive neighborhoods, said that even when she expected opposition, she was often surprised by the support she found. She recounted that “some of the people who didn’t need persuading learned that other people in Menlo Park share their values. Some of them felt really isolated in those values.” Mendez concurred—her involvement showed her that she wasn’t alone in wanting a more inclusive community. “These are my people in Menlo Park,” she said. “I didn’t know they existed here and that was really powerful.” 

The No on V campaign’s victory (61% to 38%) is inspiring and worthy of celebration. But it was even more inspiring for me to hear Grove and Mendez explain how the campaign helped them find like-minded neighbors when they didn’t expect to, and how leading with their embrace of diversity allowed for this outcome. Too often, efforts to counter neighborhood opposition to affordable housing shy away from advocating for inclusion and diversity because of fear that these values won’t garner the support they need. Instead, efforts emphasize only legal or fiscal concerns. Menlo Together showed that, even in one of the most exclusive communities in the U.S., supporters of inclusion exist—they just have to be found and connected to each other. Then they must organize. 

Over 600 people engaged in some way with the No on V campaign, and another 1,000 or more told campaign volunteers that they were voting against the measure. The group is now seeking ways to engage these supporters in the future.  

Menlo Together’s decisions are made by a core team of 12. Engaged members who stand out in the group’s working committees, actions, and events are invited to attend core team meetings but not vote. A subcommittee then nominates voting members as seats vacate, ensuring that white members are a minority of the decision-making body. The voting members decide on the policy positions the group takes, and if a policy is specific to a formerly redlined area of the city, it must have the support of the core team members from that neighborhood.  

Early in the No on V campaign, Grove asked Mendez to debate a Measure V proponent at a public forum. Mendez had never done anything like this—it was far outside of her comfort zone—but she did it. I can see why Grove tapped Mendez for this role. She’s passionate and persuasive. She’s also similar to many residents of affluent communities who want their neighborhoods to be more inclusive but don’t know what steps to take or if others share their aspirations. Mendez happened to join a group that was already formed and well-funded, but change can start just by talking to your neighbors: 

“Here we were, this small group. Even though we have money, it was the work we put in knocking on doors, getting in front of people, talking to whomever [that made us successful],” she explained. “Our community has room for not just the lucky people or the wealthy people, there is room [for everyone] and if communities want to include everyone, people can organize and get this done. That’s what we did.”  

A slightly edited version of this blog will be published on the “Just Action” Substack column of Leah Rothstein and Richard Rothstein. You can subscribe here. Richard Rothstein is an Economic Policy Institute distinguished fellow. 

“The answer isn’t to place the burden on the market. It’s to root out bad government policies,” write David Henderson and Phillip Magness—who work at conservative policy centers (the Hoover Institution and the American Institute for Economic Research, respectively).

Henderson and Magness, however, identify no particular government policies whose rooting out would redress segregation while simultaneously avoiding a burden on markets. More to the point, however, they ignore the enormous responsibility for segregation that the private sector also bears, and its obligation to participate in reform to a much greater extent than any business enterprise now contemplates.

The Color of Law uses Levittown, the 17,000-home post-World War II development east of New York City, to illustrate how public agencies suburbanized the nation on a segregated basis. The builder, William Levitt, could never assemble the capital for such an undertaking without federal guarantees for his bank loans. The government’s explicit requirement was that he never sell to African Americans and that he place into house deeds a prohibition on future resales or rentals to them.

But Levitt was himself a bigot. He announced that left to his own devices, his company would never sell to Black buyers. Yet if the Federal Housing and Veterans administrations had fulfilled their legal responsibilities, they would have told Levitt he could either sell on a non-discriminatory basis or not at all. That’s why our system of residential segregation is both unlawful and unconstitutional.

The private sector imposed racial exclusion in many communities long before the 1930s when government first got involved in the housing market. Researchers in communities around the country have identified racially restrictive deed clauses, as in Levittown, that were inserted by banks, developers, and real estate agents without being required to do so by the government. The language flouted civil rights laws dating to 1866. Federal authorities and the courts failed to enforce those laws, but violations were within the private sector’s sole discretion.

In a new book, Just Action, coauthored by myself and my daughter Leah Rothstein, we describe how banks financed speculators who exploited African Americans by marketing homes to them on “contract” for prices many times what the sellers had paid for the properties only weeks before, taking advantage of the same banks’ refusal to issue conventional mortgages to Black buyers. There was no government involvement in this scheme, except for a refusal to enforce civil rights laws that prohibited such actions.

For geographically diverse cities—Baltimore, Charlottesville, Chicago, Rochester, San Mateo—Just Action names the specific banks, realtors, developers, newspapers, and insurance companies that committed these crimes. Where these businesses were subsequently merged into or acquired by larger enterprises, we identify the successor firms and assert that they not only inherited financial liabilities of companies they absorbed, but moral responsibilities as well.

In 1948, the Supreme Court prohibited state and federal courts from ordering the eviction of Black households that purchased homes in violation of a racial deed. Just Action describes how, in response, the real estate industry launched a national campaign for a constitutional amendment to permit racial discrimination in the sale and rental of housing.

The California real estate association explained that the amendment was necessary because “prices of homes in [white] areas are well within the purchasing power of vast numbers of Negroes… [and this] greatly aggravates the hazard to which [white] homeowners are exposed… [T]he insistence of some Negroes [to move to affordable neighborhoods will] do much harm to our national social structure.”

Government had nothing to do with this campaign. Throughout the nation, local real estate boards led efforts to defeat state and local legislation to ban housing discrimination. Builders on their own, without any government subsidies, excluded Black buyers from newly constructed subdivisions. Newspapers supported the practices by publishing advertisements for “restricted” projects.

Some enterprises that Just Action demonstrates share responsibility for segregation have responded to their legacies by creating “diversity, equity, and inclusion” departments that promote hiring more Black employees and urging an end to ongoing discriminatory practices. In a few cases, banks have established modest down payment assistance programs that help a few African Americans buy homes, usually in low-income segregated neighborhoods. Much more is needed, specifically large financial contributions to give vast numbers of Black households access to whites-only areas that, when built, were ‘well within their purchasing power’ but that now, after decades of property appreciation, are no longer affordable to middle-class families.

Unlike the Wall Street Journal writers, Just Action does not hesitate to name specific government policies that perpetuate segregation; it shows how a new civil rights movement can organize to root them out. But we also identify the private institutions that collaborated with public policy to create an apartheid landscape, and why a racial justice movement should campaign to compel participation by business as well.

Government and the private sector created and sustain segregation and both should step up to redress it.

This blog is a slightly edited version of the “Just Action” Substack column of Leah Rothstein and Richard Rothstein. You can subscribe here. Richard Rothstein is an Economic Policy Institute distinguished fellow.

A growing housing supply shortage is a key contributor to the housing affordability crisis. Following the Great Recession, the share of homes being built fell significantly, causing buyer demand to exceed housing production. In fact, fewer new homes were built in the decade following the Great Recession than in any decade since the 1960s. This deficit has now expanded even further, contributing to a shortfall of over 3 million homes and growing.

Some of the leading factors responsible for the housing shortage are land availability and exclusionary zoning laws, which restrict the kinds of homes that can be put in certain neighborhoods—maintaining segregation. Examples of exclusionary zoning laws include minimum lot and square footage requirements, limits on the height of buildings, and restrictions on building multi-family homes. These laws have historically sought to exclude lower-income residents from living in more affluent suburban developments with access to high-performing schools, employment, and other amenities. In the early decades of the 20th century, these laws were also used as a vehicle for explicit racial discrimination excluding Black residents from predominantly white neighborhoods.

Today, the legacy of these laws remains in place and has had far-reaching consequences for all families trying to secure housing. Despite the Fair Housing Act prohibiting discrimination based on race, color, national origin, religion, sex, and other identities, the law does not prohibit class-based discrimination. This allows a legal loophole where people earning low incomes can be restricted to certain neighborhoods and excluded from living in more affluent areas with broader investment and economic opportunity. Given that Black and Latinx families have far less wealth and income than white households, on average, these exclusionary zoning laws are often used to intentionally drive people of color out of certain communities and keep neighborhoods more uniformly white. The pattern of this discriminatory practice over time has exacerbated many racial economic disparities we see today and also takes root in the current housing unaffordability crisis.

How did we get here?

Like most economic phenomena in the United States, the housing supply shortage is the result of a series of deliberate political economic decisions made over time. It is helpful to think through the conditions that led to these decisions being made and continually supported so that we can see what should change to prevent the historical process from repeating itself, even if we eventually find some way to increase inventory or affordability in the short term.

In the United States, homeownership not only provides the shelter every person needs to live a secure life, but also serves as most families’ primary mode of wealth acquisition. Most American families hold most of their net worth—to the extent that they have assets at all—in the value of their home. This is particularly true for Black and brown families, whose housing wealth makes up an even larger percentage of their (much smaller) net worth compared with white families. Other forms of building wealth, like the growth of a defined-contribution retirement account over time or individual entrepreneurship, have proven less secure and less effective than homeownership at increasing families’ net worth.

Figure A

The United States also has one of the weakest social safety net arrangements among Organization for Economic Co-operation and Development (OECD) countries, making the acquisition and maintenance of individual family wealth necessary for economic security. Our economic system is full of pitfalls that are avoidable for families who have secured individual wealth but can be devastating for those who have not. The rising costs of health care, higher education, and other living expenses are all defrayed by having a valuable asset like a home to borrow against or sell when times are particularly hard. The value of a home even matters intergenerationally, as homes are an asset that can be easily transferred to one’s children or used to otherwise support their economic goals.

The necessity of valuable homeownership for family economic security in the United States means that there are powerful incentives to keep existing homes valuable. These incentives have historically led to policies limiting both access to homeownership and the supply of housing. During the early to mid-20th century, the Federal Housing Authority financed mortgages and built affordable, quality public housing aimed at assisting (largely white) American families in securing homeownership. These policies became less politically popular after the Civil Rights Movement and a recommitment to ensuring that all families—including Black and brown families—could take advantage of government assistance.

The “redlining” practices of the early and mid-20th century, which effectively (though not explicitly) excluded Black families from purchasing homes in certain neighborhoods, can also be understood in this context. Even today, racial bias shapes the value attributed to homes in neighborhoods with growing Black populations; white American families were determined to preserve the racial purity of their neighborhoods not purely out of a distaste for Black neighbors, but because that collective distaste could lower the value of their most significant financial asset, their home. Racist policies are often maintained because it is economically beneficial to keep them in place for dominant groups.

As Richard Rothstein—EPI research associate and the author of “The Color of Law”—explained, many of these exclusionary rules practices cropped up in the 20th century just as court rulings made it more difficult to enact explicitly racist housing policies. In 1917’s Buchanan v. Warley, the Supreme Court held unanimously that a city ordinance prohibiting the sale of property to blacks in majority-white neighborhoods in Louisville, Kentucky, violated the 14th Amendment. Government-instituted racial zoning policies were thus declared unconstitutional (a ruling later codified in the Fair Housing Act of 1968). In the wake of that Supreme Court decision, a flood of communities rushed to adopt more covert zoning ordinances that effectively excluded Black families by restricting the supply of new, affordable housing. In 1916, only eight cities in the country had zoning ordinances. By 1936, 1,246 cities had put such ordinances on the books.

These policies of exclusion and our lack of support for the creation of new housing supply resulted in homeownership becoming less accessible for all working families. This problem culminates today in the rise of NIMBYism (Not in My Backyard), an extension of the same 20th century ideology of exclusion that brought us to this point. NIMBYism seeks to preserve the value of homes today by opposing policies that would increase access to homeownership (e.g., changing zoning laws to allow for more multi-family housing, increasing the supply of affordable housing, or creating more public transportation lines to connect suburban residential areas to urban work centers). NIMBYs are often “not opposed” to the implementation of these policies in principle—just not in any way that could affect them or the value of their property. As a widespread social view, it is easy to see how this could restrict the development of policies that could solve the problem.

What’s being done to increase housing supply?

In order to combat the rising cost of housing and the growing housing shortage, the Biden administration announced the Housing Supply Action Plan in May 2022. This plan intends to close America’s housing supply shortfall within the next five years through administrative and legislative policies authorizing the creation and preservation of hundreds of thousands of affordable housing units.

Specifically, the administration plans to:

• Reward jurisdictions that have reformed zoning and land-use policies with higher scores in certain federal grant processes;
• Deploy new financing mechanisms to build and preserve more housing where financing gaps currently exist;
• Expand and improve existing forms of federal financing;
• Ensure that more government-owned supply of homes and other housing go to owners who will live in them or non-profits who will rehab them; and 
• Work with the private sector to address supply chain challenges and improve building techniques to finish construction in 2022 on the most new homes in any year since 2006.

The administration anticipates that these steps, in addition to actions they announced last September to build and rehabilitate 100,000 homes over the next three years, will ease the burden of housing costs for families and close the housing shortfall over the next few years. Regarding state and local zoning and land-use laws and regulations specifically, the Biden administration aims to immediately incentivize state and local jurisdictions to reform their policies by implementing the following:

• Leveraging transportation funding from the Bipartisan Infrastructure Law (BIL);
• Integrating affordable housing into Department of Transportation Programs; and
• Including land use within the U.S. Economic Development Administration’s (EDA) investment priorities that enhance density in the vicinity of the development.

What’s left to do and why is it important?

The Housing Supply Action Plan put forward by the Biden administration is indeed a step in the right direction. But there is still a long way to go before we address the root conditions that led us to the housing supply crisis. The incentivization of zoning law reform is useful, but there is no guarantee that relying on directional nudges will lead to substantive policy change; direct changes to federal zoning laws and land-use policies would go further in the right direction. The revitalization of programs to build more high-quality public housing and direct assistance for low- and middle-income families to secure those homes, could also go further toward addressing the housing affordability crisis. 

There are still discriminatory practices depressing Black and brown families’ access to homeownership, and the value of Black and brown homes upon securing access to homeownership. These practices of institutional bias and discrimination need to be rooted out as well if homeownership is ever to be truly accessible and fair for all Americans.

At a more macro level, we need a stronger social safety net for American families in general, so that homeowners are no longer incentivized to pit their economic well-being against their neighbors’ access to an essential human need like shelter. Ultimately, we will need a wide range of bold policy efforts to change the way we provide American families with homes.

Summary: Race-neutral policies are harmful for achieving true racial equity and justice. We must acknowledge and tackle the barriers posed by systemic racism with race-conscious policies that target the intersection of race, class, and gender. Following are key reasons why we need to combat the harms of race-neutral policy with race-conscious policies to build a racially just economy and how those policies should be structured:

• The persistent and in some cases widening gaps between economic outcomes for Black and white Americans are largely due to structural racism; racism that is entrenched within the very fabric of our customs, laws, systems, and institutions.
• Race-neutral policies—such as equal protection civil rights laws—fail to reverse the gaps and barriers that exist because of structural racism.
• Only race-conscious policies—policies that may disproportionately help communities of color—can dismantle the structural barriers to prosperity, safety, and equity for Black Americans.
• Equitable policymaking must not only be race conscious but also target the intersection of race and class—particularly regarding criminal justice policy and combatting mass incarceration.
• Race-neutral policy such as the drive to eliminate affirmative action threatens racial equity in the states.
• The acute gaps between the economic well-being of Black women and white men demonstrate the need for race-conscious policies that target the intersection of race and gender.

Introduction: Racial disparities persist despite civil rights laws

Over 50 years ago, the civil rights era ushered in numerous transformative policies that sought to give people of color equal access to various social and democratic institutions free from explicit discrimination based on race. This includes voting, education, employment, and much more. Although the civil rights legislation and the anti-discriminatory laws that followed had put an end to legally sanctioned discrimination and segregation, it continued, and racial economic disparities not only persisted, but many grew worse over time (Jones, Schmitt, and Wilson 2018; Kuhn, Schularick, and Steins 2019). The persistent and in some cases widening gaps between economic outcomes for Black and white Americans are largely due to structural racism; racism that is entrenched within the very fabric of our customs, systems, and institutions—even as rules and laws that once denied rights and opportunities to people of color have been repealed (Solomon, Maxwell, and Castro 2019).

Race-neutral policies neglect reality and history

The premise that civil rights laws can eradicate racism within institutions founded on the doctrine of racism is not only a common fallacy, but harmful in achieving true racial equity and justice. It leads to the myth of race-neutral policy—the notion that if all groups are seen as equal under the law all will share equitably in social and economic benefits. This notion dismisses centuries of racist policies that have created and reinforced structural barriers to prosperity, safety, and equity for these groups.

For example, while the Fair Housing Act—Title VIII of the Civil Rights Act of 1968—outlaws housing discrimination based on race, color, religion, national origin, sex, disability, or familial status,1 it “has never fully delivered on its promise to promote and further integration” (Adams 2018). As just one example of the gap between the promises of the act and the reality, decades later African Americans still face disparately low rates of homeownership, as shown in Figure A.

Figure A

As of 2021, the homeownership rate for Black people is approximately 45%—nearly 30 percentage points lower than the white U.S. homeownership rate of approximately 74% (U.S. Census Bureau 2022). While there are many factors that may play a role in the low Black homeownership rate, one key factor is the racist history of redlining—the practice in which lenders deny mortgage loans or other services to communities of color. Despite the intention of prohibiting discrimination by outlawing redlining (and other practices, such as real estate agents steering Black buyers away from white neighborhoods), the Fair Housing Act only mitigated the harm inflicted on communities of color by outlawing future racist policies. The act did not tackle the residential patterns—such as the segregation into neighborhoods with lower price appreciation and less investment—that resulted from the past policies (Rothstein 2017).

Consequently, disparities in wealth and numerous other indicators connected to homeownership and residential patterns continue to grow while the economy leaves communities of color further behind. These race-neutral policies neglect the reality and history of race and the role it has played in stripping communities of color from opportunity.

Policies that may disproportionately help communities of color are critical to building a more racially just society and economy because historically communities of color have been socially, economically, and politically disempowered. Our country isn’t race-neutral despite efforts to push race-neutral policy. Without targeted policies to address the structural barriers in access and equity, lawmakers will struggle to advance restorative policies that can truly combat racial disparities.

Policy must target the intersection of race and class

A crucial component to equitable policymaking is using the intersection of race and class as a policy target. Throughout U.S. political history, there have been a plethora of policy initiatives that were designed to lift only members of a disadvantaged socioeconomic group without acknowledging the racial component, thus failing to address long-standing inequity—or vice versa. Criminal justice reform policies have been prime examples of legislation that fails to address both race and class while also reifying the inequities present at the intersection of race, class, gender, and criminality (Hankivsky and Cormier 2011).

For most of the 20th century, the criminal justice system has magnified and reinforced the growing racial divide in America. Over the last 40 years, the incarcerated population has increased by 500%, with 2 million people in prison and jail today (The Sentencing Project 2021). The steep increase in the prison population can be largely attributed to many of the policies passed in the 1970s—including the war on drugs legislation—and maintained over the subsequent decades that disproportionately hurt Black and brown people and established what we know today as mass incarceration (Taifa 2021).

Currently, within state prisons alone, Black people are incarcerated at nearly five times the rate of white Americans and hold a state average incarceration rate of 1,240 per 100,000 residents (Nellis 2021). Clearly the link between race and mass incarceration is evident. However, research suggests that while racial discrimination is explicit within the criminal justice system, the class composition of each racial group is strongly correlated with the big overall gap in Black and white incarceration rates (Lewis 2018). In reviewing rates of incarceration by race and income quintiles, the analysis indicates that 42% of observed incarcerated Black men were in the lowest class group versus just 15% of white men (Lewis 2018). This analysis indicates that these disparities are largely due to a racialized class system. For policymakers to craft meaningful criminal justice reform, legislation must address the systemic racial legacy of mass incarceration and the root causes of race and class divide through economic empowerment.

Policies must embrace both race and class as policy targets to achieve race-conscious efforts and policy solutions. Advancing race-conscious policies is critical to restoring equity and dismantling structural injustice for people of color.

Race-neutral policy threatens racial equity in the states

Race-conscious policies are just as important on state and local levels as on a federal level. For years, states have been the battleground on whether to advance race-neutral and race-conscious policies. Recent debates over race-neutral policy have concerned affirmative action in higher education. Affirmative action is a set of policies and practices within government or an organization that seeks to boost participation of underrepresented groups (based on their race, gender, sexuality, or nationality) in specific areas such as college admissions or managerial ranks. Affirmative action decision-making in employment and education is a useful way to implement race-conscious practices that address inequities springing from historical barriers for marginalized people. However, over the past several years, affirmative action has been under attack in the higher education space as some believe race shouldn’t be a factor for admission into a school or program.

Within the past few years, Harvard University has been under legal attack to ban affirmative action in its admission process despite the literature available indicating that schools that rely on race-neutral policies and abandon affirmative action decision-making are less accessible and less diverse to underrepresented students of color (Burgess 2020). Beyond higher education school boards, state and local policymakers and voters have also been apprehensive about enforcing race-conscious decision-making in schools. For example, voters in California recently rejected a ballot measure that would have restored the state’s affirmative action policy, suggesting broad public unease with race-conscious decision-making (Cineas 2020).

In systems and institutions like higher education with a history of long-entrenched racial segregation and discrimination, race-conscious policies are pivotal in enhancing the representativeness, diversity, and educational outcomes of people of color. State and local policymakers play a large role in advancing these policies and ensuring equitable and comprehensive pathways for people of color to fully participate in historically inaccessible institutions.

Policies must also look at the intersection of race and gender

Across measures of income, wealth, employment, and health, Black women face some of the most acute disparities with white men. For example, on an average hourly basis, Black women are paid just 66 cents on the dollar relative to non-Hispanic white men with the same level of education and age (Wilson and Kassa 2020). These disparities are especially problematic given that, with an increasing share of women also being the sole breadwinners for their households, Black women carry a significant amount of the economic cost (Glynn 2019). Black women are also more likely to face occupational segregation that limits their access to higher-paying jobs (Wilson, Miller, and Kassa 2021). Despite these specific barriers, Black women also endure the costs of caregiving, child care, and student loan debt, which also constrain women’s prosperity.

Due to the combination of many of these factors, Black women constitute one of the most vulnerable groups in our economy and society. Policies to protect and uplift women may not always address the intersectional needs of Black women nor combat the structural racist and patriarchal impediments they face. Intersectionality and disaggregation within race-conscious policies is integral in identifying and addressing the barriers that exist within subpopulations of racial groups including gender. We need disaggregated race data to truly aid in identifying the inequities, documenting the harm, and advancing equitable and comprehensive policies to address the inequities.

Conclusion

After centuries of systemic exclusion of Black Americans from full participation in our society and economy, targeted, intersectional, race-conscious policies to ensure full participation are long overdue. Without these policies, laws will only mitigate—but not dismantle—the barriers that racist and discriminatory laws and policies have reinforced. The inclusion of race, class, and disaggregated gender disparities as policy targets are critical in advancing race-conscious policies on both federal and state levels. The true myth of race-neutral policy is the unwillingness to acknowledge or address the racist history within our country, our economy, and our society as well as the long-standing effects that systemic racism has on communities of color.

Additional reading and resources

Readers interested in delving deeper into the issues touched on in this chapter are encouraged to explore the following resources suggested by the author.

Endnote

1. In addition to discriminatory home sales practices such as redlining, the act outlaws discriminatory practices in a range of rental and housing-financing activities. See National Fair Housing Alliance 2021.

References

Adams, Michelle. 2018. “The Unfulfilled Promise of the Fair Housing Act.” The New Yorker, April 11, 2018.

Burgess, Tiffani. 2020. “Race-Conscious Policies—Including Affirmative Action—Are Necessary for Addressing Racial Inequity.” American Civil Liberties Union, December 1, 2020.

Cineas, Fabiola. 2020. “Affirmative Action Just Lost in California—Again.” Vox Media, November 4, 2020.

Glynn, Sarah Jane. 2019. Breadwinning Mothers Continue to be the U.S. Norm. Center for American Progress, May 2019.

Hankivsky, Olena, and Renee Cormier. 2011. “Intersectionality and Public Policy: Some Lessons from Existing Models.” Political Research Quarterly 64, no. 1 (2011): 217–29. http://www.jstor.org/stable/41058335.

Jones, Janelle, John Schmitt, and Valerie Wilson. 2018. 50 Years After the Kerner Commission: African Americans Are Better Off in Many Ways but Are Still Disadvantaged by Racial Inequality. Economic Policy Institute, February 2018.

Kuhn, Moritz, Mortiz Schularick, and Ulrike I. Steins. 2019. Income and Wealth Inequality in America. Centre of Economic Policy Research, December 2019.

Lewis, Nathan. 2018. Mass Incarceration: New Jim Crow, Class War, or Both? People’s Policy Project, January 2018.

National Fair Housing Alliance. 2021. “Fair Housing Act” (web page). Last updated July 16, 2021.

Nellis, Ashley. 2021. The Color of Justice: Racial and Ethnic Disparity in State Prisons. The Sentencing Project, October 2021.

Rothstein, Richard. 2017. The Color of Law: A Forgotten History of How Our Government Segregated America. New York: Liveright.

Solomon, Danyelle, Conor Maxwell, and Abril Castro. 2019. Systematic Inequality and Economic Opportunity. Center for American Progress. August 2019.

Taifa, Nkechi. 2021. “Race, Mass Incarceration, and the Disastrous War on Drugs.” Brennan Center for Justice, May 10, 2021.

The Sentencing Project. 2021. “Criminal Justice Facts” (web page). Last updated June 3, 2021.

U.S. Census Bureau, Current Population Survey/Housing Vacancy Survey. Various years. Public data series accessed through the Housing Vacancies and Homeownership (CPS/HVS) data tables. Accessed January-February 2022.

Wilson, Valerie, Ethan Miller, and Melat Kassa. 2021. “Racial Representation in Professional Occupations: By the Numbers.” Economic Policy Institute, June 2021.

Wilson, Valerie, and Melat Kassa. 2020. “Black Women Workers Are Essential During the Crisis and for the Recovery but Still Are Greatly Underpaid.” Working Economics Blog (Economic Policy Institute), August 12, 2020.