Table 1

The benefits of raising the minimum wage

Raising the minimum wage is a research-backed policy that increases earnings for low-wage workers without causing increases in unemployment or other negative economic side effects. A strong wage floor is also a powerful tool for making a more equitable economy. Almost two-thirds of the workers who would be affected by SQ 832 are women (63.3%). The policy would also disproportionately benefit workers of color. Hispanic workers make up 18.2% of the affected workers, compared with 11.0% of the total Oklahoma workforce. Black workers would be 10.6% of affected workers, while only making up 7.1% of the workforce (see Table 3).

The policy would also provide critical support to workers experiencing significant economic insecurity. Nearly three-fifths (59.3%) of the affected workers have incomes below 200% of the poverty line. Research shows that raising the minimum wage significantly reduces poverty, even as higher wages simultaneously reduce some workers’ and families’ eligibility for, and reliance on, public assistance programs.

A higher minimum wage would help combat the affordability crisis

While dozens of states and cities have passed minimum wage increases over the past 15 years, Oklahoma is one of 20 states that still uses the dismally low federal minimum wage of $7.25 an hour. Policymakers have not raised the federal minimum wage since July 2009, meaning that as prices throughout the economy have risen, the buying power of a paycheck at the federal minimum wage has fallen—substantially. Adjusting for inflation, the federal minimum wage is worth 30% less than it was in 2009. In fact, since 2025, the federal minimum wage has officially been a poverty-level wage under the Department of Health and Human Services’ guidelines. The stagnant federal minimum wage is one example of how economic policy in recent decades has suppressed workers’ wage growth, squeezing them as prices have continued to rise and creating the affordability crisis.

Fortunately, SQ 832 would not only raise the state minimum wage to more adequate levels, but also automatically adjust it for inflation beginning in 2030. Twenty-one states already use these automatic increases to ensure that low-wage workers don’t lose ground over time as prices rise.

SQ 832 would go a long way toward improving conditions for the lowest-paid workers in the state as they contend with rising housing, energy, and health insurance costs. However, the reality is that most Oklahoma workers face higher living costs than can be supported by a $15-per-hour wage. Figure A shows estimates of a living wage for a single adult in different Oklahoma metro areas using EPI’s Family Budget Calculator. All Oklahoma metro areas have living wages above $16 an hour. Workers in Tulsa, Oklahoma City, and Lincoln County must earn at least $18 an hour to meet the Family Budget Calculator threshold. Even the lowest-cost county in the state (McIntosh County, not shown) has a living wage greater than $15 an hour.

Figure A

SQ 832’s $15 target would help hundreds of thousands of Oklahoma workers earn closer to a living wage and put Oklahoma’s wage standards more in line with many other states. As of January 2026, 17 states and the District of Columbia had at least a $15 minimum wage—including states such as Arizona, Missouri, and Nebraska.

Lawmakers and voters in many states have adopted higher state and local minimum wages both in response to federal inaction and because economic research has reached a strong consensus that raising the minimum wage, at least to levels attempted thus far, has not caused any measurable harm to employment.  

A $15 minimum wage in Oklahoma is not an outlier compared with policies in other states, even after accounting for differences in the labor markets of different jurisdictions. Economists use the minimum-to-median wage ratio (sometimes called the Kaitz index) to assess the “bite” or strength of the wage floor relative to wage levels in the area where the policy is taking place. This measure allows us to see how a $15 minimum wage compares in New York and Oklahoma, where the overall distribution of wages is substantially different. Most minimum wage research has studied policies with minimum-to-median wage ratios of .67 or less (i.e., a minimum wage raised as high as two-thirds the median wage in the same jurisdiction.) Table 2 shows the current and projected path of Oklahoma’s minimum-to-median wage ratio if SB 832 passes. The ratio would grow as the policy goes into effect, but it would likely never exceed 60%—meaning it is solidly in the range of policies that economists have studied and found no negative effect on employment.

Table 2

Oklahoma’s current minimum wage suppresses pay for workers

Establishing and periodically raising a strong wage floor is necessary to counteract employers’ excess market power over workers, which keeps wages lower than they would be in a truly competitive market. Workers face a multitude of barriers which provide wage-setting leverage for employers. Workers often have limited information about wages and work policies at alternative employers and can be constrained in their job choices by limited transportation options or the need to maintain specific schedules for child care and other family needs. Low-wage workers typically have less financial ability than higher-wage workers to overcome these obstacles, and are more likely to encounter take-it-or-leave-it wage offers that prevent them from negotiating pay. These challenges (sometimes called “frictions”) add up, providing leverage for employers to pay lower wages than workers need—and lower than what is optimal for the local economy.

Oklahoma’s weak wage floor suppresses pay for hundreds of thousands of workers. The state has the third-highest share of workers earning less than $15 an hour (21%). Although there are relatively few workers who earn exactly $7.25 an hour, one undervalued benefit of a strong wage floor is that it supplies upwards pressure on the wages of low-wage workers who earn more than the minimum wage. These “spillover effects” mean that workers above the new minimum wage threshold also see wage increases as employers adjust other workers’ pay to maintain wage ladders and preserve seniority.

Oklahomans have a consequential opportunity to strengthen the wage floor and deliver a meaningful raise to hundreds of thousands of workers. A $15 minimum wage is evidence-backed, both by rigorous economic research and the recent experience of many other states. SQ 832 would support families as they struggle with the affordability crisis and generate lasting improvements to the health and equity of the economy.

Table 3

This interactive chartbook provides a statistical snapshot of race and ethnicity in the United States, depicting racial/ethnic disparities observed through

• Population demographics
• Civic engagement
• Labor market outcomes
• Income, poverty, and wealth
• Health

The chartbook also highlights some notable intersections of gender with race and ethnicity, including educational attainment, labor force participation, life expectancy, and maternal mortality. The findings are bracing, as they show how much more work we need to do to address longstanding and persistent racial inequities.

Most charts include data for five racial/ethnic groups in each of the charts—white, Black, Hispanic, Asian American and Pacific Islander (AAPI), and American Indian and Alaska Native (AIAN). In the charts and text, “Americans” refers to all U.S. residents, regardless of citizenship status.

Researchers seeking disaggregated data and statistics for AAPI and AIAN groups are encouraged to look at sources cited in the companion essays in the Anti-Racist Economic Research and Policy Guide: AAPI Data and the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis.

As our efforts illustrate, collecting and maintaining data sources that are representative of the entire U.S. population is an essential first step toward overcoming the invisibility, neglect, and lack of understanding experienced by many communities of color. Future work on this project will involve identifying comparable data from alternative sources that fill in as much of the missing information in the chartbook as possible.

In this interactive chartbook, additional notes and source information can be accessed by clicking on the ellipses ( … ) in the notes and sources lines under the charts.

Population demographics

The U.S. has become more racially and ethnically diverse over the last two decades: Share of U.S. population by race and ethnicity, 2000, 2010, and 2020

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Each decennial Census since 2000 has revealed a more racially and ethnically diverse U.S. population. While the share of people who identify as Black (about 12%) or American Indian and Alaskan Native (0.7%) has remained constant, the non-Hispanic white share of the population has declined from 69.1% in 2000 to 57.8% in 2020. On the other hand, a growing share of U.S. residents identify as Hispanic (increasing from 12.5% in 2000 to 18.7% in 2020) or Asian American and Pacific Islander (increasing from 3.7% in 2000 to 6.1% in 2020). These changing population demographics reflect different trends in birth, mortality, and immigration rates across groups. Since 2000, there have also been significant changes in how people identify racially. Notably, a growing share of people identify as being of two or more races (this would include people who, for example, identify as Black and AAPI, but would not include people who identify as Black and Hispanic, as they are identifying Black alone as their race and Hispanic as their ethnicity). Also, a growing but still small share of people identify as being of a race other than those explicitly defined by the Office of Management and Budget (OMB).

As Trevon Logan notes in his essay, it is the OMB that issues regulations regarding the classifications of race and ethnicity by federal agencies, including the U.S. Census Bureau, which conducts the major household and business surveys used by researchers. There are six permitted race categories and two ethnicity classifications, Hispanic and non-Hispanic. As such, everyone is a member of both a race and ethnicity. For more on the current classifications, see Logan’s essay.

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While U.S. residents are overwhelmingly citizens, Asian American/Pacific Islander and Hispanic citizens are more likely to be first-generation immigrants: Share of U.S. population by race/ethnicity and nativity, 2024

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Across all racial and ethnic groups, an overwhelming majority of people in the United States are U.S. citizens, according to data from the Current Population Survey. However, nativity shares vary across racial groups. White persons (95.9%), American Indian and Alaskan Native (AIAN) persons (81.3%), and Black persons (88.6%) are most likely to have been born citizens (born in the United States or to United States citizens abroad), compared with over half of the Hispanic population (66.7%) and more than one-third (37.8%) of the Asian American and Pacific Islander (AAPI) population.

Immigration status also varies widely. AAPI residents are most likely to be immigrants: more than one-third (38.3%) were not born U.S. citizens but became U.S. citizens (i.e., are naturalized U.S. citizens), while another 23.9% are not citizens. Hispanic residents are next most likely to be immigrants: 12.6% are naturalized citizens and 20.7% are not citizens. These statistics highlight only a fraction of the diversity represented within and across different racial and ethnic groups. As several essays in the Advancing Anti-Racist Economic Research and Policy guide explain, analyses that use categories or group descriptions that are too broadly defined can lead to inaccurate conclusions.

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The uneven geographic distribution of racial and ethnic populations highlights the influence of state and local policy on racial inequality: Share of state population by race and ethnicity, 2020

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The U.S. Census Bureau projects that Black, Hispanic, AAPI, and other people who do not identify as white will collectively account for over half of the population of the United States by 2044. In California, Hawaii, Maryland, Nevada, New Mexico, Texas, and the District of Columbia, the white population is already in the minority, and in Arizona, Florida, Georgia, New Jersey, and New York, white persons make up just over half of the population. This interactive map shows areas of population density for each race or ethnic group (click on a race or ethnic group) along with the racial and ethnic distribution of each state’s population (click on a state). It shows that Southern states and the District of Columbia have the largest shares of residents who are Black, with the highest shares in the District of Columbia (40.9%), Mississippi (36.4%), and Louisiana (31.2%). Southwestern and Western states are home to a large percentage of Latinos, with the highest shares in New Mexico (47.7%), Texas (39.3%), and California (39.4%). AAPI residents, including Native Hawaiians, predictably account for nearly half (46.8%) of the population of Hawaii but are also a significant share of the population in California (15.5%) as well as New Jersey and Washington state (10.2% each). Also, as the group’s name would indicate, American Indian and Alaska Native residents account for the highest share of the population in Alaska (14.8%), followed by New Mexico (8.9%), South Dakota (8.4%), and Oklahoma (7.9%). White Americans account for the largest majority of the population in several Northeastern states (90.2% in Maine, 89.1% in Vermont, and 87.2% in New Hampshire) and West Virginia (89.1%).

The patterns illustrated in the map trace each group’s unique history of settlement, immigration, and migration in this country. But they also help to make a point about the important role that state and local policies play in either improving or worsening racial disparities in the United States. As just one example, EPI research shows that Southern states, which have a high density of Black residents, are more likely than states in other regions to use preemption laws to stop local governments from setting strong labor standards, such as raising the minimum wage and guaranteeing paid sick leave.

For more on preemption laws in the South, see Hunter Blair et al., 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.

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Current population demographics by race/ethnicity and age support projections that people of color will become the collective majority by 2050: Share of U.S. population within given age ranges, by race and ethnicity, 2024

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The changing racial and ethnic makeup of the U.S. population is foretold in the age distribution of different racial and ethnic groups. In 2024, over a quarter (28.9%) of people who identified as Hispanic were under the age of 18, as were about a quarter of those who identified as Black (24.5%), American Indian and Alaska Native (AIAN) (27.9%) and a fifth within those who identified as Asian American and Pacific Islander (19.9%). A smaller share of the white population (17.8%) belonged to this younger age cohort while over a third (36.9%) of white residents were near or at retirement age (age 55 or older)—a much larger share than for other racial and ethnic groups. As the current population ages, the older population will remain predominantly non-Hispanic white while Black, Hispanic, AAPI, and AIAN persons will be a growing share of the younger population. This racial and ethnic generation gap will require balancing the interests of a younger, less wealthy, more racially and ethnically diverse population with those of an older, wealthier, predominantly white population. However, these generations are linked in important ways. Older workers and retirees have a stake in worker, economic, and racial justice for those younger workers who in the years ahead will be a growing share of workers driving the national economy and providing many of the services the aging population relies on. Census population projections from 2022 (the latest available) indicate that in 2050, non-Hispanic white persons will account for less than half (48.4%) of the U.S. population (see U.S. Census Bureau, 2023 National Population Projections Tables, Table 4).

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Men’s educational attainment is highly stratified by race and ethnicity, with American Indian and Alaska Native, Hispanic, and Black men most likely to be “working class”: Share of men aged 25 and older within given level of educational attainment, by race and ethnicity, 2024

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The term working class has been used to describe working-age adults who have less than a bachelor’s degree. Based on their high shares without a bachelor’s degree or more education, American Indian and Alaska Native (AIAN) (85.3%), Hispanic (80.9%), and Black (76.5%) men are more likely to be considered working class (under this definition) than are white (60.3%) or Asian American and Pacific Islander (AAPI) (40.7%) men. Even among the groups of men most likely to be considered working class, there is still a wide range of educational attainment that includes everything from less than a high school diploma to some college. The some college category includes attendance at a four-year or two-year institution, but no degree; it also includes completion of a two-year associate or technical degree. The groups with the highest shares of people with less than a high school education are Hispanic men (27.6%) and AIAN men (23.5%) and 57.7% of Hispanic men and over half of AIAN men (58.2%) have no education beyond high school. While about half (47.0%) of Black men also have no education beyond high school, Black men are more likely than either Hispanic or AIAN men to have a bachelor’s or advanced degree, but still much less likely to have that level of education than either white or AAPI men. AAPI men lead all other racial groups in the share (59.2%) who have a bachelor’s or advanced degree. These patterns of educational attainment are shaped by multiple factors, including differences in immigration policies applied to Asian versus Latin American countries, as well as the legacy of racial discrimination and oppression that severely limited educational opportunities for generations of Black and Native Americans.

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Most women have more than a high school education, but Latinas and AIAN women lag behind other groups in attaining higher education: Share of women aged 25 and older within given level of educational attainment, by race and ethnicity, 2024

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In 2024, across most racial and ethnic groups, at least half of women aged 25 or older had some education beyond a high school diploma. Latinas were the exception—only 49.1% had some level of education beyond high school and 24.2% had less than a high school education, a much higher percentage than any other group of women (1.2 to nearly 5 times as much). Those women least likely to have a bachelor’s or advanced degree were American Indian and Alaskan Native (AIAN) women (19.7%) and Latinas (23.9%). Asian American and Pacific Islander (AAPI) and white women had the highest levels of educational attainment with 56.9% of AAPI women and 41.8% of white women having at least a bachelor’s degree, followed by 29.9% of Black women. As with men, these patterns of educational attainment are shaped by multiple factors, including differences in immigration policies applied to Asian versus Latin American countries, as well as the legacy of racial discrimination and oppression that severely limited educational opportunities for generations of Black and Native Americans. But compared with male educational attainment by race and ethnicity women tend to have higher levels of educational attainment (see Chart 5).

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While the Black and AIAN imprisonment rate has decreased, Black and AIAN people are still five times as likely as white people to be imprisoned: Imprisonment rates per 100,000 U.S. residents by race and ethnicity, 2012–2022

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In response to the demand for criminal justice reform and a shift away from the “tough on crime” politics of the 1980s and 1990s, imprisonment rates for Black, American Indian and Alaska Native (AIAN), Hispanic people have fallen over the last decade. But Black, AIAN, and Hispanic people are still much more likely to be incarcerated than white people, whose imprisonment rate has stagnated over the past decade. Over 1,000 out of every 100,000 U.S. residents who are Black or American Indian and Alaska Native (AIAN) were imprisoned in 2023, followed by 603 out of 100,000 Latino U.S. residents, 229 out of 100,000 white U.S. residents, and 88 out of 100,000 Asian American and Pacific Islander U.S. residents. Thus, the approximately 1.8 million people held in U.S. prisons at the end of 2022 —an often-forgotten segment of the U.S. population—are disproportionately Black, AIAN, Hispanic, and other people of color. 

Data on the size of the overall incarcerated population come from the “Correctional Populations in the United States, 2022—Statistical Tables” published by the U.S. Department of Justice in May 2024. 

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Black and AIAN men have an exceptionally high imprisonment rate: Imprisonment rates per 100,000 U.S residents, by race/ethnicity and gender, 2022

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This chart makes two facts very clear: That imprisonment in the United States is not only a gendered issue—with men being much more likely to be imprisoned—but also an issue of racialized gender, with Black and American Indian and Alaska Native (AIAN) men being far and away the most highly imprisoned group. Among women, AIAN residents had the highest imprisonment rate (173 per 100,000), followed by Black residents who had an imprisonment rate (64 per 100,000) in 2022. AIAN women were almost three times as likely to be imprisoned as Black women, around four times as likely to be imprisoned as White and Hispanic women, and 34 times as likely to be imprisoned as AAPI women. Among men, Black residents had the highest imprisonment rate (1,826 per 100,000), followed by AIAN men (1,443 per 100,000). Black men were more than twice as likely to be imprisoned as Hispanic men, more than five times as likely to be imprisoned as white men, and almost 13 times as likely to be imprisoned as AAPI men. AIAN men were almost twice as likely to be imprisoned as Hispanic men, more than four times as likely to be imprisoned as white men, and more than ten times as likely to be imprisoned as AAPI men.

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Civic engagement

Consistently higher turnout among white voters was challenged by historic Black voter turnout in 2012 and, to a lesser extent by historic Hispanic and Asian voter turnout in 2020: Voter turnout in presidential election years by race and ethnicity, select years 1992 to 2024

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The right to vote is the most powerful right of U.S. citizenship—and widespread voter participation is essential to a functional democracy. Yet many U.S. citizens ages 18 and older do not vote. Data on voter participation during presidential election years since 1992 reveal that turnout varies significantly by race and ethnicity and changes over time. Since 1992, voter turnout has typically been highest among white voters—ranging from 60.7% to 70.9%—although Black voter turnout saw a huge increase in 2008 and 2012 during the election and reelection of the nation’s first Black president, Barack Obama. In fact, 2012 was the only election in which Black voter turnout (66.2%) exceeded white voter turnout (64.1%). Hispanic and Asian voter turnout was less than 50% in all presidential election years between 1996 and 2016, until both groups had the largest turnout in decades in 2020 (53.7% and 59.7% respectively). In the 2024 presidential election, voter participation declined among Black, Hispanic and AAPI adults. While one’s personal decision to participate in an election can be influenced by any number of factors—including enthusiasm about a particular candidate or confidence in the democratic process—rampant forms of voter suppression in some states undoubtedly contribute to these disparities as well.

For more on the impact of state laws that limit access to voter registration, revoke the right to vote for returning (formerly incarcerated) citizens, or otherwise make it more difficult for certain populations to cast a ballot, see “State Voting Laws,” Brennan Center for Justice, accessed May 5, 2022;  “State Voting Rights Tracker,” Voting Rights Lab, accessed May 5, 2022.

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Amid dramatic decline in union membership since the 1970s, Black workers have held onto the highest rate of union membership for decades: Union membership rates, by race and ethnicity, 1973–2024

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Like the constitutional right to vote in civil society, union membership gives workers a voice—in this case, a voice at work. But as the chart shows, since 1973, union membership has declined for all racial and ethnic groups. Union membership is an important metric of the state of the American worker given the role that labor unions play in giving workers a stronger, collective voice to advocate for higher pay, better benefits, and training and promotional opportunities, as well as protections against discrimination and harassment. In a unionized workforce, for example, collective bargaining results in labor contracts that help to create greater transparency through clearly defined policies and pay structures. These contracts help reduce the potential for pay discrimination by limiting an employer’s discretion in paying different wages to comparably qualified individuals doing the same job and by providing workers with critical protections and direct recourse against other forms of exploitation or mistreatment. The benefits of union membership are a likely contributor to the higher union membership rate of Black workers, given their long history of unequal treatment relative to other groups of workers. Between 1973 and 1980, Hispanic workers also had higher rates of union membership than white workers. While the subsequent across the board decrease in union membership has brought union membership rates by race and ethnicity closer together, in 2024, Black workers were still more likely to be union members (11.7%) compared with white workers (10.0%), Asian American and Pacific Islander workers (8.9%), and Hispanic workers (8.5%).

Still, the labor movement, like any other U.S. institution, is not immune to racism. Unions must continue to become more diverse, inclusive, and dynamic as they serve the vital role of leveling the playing field for all workers.

For more on the benefits and protections conferred by union membership, see Celine McNicholas et al., Why Unions Are Good for Workers—Especially in a Crisis Like COVID-19, Economic Policy Institute, August 2020 and Valerie Wilson, “The Costs of Racial and Ethnic Labor Market Discrimination and Solutions That Can Contribute to Closing Employment and Wage Gaps,” testimony before the U.S. House of Representatives Select Committee on Economic Disparity and Fairness in Growth, January 20, 2022.

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Labor market

Black women have maintained the highest labor force participation rate amid post-1970 rise in women’s labor force participation overall: Labor force participation rate for women by race and ethnicity, 1973–2024

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The labor force participation rate is an important indicator of economic well-being. It shows the number of people in the labor force—people who are employed or unemployed but looking for work—as a share of the number of civilian, noninstitutionalized people ages 16 and older. Across racial and ethnic groups, women’s labor force participation rose significantly from the 1970s through the 1990s for a number a reasons: increased access to higher education, and the introduction and widespread availability of the birth control pill, to name a few. After leveling off during most of the first decade of the 2000s, labor force participation by women declined during or after the Great Recession of 2007–2009. And it declined again during the 2020 COVID-19 pandemic and recession as the burden of job losses and care responsibilities disproportionately impacted women. In 2024, Black women had the highest labor force participation rate at 60.5%, followed by Hispanic (58.9%), Asian (58.6%), white (56.7%), and American Indian and Alaska Native women (55.1%). While Latinas have historically had the lowest rates of labor force participation among women, their labor force participation rate had been climbing steadily in the four years leading up to the COVID-19 pandemic. Historically, Black women have had stronger labor force attachments than other groups of women. This is part of the legacy of being forced to work as enslaved people, but the necessity of work has continued for Black women who are often co-breadwinners if not sole earners for their households.

For more on the rise of women’s labor force participation from the 1970s see Elisabeth Jacobs and Kate Bahn “Women’s History Month: U.S. women’s labor force participation”, Washington Center for Equitable Growth, March 22, 2019.  

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Hispanic men have maintained the highest labor force participation rate even as labor force participation of all men has declined since the 1970s: Men’s labor force participation rate by race and ethnicity, 1973–2024

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Across all racial and ethnic groups, men’s labor force participation rates have declined significantly since the 1970s, with the sharpest decline occurring during and since the Great Recession of 2007–2009. While this trend in part reflects an aging population with a growing share of retirees, researchers have suggested that labor force participation has fallen among prime-age men (ages 25–54) due to a rise in serious health conditions that are a barrier to work, the emerging opioid crisis, or technological changes that encourage younger men  (under age 30) to allocate less time to work and more time to leisure activities like playing video games. Unlike with Black women, who have the highest labor force participation rate among women, Black men in 2024 had the lower labor force participation rates than white and Asian men (65.9%). And unlike with Hispanic women, who have historically had the lowest labor force participation rates among women, Hispanic men have had the highest labor force participation rate, which reached 75.5% in 2024. The ranking of men’s labor force participation rates by race and ethnicity has remained constant over the last three decades.

For more on the likely reasons for declining male labor force participation see Alan Krueger, Where Have All the Workers Gone? An Inquiry into the Decline of the U.S. Labor Force Participation Rate, Brookings Papers on Economic Activity, September 2017; and Mark Aguiar et al., “Leisure Luxuries and the Labor Supply of Young Men,” National Bureau of Economic Research Working Paper 23552, June 2017.

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Black and AIAN unemployment is consistently higher than unemployment of all other racial and ethnic groups: Annual unemployment rate by race and ethnicity, 1979–2024

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Relative rates of unemployment by race and ethnicity have been remarkably consistent over time. Typically, the annual unemployment rates of American Indian and Alaska Native (AIAN), Black, and Hispanic workers are significantly higher than those of white workers. The difference between Asian and white unemployment rates is smaller, and the size of the gap fluctuates, as does which group has the lower unemployment rate. In 2024, this pattern held, with an unemployment rate of 6.5% for AIAN workers, 6.0% for Black workers, followed by 5.1% for Hispanic workers, 3.6% for white workers, and 3.5% for Asian workers. While 2023 saw historical low rates for Black unemployment, one of the most enduring features of the U.S. labor market is the roughly 2-to-1 ratio of the Black and white unemployment rates.

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Higher education typically lowers a worker’s chances of being unemployed but does not eliminate racial and ethnic disparities in unemployment rates: Unemployment rate by race/ethnicity and educational attainment, 2024

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A breakdown of unemployment rates by race, ethnicity, and education level shows the limits of educational attainment as a factor in addressing inequitable economic outcomes. As the chart shows, racial and ethnic disparities in unemployment rates exist at every level of educational attainment. And Black workers have the highest rates of unemployment among all groups without a college degree. In fact, even at historically low rates of unemployment in 2024, only the most highly educated Black workers approached anything near unemployment rate parity with their white counterparts. The figure also shows that while education can contribute to better outcomes—unemployment rates are lower for all groups at higher levels of education—education alone does not necessarily create equal outcomes. Reading this chart alongside Chart 13 suggests that differences in the average unemployment rates of racial and ethnic groups can only be partially explained by relative differences in education, skill, experience or local labor market conditions—discrimination remains an undeniable factor.

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Black, Hispanic, and AIAN workers earn lower wages and have smaller gender wage disparities than their white and AAPI counterparts: Median wages by race/ethnicity and gender, 2024

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There are sharp differences in the wages earned by typical workers of different racial groups in the United States. Asian American and Pacific Islander (AAPI) and white workers are paid the highest wages at the median, while Black, Hispanic, and American Indian and Alaska Native (AIAN) workers are paid significantly less. The gender differences are also greater among AAPI and white workers than among Black, Hispanic and AIAN workers. While AAPI and white men far out-earn AAPI and white women, Black and Hispanic men and women have much more similar median wages.

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Even after controlling for education and other factors known to affect earnings, women—particularly Black and Hispanic women—are paid far less than white men: Regression-adjusted hourly wage gaps for women relative to non-Hispanic white men, by race and ethnicity, 2024

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Women of all racial and ethnic groups in the U.S. have a significant pay penalty by virtue of their gender, even when we account for several factors that could reasonably influence a worker’s productivity or wage rate, including education, marital status, age (a measure of potential experience) and geographic area (a measure of local labor market conditions). Black and Hispanic women face an additional pay penalty by virtue of their race or ethnicity. The chart depicts these wage gaps, presented as how much less women make than non-Hispanic white men. The fact that Black and Hispanic women earn about a quarter less than white men on average when calculating regression-adjusted wage gaps mean, then, that the pay penalty is not a result of differences in formal education between those groups of women and white men. One partial explanation for these wage disparities is occupational segregation, by which women of color are more highly concentrated in occupations with low pay, even relative to their education level. However, women of all races and ethnicities also often earn less than men in the same occupation (not shown in the chart), an indication of potential pay discrimination.

For more on occupational segregation and on gender pay gaps by occupation, see Jessica Schieder and Elise Gould, Women’s Work” and the Gender Pay Gap: How Discrimination, Societal Norms, and Other Forces Affect Women’s Occupational Choices—and Their Pay, Economic Policy Institute, July 2016; Emily Carew and Valerie Wilson, “Latina Equal Pay Day: Latina Workers Remain Greatly Underpaid, Including in Front-Line Occupations,” Working Economics Blog, Economic Policy Institute, October 20, 2021; Valerie Wilson, “Black Women Face a Persistent Pay Gap, Including in Essential Occupations During the Pandemic,” Working Economics Blog, Economic Policy Institute, August 2, 2021.

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Income, poverty, and wealth

Racial and ethnic disparities in median household income have been largely persistent across time: Inflation-adjusted median household income (2024 dollars), by race and ethnicity, 1972–2024

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In the United States, households of different racial and ethnic backgrounds bring in significantly different amounts of income and have done so for decades. At the median, Black, Hispanic, and American Indian and Alaska Native (AIAN) households earn the least on an annual basis, while Asian and white households earn the most. It is notable, though, that in 2023, Black households had the highest household income on record and experienced the largest increase in income between 2020 and 2023. Significant gaps in employment opportunities (shown in Chart 13) and lower wage levels (shown in Chart 15) translate into lower incomes among Black, Latino, and AIAN households. Household income is also a function of the number of earners in a household. Though not shown here, past EPI research found that in the pre-pandemic economy, about a third of Black nonelderly households (where the head of household is age 18–64) had two or more earners, compared with nearly half of white and Hispanic nonelderly households. This racial disparity in the number of household earners is not just a function of how many working-age adults live in the household, or family structure, but is another measurable consequence of the persistent 2-to-1 ratio between the Black and white unemployment rates (shown in Chart 13). As income inequality in the United States has increased in general over the past 50 years, disparities between the least and most well-off groups have continued to persist and, in some cases, have grown.  

For more on earners per household by race, see Elise Gould and Valerie Wilson, Black Workers Face Two of the Most Lethal Preexisting Conditions for Coronavirus—Racism and Economic Inequality, Economic Policy Institute, June 2020. For more on increasing income inequality, see Elise Gould, “Decades of Rising Economic Inequality in the U.S.,” testimony before the House of Representatives Ways and Means Committee, Washington, D.C., March 27, 2019.

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Black and AIAN households are more likely to have the lowest annual incomes—under $25,000 per year in 2024: Share of households within given income range by race and ethnicity, 2024

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This chart extends beyond the data on median or midpoint of household income shown in Chart 17 to provide a more detailed look at where different groups fall across the entire household income distribution. In 2024, 22.9% of Black households, 23.3% of American Indian and Alaska Native households, 15.1% of Hispanic households had annual incomes under $25,000, compared with just 11.4% of white households and 9.3% of Asian households. This $25,000 figure is well below the 2024 official poverty threshold for a family of two adults and two children ($31,812). Conversely, 29.3% of Asian households and 17.8% of white households had annual incomes at or above $200,000—the highest income category—compared with only about 6%-10% of Black, AIAN, and Hispanic households.  

Poverty threshold data can be found in the U.S. Census Bureau’s Poverty in the United States: 2024 data tables, published September 09, 2025 

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Persistently elevated AIAN, Black, and Hispanic child poverty rates have thwarted progress reducing overall child poverty in the U.S.: Child poverty rates, by race and ethnicity, 1974–2024

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A cruel and unfortunate reality of structural racism in the U.S. economy is that even in the “best” of economic times, Black, American Indian, and Alaska Native (AIAN), and Hispanic children experience much higher rates of poverty than white children. In 2024, 30.5% of AIAN children, 25.4% of Black children and 20.2% of Hispanic children lived below the official poverty threshold, compared with just 8.2% of non-Hispanic white children 6.4% of Asian children. While child poverty has fallen significantly for Black, Hispanic, and Asian American children over the past 40 years, Black and Hispanic child poverty rates remained over 20% in 2024. Additionally, in 2024, AIAN children had the highest rates of child poverty at over 30 percent (30.5%). This large and persistent disparity in child poverty combined with the fact that Black and Hispanic children have become an increasing share of the underage 18 population over time (see Chart 1 and Chart 4) has resulted in very little change in the overall child poverty rate since 1974. Given the long-term effects of exposure to poverty in childhood, addressing these persistent disparities must play a role in our approach toward building equity and moving the needle on child poverty.

For more on the long-term effects of exposure to poverty in childhood, see Kerris Cooper and Kitty Stewart, “Does Money Affect Children’s Outcomes? An Update,” CASEpapers (203), The London School of Economics and Political Science, July 2017; Randall Akee et al., “Parents’ Incomes and Children’s Outcomes: A Quasi-Experiment,” American Economic Journal: Applied Economics, January 2010.

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Poverty rates are higher among AIAN, Black and Hispanic working-age adults: Poverty rates for age 18–64, by race and ethnicity, 1974–2024

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While poverty across the working-age population (ages 18 to 64) is lower than that for children (see Chart 19), disparities by race and ethnicity follow a similar trend, with American Indian and Alaska Native (AIAN), Black, and Hispanic adults more likely to be impoverished than white and Asian adults. Poverty is a measure of economic deprivation, and among working-age adults in particular, reflects disparities in unemployment, wages, and income. Life circumstances, such as severe disability and major illness—which can also limit earned income or quickly deplete any available savings—also contribute to poverty for this age group. The racially coded misrepresentation of poverty as some kind of moral or cultural pathology has hindered the political will needed to sustain and strengthen vital income supports that have proven effective in fighting poverty.  

For more on the misrepresentation of poverty as a cultural pathology see William “Sandy” Darity Jr., “Revisiting the Debate on Race and Culture: The New (Incorrect) Harvard/Washington Consensus.” Du Bois Review: Social Science Research on Race 8, no. 2, 467–476. For more on the vital income supports that would lessen poverty see Asha Banerjee and Ben Zipperer, “Social Insurance Programs Cushioned the Blow of the COVID-19 Pandemic in 2020,” Working Economics Blog, Economic Policy Institute, September 14, 2021.

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There are large racial disparities in poverty at older ages (65 and older)—likely reflecting differences in retirement preparedness and/or lifetime income disparities: Poverty rates for people ages 65 and older, by race and ethnicity, 1974–2024

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The poverty seen among older Americans in the chart is most likely the result of a lifetime of low earnings and a lack of retirement preparedness. While research shows that Social Security plays a critical role in keeping poverty rates among older Americans lower than they otherwise would have been (not depicted in the chart), older Black, Hispanic, and American Indian and Alaska Native (AIAN) adults still have relatively high poverty rates. Older Asian Americans are also more likely to live in poverty than older white Americans. Additionally, older Asian Americans have higher poverty rates than younger Asian Americans (see Chart 19 and Chart 20). This is likely due to a larger share of older Asian Americans having worked comparatively few years in the United States, or in jobs where they were unable to accumulate the necessary years for Social Security eligibility, leaving them less able to take advantage of work-based social safety net programs like Social Security.

For more on the causes of poverty among older Americans and the capacity of Social Security to lift older Americans—particularly women and people of color—out of poverty, see Kathleen Romig, Social Security Lifts More People Above the Poverty Line Than Any Other Program, Center on Budget and Policy priorities, April 2022. For more on the economic condition of the older Asian American population, see Victoria Tran, “Asian American Seniors Are Often Left Out of the National Conversation on Poverty,” Urban Wire (Urban Institute blog), May 31, 2017.

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Racial wealth disparities are stark and persistent, reflecting a history of exploitation and exclusion: Median family net worth by race and ethnicity, selected years from 1989 to 2022

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The chart shows sharp racial and ethnic disparities in net worth observed across time in the United States. Though not shown in the chart, these disparities reflect the differences in lived economic experiences between white, Black, Hispanic, and Asian families. Wealth can be accumulated both within and across generations, such that a high net worth can result from the benefit of prime earning years with 1) relatively few employment disruptions, 2) access to wealth-building savings and investment vehicles, 3) relatively few serious negative health shocks, and 4) well-timed wealth transfers from parents and grandparents.  The typical white household has many times the wealth of the typical Black or Hispanic household due to 1) their privileged position in the American labor market, which grants them access to more consistent and higher-quality employment opportunities, 2) their more limited exposure to the health risks brought on by poorer living conditions and discrimination, and 3) their history of access to wealth-building opportunities from which other groups have been excluded. 

In 2022, the Survey of Consumer Finances reported household wealth data for the Asian American population for the first time. Asian household wealth far outstrips that of other households in 2022, though this statistic should be couched with appropriate context: Asian Americans are an incredibly diverse group with varying economic circumstances related to, among other things, immigration history and country of origin; moreover, the SCF oversamples households that are likely to be wealthy. Further disaggregation of wealth data by immigration history could be useful in illuminating wealth disparities within the Asian American population.  

For more on the systemic barriers to Black wealth building see Natasha Hicks, Fenaba Addo, Anne Price, and William Darity Jr., Still Running Up the Down Escalator: How Narratives Shape Our Understanding of Racial Wealth Inequality, The Samuel Dubois Cook Center on Social Equity, 2021. For more on the barriers to Hispanic wealth building see Dedrick Asante-Muhammad, Alexandra Perez, and Jamie Buell, “Racial Wealth Snapshot: Latino Americans.” National Community Reinvestment Coalition, September 17, 2021.

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Health

Racial disparities in life expectancy reflect the cumulative disadvantage of living as a minority in the United States: Women’s and men’s life expectancy at birth, by race and ethnicity, 2022

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Racial disparities in life expectancy have been documented as far back as statistics on life expectancy have been recorded in the U.S, with clear and persistent distinctions between privileged groups and disadvantaged groups. That is, rather than groups shifting in their ranking of life expectancy randomly across time, there are distinct patterns in which groups live longer lives than others. In general, Black and AIAN women and men live much shorter lives than white and Asian women and men. 

In 2022, Asian American women and men had the longest life expectancies, at 86.3 years and 82.3 years respectively. AIAN women and men had the lowest life expectancies, at 64.5 years and 71.3 years respectively. This massive gap in life expectancy approaching two decades can be attributed to several factors, many of which are structural and rooted in economic disparity. In recent years, life expectancy gains have disproportionately gone to those in the highest income categories, who are disproportionately white and Asian (see Chart 18). Alongside the history of white supremacy and anti-Black racism in the United States, these economic roots of also help to explain persistent the persistent Black-white gap in life expectancy. That Black-white gap has fluctuated somewhat over the past decade, shrinking due to the impact of opioid-related “deaths of despair” on lowering white life expectancy, and reopening as COVID-19 related mortality disproportionately impacted Black and brown communities. 

Hispanic women and men tend to live longer than white women and men, though that life expectancy advantage has been shown to diminish with subsequent generations of U.S.-born Latinos. This suggests that there may be something uniquely deleterious about living as a minority in the United States.

For more on gaps in life expectancy, effects of the opioid crisis, and Hispanic life expectancy see Congressional Research Service, The Growing Gap in Life Expectancy by Income: Recent Evidence and Implications for the Social Security Retirement Age, CRS Report R44846, July 6, 2021; Helena Hansen and Julie Netherland, “Is the Prescription Opioid Epidemic a White Problem?” American Journal of Public Health 106, no. 12 (December 2016), 2127–2129 (doi: 10.2105/AJPH.2016.303483); Osea Giuntella, “The Hispanic Health Paradox: New Evidence from Longitudinal Data on Second and Third-Generation Birth Outcomes,” SSM – Population Health, vol. 2 (December 2016), 84–89 (doi.org/10.1016/j.ssmph.2016.02.013).

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The Affordable Care Act significantly reduced uninsured rates across racial and ethnic groups, but disparities remain: Uninsured rates by race and ethnicity, 2008–2024

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The Affordable Care Act (the ACA or “Obamacare”) expanded health insurance coverage to middle- and low-income Americans, which disproportionately benefited those groups with the least access—Hispanic Americans and American Indians and Alaska Natives (AIAN), and to a lesser extent Black Americans. Despite the marked improvement in health insurance coverage rates since the implementation of ACA, disparities between groups remain stark, with Hispanic and AIAN uninsured rates double Black rates, and approaching four times as high as the uninsured rates of white and Asian American and Pacific Islanders (AAPI). Early diagnosis and treatment are essential to minimizing the severity of chronic illnesses, and regular health care is important for promoting better overall health. The lack of health insurance often results in a choice to delay receiving health care until one’s condition is critical, contributing to racial disparities in health outcomes and life expectancy.

For more on how the ACA expanded health coverage, particularly to certain groups, see Samantha Artiga, Latoya Hill, Kendal Orgera, and Anthony Damico. “Health Coverage by Race and Ethnicity, 2010–2019,” Kaiser Family Foundation, July 16, 2021; Jesse Cross-Call, Medicaid Expansion Has Helped Narrow Racial Disparities in Health Coverage and Access to Care, Center on Budget and Policy Priorities, October 2020.

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Black mothers are far more likely to die from pregnancy-related causes than are white and Hispanic mothers: Pregnancy-related deaths per 100,000 live births by race and ethnicity, 2023

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Maternal mortality rates are a stark indicator of racial disparities in public health in the United States. Black women are over twice as likely to die from a pregnancy-related cause as white women, almost three times as likely as Hispanic women, and almost four times as likely as Asian women. Although not shown in the chart, these racial disparities persist regardless of a woman’s social or economic status. Health status and differential access to quality prenatal care play a major role in maintaining these disparities, as does structural racism more generally. To adequately address these disparities in maternal health outcomes, we must confront racism and bias in the U.S. health care system and the implications for how health care providers and personnel communicate with and treat patients.

For more on the causes and solutions to Black maternal mortality, see “Working Together to Reduce Black Maternal Mortality,” Centers for Disease Control and Prevention, April 6, 2022.

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AIAN population 1-year estimates and 3-year rolling averages, select charts

Appendix

Appendix

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The broad-based nature of the labor market recovery is most evident when examining the employment-to-population (EPOP) ratio of prime-age workers between the ages of 25 and 54. Unlike the unemployment rate, the EPOP ratio is not influenced by changes in labor force participation since it captures the share of workers during a given period that have a job. The prime-age EPOP ratio is also less influenced by college attendance and the aging of the population when compared with the employment rate of all workers. As shown in Figure A, the employment rate of prime-age Black, Hispanic, AAPI, and AIAN workers hit record highs within the past few years. For example, the share of prime-age Black workers with a job reached a historic peak of 77.7% in 2023.

Figure A

The rapid and sustained labor market recovery also helped deliver stronger wage growth for workers of color (see Figure B). Black workers experienced the fastest wage growth of any group between 2019 and 2024. In fact, Black and Hispanic real wages grew more than three times faster over the last five years than the four decades prior, on an annualized basis. Much of this is explained by low-wage workers (who are disproportionately workers of color) experiencing strong wage growth since 2019, as the tight labor market with low unemployment compelled employers to expand their hiring networks and compete for workers by offering higher wages. 

Figure B

These historic gains should be protected and continued through a policy regime centered on low unemployment and pro-worker, pro-equity policies. Instead, all of these things are now under threat. Since taking office, President Trump has signed several executive orders centered on deporting migrants, including taking actions that will make it harder for migrants to legally work and support their families in the United States. He also signed orders ending critical diversity, equity, inclusion, and accessibility programs within the federal government, which were dedicated to promoting goals of racial and gender equity within the economy and beyond.

Further, President Trump has stifled the Equal Employment Opportunity Commission (EEOC) by illegally firing Commissioners Charlotte Burrows and Jocelyn Samuels, who were appointed by President Biden and confirmed by the Senate. As an independent agency, EEOC commissioners are intended to be insulated from presidential interference once nominated and confirmed. These illegal firings have prevented the EEOC from reaching a quorum to hear cases and fulfill its mission to enforce federal laws that prohibit employment discrimination and harassment.

Beyond these executive actions, the Trump administration has engineered an economic climate of chaos by announcing (and seemingly walking back) a temporary freeze of federal assistance and broad-based tariffs against trading partners.

But it’s not just Trump who poses a threat. Republicans in Congress are considering plans to gut the social safety net, including Medicaid, a move that would make economically vulnerable families pay for tax cuts for the wealthy. These efforts are likely to severely limit our capacity to recover quickly from the next economic crisis as well as exacerbate the persistently high levels of poverty that disproportionately burden families and children of color.

These policies don’t just threaten the historic gains for workers of color over the last five years. All workers and their families are now forced to contend with heightened uncertainty and chaos that put their employment and broader economic security at risk. As attacks on public-sector employment continue, and the prospects of a self-inflicted recession rise, it’s likely workers of color will once again be among the first to contend with setbacks, reversing the forward movement of the last five years.

Children of color endure a disproportionate share of the burden of poverty in the United States. In 2023, Black, Hispanic, and American Indian and Alaska Native (AIAN) children remained about three times as likely as their non-Hispanic white peers to fall below the poverty line (see Figure A below). Similarly, Asian children were about twice as likely to suffer material shortcomings relative to their white peers.

Figure A

The results of the policy response to the pandemic proved that we purposely choose to tolerate a disproportionately high level of poverty for children of color in the United States. Between 2019 and 2021, the poverty rate of all these children declined by about half. This decline was largely attributed to the expanded Child Tax Credit (CTC), which helped lift out of poverty more than 700,000 Black children and more than 1 million Hispanic children. But after lawmakers failed to extend the expansion of the CTC, nearly all the gains in poverty reduction disappeared the next year.

Inequities remained unjustifiably high even when the poverty rate for children of color declined to its lowest point in 2021, reflecting the embeddedness of structural racism in the U.S. economy. Black and Hispanic children remained three times as likely as their white peers in 2021 to suffer the debilitating effects of poverty at a young age (see Figure A above). This racial gap is partly explained by the inadequacies of the expanded CTC to reach all families in need. But structural racism and the myth of race-neutral policies lie behind the broader persistence of the poverty gap.  

The material shortcomings endured by children reflect the economic situation of their parents and family. Black households are more likely to experience joblessness and low earnings than their non-Hispanic white peers. In 2023, the typical Black and Hispanic household earned just 63 cents and 74 cents, respectively, for every dollar earned by the median non-Hispanic white household. These persistent disadvantages leave families of color much more vulnerable to poverty. At the same time, the eroding U.S. social safety net leaves children from economically vulnerable families much more defenseless in the face of economic shocks.

Realizing Dr. King’s dream will require a recognition that the brunt of economic disparities falls largely on children of color, and Black children in particular. The early deprivation that poor Black children are left to endure is likely to compound once they enter a labor market that shapes outcomes by race and economic status. Breaking this cycle of economic vulnerability will require some form of child allowance, akin to the enhanced CTC, that doesn’t exclude families who stand to gain the most due to their material shortcomings.

The ability of unconditional cash transfers to relieve families from economic hardship and food insufficiency in 2021 proved once and for all that we don’t need to run social experiments to know that all families in need are deserving of relief. Similarly, our sustained commitment to full employment and fighting for stronger workers’ rights and unions should form part of a broad basket of policy solutions that enhance economic equity. Republicans in Congress are currently considering plans to do the exact opposite. House Republicans are proposing to slash spending on social safety net programs like the Supplemental Nutrition Assistance Program (SNAP)—or food stamps—to essentially make hungry families pay for federal tax cuts for wealthy households. Food stamps alone kept more than 1.3 million children out of poverty last year. Continuing to gut the social safety net in the face of persistently high poverty fails all children and robs our economy of their future contributions.

The newly updated chartbook provides a more detailed snapshot of the social, political, and economic conditions for AIAN, Asian American and Pacific Islander (AAPI), Black, Hispanic, and white households, and those data are also disaggregated by gender where possible.

The addition of AIAN data represents an ongoing effort to improve and expand representation of Indigenous communities within economic research and policy discussions. Historically, their exclusion has reflected a genuine lack of data of comparable quality and quantity compared with more populous groups within the United States. However, it is important to also acknowledge that Indigenous Americans have often been deliberately erased from the American narrative, even when those conversations center on social and economic justice. A history of physical, cultural, and economic violence—combined with institutional neglect and the denial of sovereignty—has resulted in AIAN communities experiencing rates of poverty, incarceration, and unemployment much more similar to Black and Hispanic Americans than white and Asian Americans. Supporting the self-determination of Native American communities while simultaneously working to make those communities whole through compensation for the harm done by American policy is critical to reducing those inequities.  

Significant gaps in employment opportunities and lower wage levels translate to lower median household incomes among Black, Latino, and AIAN households. As shown in the figure below, these income disparities have been persistent across time, even as recent years have seen increases in household incomes across groups. 

Anti-racist handbook

AIAN, Black, and Latino households experience much higher poverty rates on average than white and Asian households. AIAN households experience poverty at twice the rate of the typical American household (20.9% versus 10%). Poverty is a measure of economic deprivation, reflecting disparities in unemployment, wages, and income, as well as differences in life circumstances like severe disability and major illness.

Anti-racist handbook

When we initially released our anti-racist handbook, the goal was to provide a resource for scholars and organizations committed to redefining policy to fight against racism. The publication includes essays by scholars and activists from diverse race and ethnic backgrounds and disciplines. Each essay tackles a different aspect of the research and policy development process or addresses the political and economic concerns of a specific racial or ethnic community in the United States. These essays provide important context for interpreting the data in the interactive chartbook.

As outlined in one of the handbook’s essays, there is no such thing as race-neutral policy. Capturing differences in outcomes across groups enables us to examine the disparate effects of policy and move toward improving the lives of marginalized and often “invisible” communities.

Key findings:

• In the pandemic recovery, young high school graduates have experienced a much faster rebound in job prospects and stronger wage growth than any recovery in recent history.
  • The unemployment rate for young high school graduates—defined as workers ages 18 to 21—recovered in two years in the pandemic recovery compared with almost 9.5 years following the Great Recession of 2008–09. Meanwhile, the underemployment rate recovered more than five times faster in the pandemic recovery than the aftermath of the Great Recession.
  • Young high school graduates experienced 9.4% real (inflation-adjusted) wage growth between February 2020 and March 2024.
• Gaps in labor market outcomes across race and ethnicity and gender persist even among high school graduates who have the same basic level of education and little variation in professional experience.
  • The unemployment and underemployment rates of Black, Hispanic, and AAPI young high school graduates are much higher than their white counterparts.
  • On average, Black workers are paid 93.2% of what white workers are paid per hour, while women are paid 87.6% compared with their male counterparts.

As with young college graduates, young high school graduates are experiencing a much stronger labor market today than before the pandemic and at any point since 2000. The fast economic recovery from the pandemic shock is a direct result of the aggressive fiscal policy response that matched the scale of the problem—in stark contrast to policy responses following previous recessions.

In this blog post, we start by examining employment and enrollment outcomes for young high school graduates, defined as workers ages 18 to 21. We then analyze their short- and long-run trends in unemployment, underemployment, and wages, looking at those with only a high school degree and who are not enrolled in further schooling.1

To most accurately capture the choices that young high school graduates are making, we include all young people between the ages of 18 and 21 who have less than a bachelor’s degree (including those with some college) in our initial sample. We group this population into four categories: “employed only” and not enrolled in further schooling, “enrolled only” and not employed, employed and enrolled, or “idled” (not enrolled and not employed, which includes the unemployed). Among these young high school graduates, most are either “employed only” and not enrolled in further schooling (32.7%) or “enrolled only” and not employed (31.1%). Since 1989, the share of young high school graduates who are “employed only” has fallen 11.8 percentage points, while the share of those who are “enrolled only” has risen 10.1 percentage points. As of March 2024, the share of young high school graduates who are employed and enrolled (21.5%) and idled (14.7%) remains roughly similar from 1989 (21.0% and 13.5%, respectively).

Next, we narrow the sample of young high school graduates to those who are not currently enrolled in further schooling to assess the labor market for those making work their primary activity. The unemployment and underemployment rates for young high school graduates rose sharply during the Great Recession and the pandemic (Figure A). The unemployment rate reflects the share of the young high school graduate population who are jobless yet have reported that they are actively seeking work. Unemployment rates for high school graduates recovered nearly five times faster after the pandemic (two years, February 2020 to February 2022) compared with the Great Recession of 2008–09 (9.5 years, December 2007 to May 2017).

Figure A also shows that the underemployment rate for young high school graduates recovered in just under two years after the onset of the pandemic (February 2020 to December 2021) but took more than 10.5 years after the Great Recession (December 2007 to July 2018). This rate includes the unemployed plus “involuntary” part-timers (those who work part time but want full-time work) and “marginally attached” workers (those who want a job and have looked for work in the last year but have given up actively seeking work in the last four weeks and therefore are not captured in the official unemployment rate). Notably, the underemployment rate of young high school graduates has never returned to its low point in the tight labor market in 2000.

Figure A

Despite the fast recovery in the pandemic recession, gaps still remain between Black, Hispanic, and Asian American and Pacific Islander (AAPI) high school graduates and their white counterparts, as shown in Figure B. If labor markets were well-functioning and free of discrimination, we would expect little disparity in the unemployment rates of young high school graduates given that they have the same basic level of education and are in the same labor market position. However, in the 36 months ending in March 2024, Black (18.8%), AAPI (12.8%) and Hispanic (12.0%) graduates have much higher unemployment rates than white graduates (9.5%). This suggests that other factors such as discrimination or unequal access to job networks and opportunities play a role. Young Black high school graduates’ underemployment rates are significantly higher than any other group, which demonstrates that a much larger share of Black graduates is either discouraged from the job search or is working part time when they would rather work full time.

Figure B

Young high school graduates experienced real (inflation-adjusted) wage growth for the first time this early in a recovery compared with the prior three business cycles (Figure C). Even after accounting for unusually fast inflation, real wage growth between February 2020 and March 2024 was 9.4% for young high school graduates. By comparison, young high school graduates faced stark wage losses of 10.6% after the Great Recession, 4.3% between 2001–2005, and 5.5% between 1990–1994. This means that real wage growth in the pandemic business cycle was a tremendous 20.0 percentage points faster than in the aftermath of the Great Recession, 13.7 percentage points faster than between 2001–2005, and 14.9 percentage points faster than between 1990–1994. 

Figure C

Despite this positive wage growth, Black-white and gender wage gaps remain significant even among young high school graduates who have equal levels of education and very little variation in work experience. Compared with young college graduates, young high school graduates experience smaller wage gaps across race and ethnicity and gender in part due to crucial policies such as the minimum wage. Figure D shows that Black workers are paid $1.15 less per hour, on average, than white workers and women are paid $2.22 less per hour than their male counterparts. This translates to Black workers being paid, on average, 93.2% of average white workers’ wages and women being paid, on average, 87.6% of their male counterpart’s wages.

Figure D

These findings underscore the immense role that large fiscal relief and recovery packages, including expanded unemployment insurance coverage and aid to state and local governments, had in healing the labor market after the pandemic recession. For the first time in a recession over the past 35 years, young workers were not left behind by policy. However, policymakers must prioritize sustained full employment, increase the federal minimum wage, strengthen and enforce labor standards, and make it easier for workers to come together and form unions to ensure that these gains are fully realized and that racial and gender wage gaps are addressed.

Note

1. Notes about our data sample: Because we are examining such a small subset of the population, we pool 12 or 36 months of data to increase the sample size and mitigate some of the volatility in the series. Unless otherwise specified, when looking at “overall” trends in the data, we pool 12 months of data to create a pooled moving average, which also has the added advantage of removing any seasonal effects. We use 36-month pooled data to look at trends by gender and race/ethnicity, since breaking the population down by demographics reduces sample size and data reliability. 

In March, workers at the Waffle House in Conyers, Georgia, went on strike. It’s not difficult to see why: They are paid wages as low as $2.90 per hour before tips, with a $3.00 per shift “meal credit” taken from their already meager wages regardless of whether they have eaten a meal at the restaurant.    

But that is not all—worker safety is also at issue. Waffle House workers report working in dangerous environments and point to the constant threat of violence and the lack of trained security in the restaurants. Unfortunately, it is not uncommon for customers to start fights with or to attack workers. Waffle House staff is expected to deescalate these fights and call police rather than the store ensuring their safety and the safety of other customers. There are also robberies—one Waffle House worker was shot and killed during an armed robbery in Tifton, Georgia.  

Finally, there is the practice of Waffle House restaurants being kept open during hurricanes and other disasters which endanger workers who are still expected to report for their shifts. One worker reported being asked to go to the store to purchase paper towels during a hurricane.  

The conditions faced by staff at Waffle House restaurants exemplify the harmful philosophy of the Southern economic development model: that workers are just another commodity that can be replaced and a cost to be minimized. While financials are not public, Forbes estimates the owner of Waffle House has a net worth of $1.7 billion. Yet, 66% of Waffle House workers are paid less than $15 an hour and 24% are paid less than $10, according to our Company Wage Tracker. Thousands of Waffle House workers are paid poverty-level wages, with a portion of those wages being taken back as a “meal credit.” The meal credit that is automatically deducted from workers’ pay could add up to almost $30 million annually for Waffle House, according to reported estimates. 

The Southern economic development model is characterized by low wages, lax regulation of businesses, low corporate taxes, and a lack of safety net supports for workers and families. But perhaps most important of all, this model requires that workers are divided because when they come together across racial, gender, class, and other differences, they are empowered to demand change.   

Fortunately, workers across the region are increasingly recognizing that they have the power to stop wealthy and powerful corporations from continuing to extract their labor without fair compensation and without regard for their well-being or that of their families and communities. The Waffle House strike is part of a much larger movement of service workers across the South–in Alabama, Georgia, North Carolina, and South Carolina–joining together as the Union of Southern Service Workers to demand change. 

Any policy regime or business model that does not protect the security of workers and goes so far as to require them to battle hurricanes to ensure that businesses remain open is not a model that should be maintained. Waffle House workers and many others in service jobs across the South are fighting to change this.

Previously from Rooted in Racism: Southern policymakers leave workers with lower wages and a fraying safety net

Next from Rooted in Racism: Operation Dixie failed 78 years ago. Are today’s Southern workers about to change all that?

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In reality, this economic development model is fundamentally flawed as a strategy for improving living conditions for most Southerners. In fact, the Southern economic development strategy was never designed to help the vast majority of working Southerners; rather, it reflects efforts to ensure continued access to the cheap labor of Black people following emancipation, and that of Black and brown people more generally today. 

In this report, we describe the Southern economic development model in detail and document the historical evolution of various components of the model. We show how politicians and the wealthy across the South have used racism and drawn on notions of white supremacy to divide the population along racial, ethnic, nativist, and economic lines. This has prevented Southerners from coming together in solidarity to demand policies that would uplift everyone in the region.

Many Southern politicians try to obscure and distort the historical record on race and the origins and purposes of many of their policies. They point to population growth over the last 50 years and the increasing number of businesses—primarily in manufacturing—that have located in some Southern states to try to sell their deceptive narrative. In this report, and in the companion reports and fact sheets in this series, we will scrutinize such claims and draw on empirical data to illustrate how the Southern economic development model has failed most workers and families across the U.S. South.

This project exposes the exploitative policies and practices that impoverish Southerners across demographic groups and highlights their complex connections to the prevailing power structure in the South. This report begins with a detailed description of the Southern economic development model. What follows is a brief history of the origins of the model, which developed as a way for wealthy and powerful people to ensure continued access to the labor of Black people following the Civil War and to that of Black and brown Southerners today, for little or no compensation. Finally, the report emphasizes that civil rights for Black and brown Americans are intimately intertwined with the rights of workers, independent of race. This reality is recognized by many conservative economic and political leaders and has led to their vociferous opposition to unions, an institution that can create cross-racial solidarity, empower workers, and undermine the racial hierarchy across the region.

Figure A

What is the Southern economic development model?

The Southern economic development model is designed to enable businesses to extract labor from large pools of workers as cheaply as possible. Businesses in the South have particularly sought the labor of Black and brown Southerners. For over 300 years, these laborers have been used to cultivate cotton and tobacco, produce the food we eat, care for our children and the elderly, build the nation’s infrastructure, and perform many other critical jobs—often for little or no compensation. The labor provided by enslaved men and women was overwhelmingly unpaid.1 After emancipation, many Black men and women—who faced limited employment opportunities—were often forced into sharecropping. They worked the land and grew crops on plantations owned by former enslavers who typically took half or more of the value of their crops (Bode 2020; USDA 2003). It was also common for Black men and women to work as porters and maids on Pullman railcars, where they were forced to rely on tips for most, if not all, of their income (Hasso 2021; Trotter Jr. 2019; Tye 2005). Today, incarcerated workers can be required to work without pay and they often are (ACLU and GHRC 2022; Mast forthcoming a).

The racist roots of this model have been obscured in favor of a more acceptable “pro-business” narrative. The pro-business narrative suggests that low wages, low taxes, anti-union policies, a weak safety net, and limited regulation on businesses creates a “rising tide that lifts all boats.”

Below we examine the key features of the Southern economic development model in detail. We then trace the development of this model over time, highlighting the ways civil rights for Black and brown Southerners are necessary for ensuring that all workers are empowered.

Low wages

Many states across the South promote low wages for many workers by the policies they implement or, in many cases, the policies they choose not to implement. For example, five Southern states—Mississippi, Louisiana, Alabama, Tennessee, and South Carolina—have no state minimum wage at all. Georgia has a minimum wage set at $5.15 per hour. Because the federal minimum wage is set at $7.25 per hour and $2.13 per hour for tipped workers, all workers across the South are supposed to be paid at least these minimums (EPI 2023).

Fewer than half of the Southern states (six states plus D.C.) have a minimum wage higher than the federal minimum wage of $7.25 per hour. In every other region, most states have minimum wages higher than $7.25 (EPI 2023). In fact, of the 20 states where the federal minimum wage applies, 10 are in the South.

Many Southern states have weak, if any, labor law enforcement. This means that workers in the South, who are already receiving low minimum wages, are particularly vulnerable to wage theft. This is especially true in industries such as food and drink services, agriculture, and retail (Cooper and Kroeger 2017).

Cooper and Kroeger (2017) analyze data on the share of workers who have experienced minimum wage violations—i.e., were paid less than the applicable minimum wage—in the 10 most populous U.S. states. They find that large shares of low-wage workers in Florida (24.9%), North Carolina (12.3%), Texas (10.8%), and Georgia (9.4%) have experienced minimum wage violations.

Failing to pay the minimum wage is just one of the ways employers cheat workers out of their earnings.2 Employers who commit wage theft are rarely punished (Cooper and Kroeger 2017). In Florida, for example, there is no state Department of Labor to enforce wage standards; all of the state’s wage and hour enforcement is deferred to federal authorities. While Alabama, Delaware, Georgia, Louisiana, Mississippi, and South Carolina are states which technically do have Departments of Labor (DOLs), their DOLs do not make any concrete effort to recover wages that are stolen by employers (Mangundayao et al. 2021).

Wage theft victims can technically pursue action against an unscrupulous employer by submitting claims with the U.S. Department of Labor’s Wage and Hour Division. However, in the absence of in-state enforcement, businesses face little risk of being held accountable if they cheat their employees.

Notably, some Southern states have actively fought against federal government efforts to raise wages in their states. In 2022, the attorneys general of Texas, Louisiana, and Mississippi sued the federal government to prevent an increase in the wages of federal contractors (Texas v. Biden 2022).

It is important to understand that federal standards governing minimum wages, overtime, and even what activities are to be included in the number of hours worked were designed to keep wages low in the South. When the Fair Labor Standards Act (FLSA) was enacted in 1938 establishing these rules, large categories of workers—primarily agricultural workers, domestic workers, tipped workers, and public-sector workers—were excluded from its protections.

Agricultural workers, domestic workers, and tipped workers were excluded specifically because the formerly enslaved were limited almost entirely to these lines of work across the South; Southern lawmakers would not agree to vote for the legislation without these exclusions (Dixon 2021; Perea 2011). The practice of using tips to compensate service workers in the United States in fact proliferated in the 19th century after the end of slavery; it allowed businesses to hire the formerly enslaved without having to pay them, instead forcing them to rely on tips (Dixon 2021; Tye 2005).

When the FLSA was amended in 1966 to include service workers—among other coverage expansions—a special “tip credit” was created that allowed employers to count tips received by staff against a portion of the minimum wage the employer was required to pay, effectively creating a separate, lower minimum wage (Allegretto and Cooper 2014). Today, Southern tipped workers continue to rely heavily on their tips. The federal minimum wage for tipped workers, which applies in most Southern states, is only $2.13 per hour—a level that has remained unchanged since 1991 (Schweitzer 2021).

We continue to see the influence of racism and sexism in the low wages and lack of protections offered to workers in jobs that were historically held by enslaved people. Domestic work, for example, has historically been—and continues to be—performed by Black, brown, and immigrant women. These women work as nursing, psychiatric, and home health aides; personal and home care aides; and nursing assistants in private households. Across the South, Black women make up 43% of home health care workers, followed by Hispanic women at 17% (Childers, Sawo, and Worker 2022). Workers in these jobs remain undercompensated despite the clear value of this work—providing care that allows families to work and that allows elderly and disabled Southerners to age in their homes (Childers, Sawo, and Worker 2022; Robertson, Sawo, and Cooper 2022).

Minimal levels of regulation

Another key component of the Southern economic development model is regulating businesses as little as possible. As noted in the previous section, this means lack of regulation or enforcement around labor laws such as federal minimum wage laws, overtime laws, and safety standards for workers (Cooper and Kroeger 2017; Fleischman and Franklin 2017; FPI 2022; Terrell and St. Julien 2023; Waldman 2017). It also includes minimal regulation of business activities that pollute the air, water, and soil, which disproportionately impact Black and brown communities.

In Louisiana, there is a roughly 130-mile-long area between Baton Rouge and New Orleans running along the Mississippi River that is known as “Cancer Alley.” Cancer Alley has a heavy concentration of 200 or more oil refineries and petrochemical plants spewing toxic chemicals into the air, elevating cancer and other health risks among the area’s predominantly Black residents (Laughland 2023; Terrell and St. Julien 2022). Terrell and St. Julien (2023) found that lax permitting processes in the state have resulted in Black and brown communities across Louisiana having a seven to 21 times greater exposure to air pollutants—especially those from chemical manufacturers—compared with white communities.3

Younes et al. (2021) mapped the spread of cancer-causing chemicals in air pollution across the country that moves into residential neighborhoods and exposes residents. They identified places across the country where residents were exposed to hazardous chemicals, with or without their knowledge. Younes et al.’s study found that almost all states with the highest levels of exposure are Southern states, with Texas and Louisiana being the states whose residents have the greatest excess exposure. In Texas, for example, one of the largest refineries globally has put millions of pounds of toxic chemicals in the air over the years. The result is an excess risk of cancer in these areas of three to six times what is considered acceptable by the EPA (Younes et al. 2021).

These communities are exposed to these dangerous chemicals because of the lax regulations of policymakers in Southern states. For example, in Louisiana, land use plans which label many majority-Black districts as “industrial” or “future industrial” have been approved despite these being residential communities (Laughland 2023). And according to a lawsuit by residents of these communities, every request by these large industrial corporations to locate in predominantly Black communities is approved by local governments (Laughland 2023).

Instead of expanding their staffing for pollution control, states with the worst environmental exposures have actually cut funding to state environmental agencies. In Texas and Louisiana, the states whose residents face the highest rate of exposure to toxic chemicals, funding for state environmental agencies was cut by 35.2% and 34.8% respectively between 2008 and 2018. Funding was down by 33.7% in North Carolina, 32.8% in Delaware, 20.8% in Georgia, 20.3% in Tennessee, and 10% in Alabama. But not all Southern states cut their operational funding for state environmental agencies: Maryland, South Carolina, Arkansas, Oklahoma, Florida, and West Virginia increased their funding (EIP 2019).

Low income and corporate taxes

Next, the Southern economic development model seeks to severely limit corporate and personal income taxes, particularly any that would increase the tax burden on higher-income households and individuals.

The roots of the South’s tax structure

To understand public attitudes toward taxes across the South, it is important to consider the roots of the current stance on taxes in the Southern economic development model. Before the Civil War, taxes on enslaved people were paid primarily by wealthy plantation owners and constituted a significant source of revenue for states across the South (Hill et al. 2019; Lyman 2017).

After slavery was abolished, plantation owners represented themselves as “concerned taxpayers” who opposed compensating for lost state revenue from taxes on enslaved people with rising property taxes. They were joined by poor white farmers who would now also be subject to rising property taxes raised by newly—and temporarily—empowered Black political leaders.

These leaders were raising taxes to provide basic services such as public education and to rebuild infrastructure after the devastation of the Civil War. But wealthy Southerners stoked racial animus to divide poor and working-class Southerners along the lines of race and ensure majority support to implement highly regressive tax policies (Williamson 2021; Young 2023).

Low corporate and income taxes force reliance on regressive sales taxes

Today, Southern politicians, business interests, and other wealthy Southerners continue to seek to eliminate or severely limit corporate and personal income taxes. For example, several Southern states used temporary budget surpluses—surpluses resulting from the distribution of federal dollars to states intended to address COVID-19 and the associated recession—as an excuse to further cut already low income-tax rates (Das 2022b).

Corporate and personal income taxes tend to be progressive, meaning they are structured such that higher-income earners pay a larger share of their income in taxes, while lower-income earners pay a smaller share. But when collection of corporate and personal income taxes declines, states are forced to rely more heavily on sales and property taxes, which are regressive. When sales and property taxes are assessed, lower-income people end up paying a larger share of their income for those taxes than higher-income people do (Wiehe et al. 2018; Young 2023).

Texas, Florida, and Tennessee have no income tax. In other Southern states with income taxes, tax rates are so low that they fail to raise adequate revenue, requiring the state to rely on sales and property taxes and fees and fines to pay for many public services including education, public health, public safety, infrastructure, and other services.

In 2019, sales tax accounted for more than 40% of all state and local tax revenue in many Southern states. These included Tennessee (56.6%), Louisiana (53.3%), Florida (50.9%), Arkansas (49.6%), Alabama (48.0%), and Mississippi (45.5%). These shares are substantially higher than the 34.4% of state and local tax revenue that sales taxes account for nationally (Das 2022a).

To generate this revenue, these states had sales taxes ranging from 4.0% in Alabama to 7.0% in Mississippi and Tennessee. And while most states at least exempt food from sales taxes, as of January 2023, Mississippi, Alabama, and Oklahoma did not (Tax Policy Center 2023).4

This approach to taxes means that public services are underfunded in the South

Proponents of this tax model argue that it increases the incomes of all households by allowing them to keep more of their money. Further, they argue that it allows businesses to reinvest and grow their businesses, thereby increasing tax revenue. But this regressive approach to taxes simply means there is not sufficient revenue to properly fund education, health care, public transportation, water and sewer system maintenance, and the many other public services Southerners rely on (Das 2022b).

The lack of resources to provide services for ordinary Southerners is further exacerbated when state governments give huge subsidies to private companies. For example, Mississippi gave a $247 million subsidy to Steel Dynamics in 2022, and South Carolina spent $1.3 billion on a subsidy for Scout Motors in 2023 (Good Jobs First 2023a, 2023b). To illustrate how these subsidies harm South Carolinians specifically, we can consider the impact of abatements on public education. In fiscal year 2021, South Carolina public schools reported that they lost $534 million in property tax revenues to abatements, money that would have gone to funding school staff and providing services to students (Wen 2022). The districts that lost the most funding had a majority of students coming from low-income households that qualified for free or reduced-price lunches (Wen 2022). This harms students, families, and communities—with the harshest impacts on those facing the greatest hardships.

A weak safety net

The Southern economic development model is further characterized by a weak social safety net. Most Southern states offer relatively few and weak protections against hardship for individuals and families who suffer some kind of economic shock, such as the loss of a job, an illness, or the need to care for someone. This weak social safety net cements low-income Southerners’ precarity, further disempowering the labor force by making any economic shock all the more harmful. In this context, a Southern worker with little private savings is more likely to take or endure exploitive or underpaid work.

Southerners face greater insecurity when they lose their jobs

Unemployment insurance (UI) , is a crucial component of the social safety net, meant to ensure families have economic security in the face of a job loss by replacing some percentage of their prior earnings (Bivens and Banerjee 2021). During times of crisis, such as the COVID-19 recession, UI also helps stabilize the broader economy by enabling households to continue spending, which helps maintain overall consumer demand (Bivens et al. 2021). While the UI system is funded jointly by federal and state funds, it is the state that has primary control over who is eligible to receive benefits, the levels and duration of benefits, and how the system is financed (Bivens et al. 2021).

UI is also a system that, if properly designed, helps support workers’ bargaining power. By giving workers support when they lose a job, UI allows those workers to take the time necessary to find a job that matches their skills and that pays as well as the one they lost. Conversely, weak UI benefits force many workers to take the first available job—even if it suits their skills poorly or pays less than the job they lost.

While many states’ UI systems need reform, the level and ease of accessing benefits in many Southern states is particularly problematic. Data show that of the 10 states with the lowest maximum weekly UI benefit amounts, seven—Mississippi ($235), Alabama ($275), Florida ($275), Louisiana ($275), Tennessee ($275), South Carolina ($326), and North Carolina ($350)—are in the South (The Century Foundation 2023). Many Southern states also have particularly onerous requirements for accessing benefits, which are made available for incredibly short durations. For example, most states make standard UI benefits available for a maximum of 26 weeks. Only 13 states set their maximum number of weeks below 26, more than half of which are Southern states: Alabama (14 weeks), Arkansas (16), Florida (12), Georgia (14), Kentucky (12), North Carolina (12), South Carolina (20), and Oklahoma (16) (CBPP 2023b).

The fact that the states where most Black Americans live have the least accessible UI systems with the least generous benefits, shortest durations for receiving benefits, and some of the most onerous requirements is not a coincidence or an accident. The UI system as structured is rooted in a racist agenda: Southern Democrats agreed to support the New Deal only if states controlled access to UI and other social benefits. This allowed them to design systems that would limit Black workers’ access to benefits (Edwards 2020; Traub and Diehl 2022).

Southerners face barriers to health care access

Full participation in the economy—not to mention in one’s family and community—are much easier when one is healthy both physically and mentally. Unfortunately, far too many people in the United States lack access to quality, affordable health care. This problem is particularly salient across Southern states; Southerners are less likely to have access to health insurance than those living in other regions. In 2020, 7.7% of all children living in Southern states lacked health insurance coverage compared with 3.3% in the Northeast, 4.4% in the Midwest, and 4.9% in the West. For working age adults, the share was 16.4% in the South, 6.6% in the Northeast, 8.6% in the Midwest, and 11.3% in the West (Keisler-Starkey and Bunch 2021).

The 2010 Patient Protection and Affordable Care Act (ACA) included an expansion of Medicaid eligibility to adults with incomes up to 138% of the official poverty line. While most states have adopted and implemented the expansion, 10 states have failed to adopt it, seven of which are in the South: Mississippi, Alabama, Georgia, South Carolina, Florida, Tennessee, and Texas (KFF 2023).5 This is one reason Southerners are less likely to have health insurance coverage, which is particularly concerning given high rates of illness and comorbidities across the South (Akinyemiju et al. 2016).

The failure to expand Medicaid creates additional challenges even for those who have insurance coverage but live in rural areas, denying increased revenue to many rural hospitals that were already facing closure (Levinson, Godwin, and Hulver 2023).

Southern states have some of the lowest levels of cash assistance for families with children

Aid to Families with Dependent Children (AFDC), a cash assistance program for poor families with children, was established in 1935 as Aid to Dependent Children (ADC).6 In 1996, the Personal Responsibility and Work Opportunity Act (PRWORA) replaced AFDC with the Temporary Assistance to Needy Families (TANF). TANF differs from AFDC in several important ways. Under AFDC, states could receive unlimited federal matching funds. Under TANF, federal support is distributed to states through a block grant. TANF also has five-year lifetime limits on the receipt of benefits and requires that states increase their work participation rates for TANF recipients (DHHS n.d.).

TANF is funded by the federal government, but states determine benefit levels, set income and resource limits, and administer or oversee administration of the program. They have a great deal of discretion in how they use TANF funds because the specific goals of the program are so broad. The stated goals of the program are to (1) assist families in need so children can be cared for in their own homes; (2) reduce parental dependence on government by promoting job training, work, and marriage; (3) prevent out-of-wedlock pregnancies; and (4) encourage two-parent families (CBPP 2022; DHHS n.d.).

Under the first goal, states can provide direct cash assistance to families to provide for their children (CBPP 2022; DHHS n.d.). In 1997, 71% of TANF dollars were spent in direct cash assistance, but by 2020, this share had fallen to just 22% nationally (Azevedo-McCaffrey and Safawi 2022). There are, however, large variations in TANF spending by state. In 2021, 15 states spent 10% or less of TANF dollars to provide cash assistance to families. Almost half of these—Alabama, Arkansas, Delaware, Louisiana, Mississippi, North Carolina, and Texas—are in the South.7 Alabama spent just 7% of their TANF dollars on general spending, most in cash dollars. They spent 1% of their TANF dollars on work supports, 11% on childcare, but 29% on “other” services (CBPP 2023a).8 Mississippi spent 6% in general spending, with only 3% going to childcare, while 17% of spending fell under the “other” category (CBPP 2023c). Across the South, only the District of Columbia and Kentucky spent 30% or more of their TANF funds on direct assistance, and in Kentucky, more than half of those funds went to foster care for children fostered by relatives and adoption and guardianship subsidies (Azevedo-McCaffrey and Safawi 2022).

Despite spending millions of dollars on TANF-related activities, states had millions of unspent TANF dollars as of 2021.9 For example, Alabama had $113 million in unspent TANF dollars in 2021—amounting to 122% of their $93 million block grant for the year (CBPP 2023a). At $98 million, Mississippi’s unspent TANF funds amounted to 113% of their $86 million grant for that year (CBPP 2023c). Texas and Oklahoma each had more than $300 million in unspent TANF funds (CBPP 2023d; CBPP 2023f). Tennessee was even worse, with $798 million in unspent funds (CBPP 2023e).

Compounding the impact of unspent TANF dollars are low benefit levels in many states, especially in the South. The maximum monthly benefit for a single mother with two children ranges from $204 in Arkansas to a high of $1,151 in New Hampshire. There are only four Southern jurisdictions with a benefit amount of $500 or more for a one adult three-person family: the District of Columbia ($665), Maryland ($727), Virginia ($587), and West Virginia ($542) (Thompson, Azevedo-McCaffrey, and Carr 2023).

The maximum nominal TANF benefit in 2022 is the same or lower than it was in 1996 in 16 states, seven of which—Arkansas, Delaware, Florida, Georgia, Kentucky, North Carolina, and Oklahoma—are in the South. The result is that the inflation-adjusted value of TANF benefits in these states is 45% to 56% lower than it was in 1996 (Thompson, Azevedo-McCaffrey, and Carr 2023).10

The current structure of TANF in many Southern states reflect efforts of politicians to control the behavior and reproduction of Black women and compel their participation in the low-wage labor market (Floyd et al. 2021; King v. Smith 1968; CBPP 2022). Historically, states have used concepts of “deservingness,” “suitable homes,” and the “man in the house” to exclude Black families from the program.

To be deserving, a mother needed to be widowed, have her husband be unable to provide due to disability, or have been abandoned by the children’s father “through no fault of the mother.” A home was “unsuitable,” by definition, if the mother was unwed or engaged in sexual activity outside of marriage (Floyd et al. 2021; Floyd and Pavetti 2022). The “man in the house” rule denied mothers benefits if a man was found in the house or if the mother was found to be sexually active even if no man lived in the house with her and her children. These rules applied regardless of whether the man the mother was involved with was the children’s father (Floyd et al. 2021; King v. Smith 1968; O’Connor 1969). Today, states with larger Black populations—primarily Southern states where most of the Black population lives—tend to have more stringent requirements for accessing TANF benefits, and those benefits tend to be more meager (Shrivastava and Thompson 2022).

Anti-union policies

Crucially, advocates of the Southern economic development model vociferously oppose unions and other collective actions in which workers band together—especially across racial, ethnic, and immigration statuses. Research has shown that higher rates of unionization are associated with higher wages, better working conditions, less inequality, less racial animosity, greater economic mobility, and greater civic participation (Banerjee et al. 2021; Freeman et al. 2015; Frymer and Grumbach 2020; Mishel 2021; Mishel, Rhinehart, and Windham 2020). Given these effects, it is unsurprising that states across the South have adopted policies that hamstring workers’ ability to form unions, which pose a threat to the Southern economic development model.

First, unions threaten the Southern economic model because they have historically been the primary counterweight against businesses seeking to keep workers’ wages and benefits low. In this way, unions threaten the central economic goal of the Southern model, which is to keep labor costs as low as possible. Second, the labor movement in the U.S. today is one of the foremost institutions promoting cross-racial solidarity. Strong unions could potentially undermine the racial and class divisions that the wealthy and their political supporters have used to promote and preserve the Southern model. Third, they are a key driver of greater equity in the workplace; racial and gender wage and wealth gaps are smaller among unionized workers, and union contracts ensure that all workers receive negotiated benefits. Further, unions protect Black and brown workers from discriminatory, retaliatory, or other arbitrary firing with the “just cause” and “due process” protections they provide (Bivens et al. 2023; EPI 2021; Gould and McNicholas 2017). Finally, unions threaten the Southern economic development model because they educate and encourage civic engagement among union members. Unions shape how voters understand their interests by discussing issues and candidates. They also activate their members to actively engage in campaigns and to turn out voters (EPI 2021; Feigenbaum, Hertel-Fernandez, and Williamson 2018).

Race and the Southern economy

Historically, the economy of the American South was largely agrarian and heavily dependent on cotton, tobacco, sugar cane, and other labor-intensive agricultural products (Baptist 2014, Conlin 2018). The intense need for large pools of labor and the desire to retain the wealth generated from that labor lies at the heart of the economic policies implemented across the South since even before the colonies became the United Sates. This includes policies of enslaving African people, supporting child labor, opposing unions, and allowing corporations to pollute the environment and poison the air and water—all in the name of keeping costs low and profits high.

Even as workers have fought to improve working conditions, many Southern lawmakers have used their power to ensure employers in their states retain access to large numbers of workers at poverty-level wages. While the economy was predominantly agrarian in the past, today there are significantly more auto manufacturing, professional, technological, and business services jobs across the South. There remain many jobs in oil and gas production, animal slaughter and processing, and service jobs as well. Yet even as the industrial composition of the South has modernized, much of the region’s business practices, labor standards, and underlying political economy has not. Below is a brief historical overview of the battle to maintain a low-wage labor force, particularly one comprised of Black and brown workers.

Extracting cheap labor from indentured and enslaved people

Since before the founding of the United States, the states that would become the American South have relied on cheap labor to drive economic growth and generate the illusion of widespread prosperity. The colonies imported white indentured servants and African people to meet their labor needs. The African people would eventually shift from being indentured to becoming enslaved people (Bennett 1962; Hannah-Jones 2021). Their enslavement ensured a consistent source for Southern businesses and landowners labor needs, while minimizing the costs of that labor. Plantation owners in the South used as much cruelty as was necessary to drive ever-increasing productivity from those enslaved Africans who worked in the fields producing ever-higher yields (Baptist 2014). This not only benefited wealthy Southern planters, but also Northern industrialists, financiers, and universities. The cotton that was produced in the South was processed in Northern factories and financed by Northern banks, creating wealth for everyone except those whose labor produced the wealth (see Baptist 2014).

Little changed following emancipation

Following the Civil War, the South remained tied to an agricultural economy. Instead of relying on enslaved people to provide much of the backbreaking labor required, they shifted to a sharecropping and tenant-farmer model which still relied on “freed” Black men and women’s labor. Plantation owners would “lend” newly freed men and women resources for sharecropping, but they ensured the vast majority would never be paid enough to pay off their debts. This was a system known as debt peonage which effectively meant that most freed Black men and women were often forced to work on the same plantations and for the same wealthy white landowners who had enslaved them. This effectively tied sharecroppers to their employers and, for many Black sharecroppers, their conditions under this system were difficult to distinguish from bondage.

States across the South also employed many other ways of ensuring they could retain access to Black labor for little or no compensation. They passed sets of laws known as Black Codes. These codes were designed to closely control the actions of Black men and women and maintain the racial hierarchy. These laws made it illegal for Black people to drink from white water fountains, attend white schools, or have a supervisory position over white workers (Dewey 1952; Hill 1965). In fact, Black men and women were often limited to the same menial jobs they held before the Civil War and were often pushed out of skilled work they had previously performed (Hill 1965). And to ensure that Black people would have no other choice but to take these jobs, it was common to require proof of employment from Black men and women. If they could not prove they were employed, they could be arrested and “rented” out to work on plantations, to build railroads, or just to provide general unskilled labor. Black women were often forced back into the same domestic work roles in white homes or in agricultural work alongside Black men. These laws were justified using the constitutional loophole in the 13th Amendment that allows “slavery” and “involuntary servitude” as a punishment for crime (Alexander 2020; Mercer 2022).

Extracting cheap labor from Black and brown Southerners today

This loophole enables Southern states to incarcerate a disproportionate number of Americans. For every 100,000 people nationally in 2021, the U.S. had 664 people incarcerated in prisons, jails, and other forms of confinement. This rate far exceeds the incarceration rates of our peer nations, such as the United Kingdom (129 for every 100,000 people), Canada (104), France (93), and many other democratic nations (Widra and Herring 2021).

While the national U.S. incarceration rate dwarfs those of our peers, the prison and jail incarceration rates of 13 of the 16 Southern states and the District of Columbia exceed the national average, with Louisiana (1094), Mississippi (1031), Oklahoma (993), and Georgia (968) having the highest rates of incarceration (Mast forthcoming a; Widra and Herring 2021). Further, Black Americans are disproportionately represented among the prison populations. While Black people are just over 32% of the population in Louisiana, they are 66% of those incarcerated in prisons and 57% of those in jails (PPI 2021a). In Mississippi, they are 37% of the population but 61% of the prison and 49% of the jail population (PPI 2021b). In Oklahoma they are 7% of the population but are 27% of the prison population and 23% of those incarcerated in jails (PPI 2021c).

Of the 1.2 million state and federal prisoners in the U.S., nearly 800,000 are forced to work in the prisons themselves, in prison industries, for other state or local government agencies, or for private-sector businesses (ACLU and GHRC 2022; Mast forthcoming a, PPI 2017).11 These prisoners, disproportionately Black men, are often paid very low wages, if they are paid at all—the vast majority of work done by prisoners in Alabama, Arkansas, Florida, Georgia, Mississippi, South Carolina, and Texas is unpaid (ACLU and GHRC 2022). In many instances, mass incarceration effectively reinstates the slave system (Alexander 2020).

Hispanic men and women, especially immigrant workers, also continue to face exploitation by wealthy business owners and corporations across the South. According to Gershon (2020), by the early 1960s, 95% of meatpacking workers outside the South were unionized with wages comparable to those of steel production workers. Meatpacking companies responded by moving operations to more rural areas, and, by the 1990s, they began seeking immigrant workers to keep wages low. Black workers make up the majority of meat processing workers in states across the South (56.4% in Maryland, 67.1% in South Carolina, and 73.1% in Mississippi) but the representation of immigrant and Hispanic workers in these grueling, low-wage jobs is high. Hispanic workers make up 25.8% of the South’s meat processing workers and 26.2% are foreign-born workers (Gershon 2020; Hickey forthcoming).12

The Southern economic development strategy helps maintain the racial hierarchy

Race and ethnicity have long been used by politicians and varied economic interests to divide Southerners along racial lines and increase animosity and distrust between groups (Haney López 2014; McGhee 2021). Southern politicians fearmonger about immigrants or Black and brown people receiving “unearned” benefits as the population of young Black and brown Southerners continues to increase. This is often achieved by drawing on stereotypes or racist tropes. One example is when politicians make receiving benefits (e.g., food stamps or Medicaid) conditional upon fulfilling work requirements or passing drug tests.13 Such practices create deep divisions, which are likely among the key reasons why the South has not become more progressive—given that Black and brown communities generally favor more progressive policies and politicians—despite the increasing diversity of the population.

In the current political climate, it has become common, particularly among conservative politicians and commentators, to hear arguments that “American” voters are being disenfranchised by voters who vote “illegally” or who “cheat.” Typically, “American” appears to apply to white voters while “cheaters” and “illegal” voters seem to refer to Black and brown Americans who are simply casting their ballots legally. For example, the places where challenges and lawsuits were filed in the 2020 presidential election were primarily places with large Black and brown populations (Phillips 2020).

We also see that in many states across the country, with the South being well represented, there is a push to privatize public education and to push public dollars into privately run charter schools (Pierce 2021). Pierce (2021) writes that this move toward privatization was largely in response to the Supreme Court decision in Brown v. Board of Education which ordered states to desegregate. In other words, the push towards privatizing education in the United States aimed to preserve the racial hierarchy. Similarly, it is not uncommon to hear arguments about immigrants coming to the United States and living on public benefits (Thomas 2020). The goal of these arguments is to make the broader white population feel that their tax dollars are going to people who are deemed “undeserving” and increase the white public’s support for policies that would exclude Black and brown Southerners.

Using dog whistles to divide

Politicians and other influential and powerful interests activate racism in ways that they and their supporters can deny by using dog whistles. A dog whistle in political speech refers to discourse that uses a code that specific segments of the population understand as racial but that gives people cover to deny that they are being racist to those who abhor racism. Haney López (2014) refers to the practice of dog whistles as “a steady drumbeat of subliminal racial grievances and appeals to color-coded solidarity” (3).

The development of the concept of the “taxpayer” provides one clear example of this practice. The common appeal to the “taxpayer” developed out of racism and white supremacy. During the Reconstruction period directly following the abolition of slavery, large Black populations in states like South Carolina were large enough, especially with the support of some poor whites, to elect Black leaders. Many poor white men voted in support of policies that required raising taxes on white landowners to fund things like schools, roads, and a basic safety net. Williamson (2021) reports that the wealthy white landowners developed the identity of the “taxpayer” as a means of dividing poor white landowners and Black freedmen. Since most Black freedmen lacked any substantial landholdings, wealthy landowners could engender hostility among poor white landowners toward Blacks, even if their material conditions were not dramatically different. This approach allowed powerful interests to oppose paying taxes for general welfare and encouraged poor white Southerners—especially poorer landowners who would also be taxed—to identify with the wealthy white landowners rather than with Black elected officials (Williamson 2021).

When the concept of “taxpayer” is invoked, it is used as a dog whistle to imply that “undeserving” people—particularly “undeserving” Black, Hispanic, and immigrant people—will take advantage of public resources paid for by hardworking white people who pay their own way and do not ask for “handouts.” This also instills the idea that asking for assistance is shameful, which further reinforces the status quo.

Meanwhile, poor, working- and middle-class workers of all racial backgrounds—especially Black and brown men and women who are disproportionately low-income—pay much larger shares of their incomes for sales, income, social security, and other taxes (see Mast forthcoming b).

The conservative strategy

While these dog whistles have been part of the conservative strategy at least since Reconstruction, they have been essential in convincing the majority to support racist, exploitative, and regressive politicians and policies. For example, John Ehrlichman, Assistant to the President for Domestic Affairs under then President Richard Nixon, admitted that the Nixon administration intentionally linked anti-war hippies and Black people with drug use and then proceeded to heavily criminalize drugs in order to “arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news” (Baum 2016). Campaigns based on “law and order” or appeals to increase criminal punishments for violence and/or drug use were thinly veiled racial appeals. This was especially the case following the tumultuous era of the Civil Rights Movement when Black Americans were demanding equality. Many white Americans opposed that equality, and Black rebellions—often called “riots”—broke out across the nation. These so-called riots were in response to police violence, high poverty rates, poor housing, and the many other inequities that Black communities were, and are, facing (Alexander 2020; Haney López 2014; Purnell and Hinton 2021).

When Ronald Reagan kicked off his presidential campaign, he began in the South, specifically in Philadelphia, Mississippi, which is known for the murders of James Chaney, Andrew Goodman, and Michael Schwerner for trying to register Black people to vote. Reagan used this first campaign stop to state his support for states’ rights, a signal to segregationists to support him (Sharon 2021). As his campaign moved forward, he became ever-more explicit in his racist appeals. He painted a picture of a “Chicago welfare queen,” who drove a Cadillac while using 80 different names to receive Medicaid, food stamps, and welfare totaling over $150,000 annually and of “a strapping young buck” buying T-bone steaks (presumably with food stamps) while the implied hardworking white person whose taxes provided the food stamps could only afford to buy hamburger for their family (Haney López 2014).

The key to the effectiveness of dog whistles is to deny that they have anything to do with race. It is common to hear political and economic leaders claim that it is in fact the people calling out the racism that are racist. Fortunately, we have the words of one of these conservative political leaders who was willing to admit this was indeed what they were doing. According to Lee Atwater, they had to adjust the way they used race in their electoral strategy:

You start out in 1954 by saying, “Nigger, nigger, nigger.” By 1968 you can’t say “nigger”—that hurts you, backfires. So, you say stuff like, uh, forced busing, states’ rights, and all that stuff, and you’re getting so abstract. Now, you’re talking about cutting taxes, and all these things you’re talking about are totally economic things and a byproduct of them is, blacks get hurt worse than whites.… (Perlstein 2012)

This shift can also be seen in the work of MacLean (2021). She describes how white supremacists—who wanted to maintain Jim Crow segregation in education and who had been explicitly using race to resist the Brown v. Board of Education decision—learned from Milton Friedman that they could make more progress by using more “neutral” language. They thus began saying “personal liberty,” “government failure,” and the “need for market competition” to move toward school vouchers and private schools to preserve Jim Crow segregation.

In many of the Southern states with the largest Black populations—such as Mississippi, Louisiana, and Georgia—state legislatures have been more likely to implement regressive policies that produce higher negative outcomes such as poverty, food insecurity, incarceration, reliance on fees and fines to fund government, high infant and maternal mortality, and a host of other negative outcomes. Although all low- and middle-income Southerners are negatively impacted by these policies, Black Southerners experience the worst outcomes.

Despite large and growing Black and brown populations in many Southern states, communities and workers of color still struggle to enact policy changes that would improve their economic conditions. One reason for this is state lawmakers—who are overwhelmingly white—enacting “preemption” laws to prevent elected officials in cities and counties from enacting their own local policies. Southern legislatures have preempted local governments from passing laws on everything from environmental protections and progressive taxes to minimum wages and paid sick day requirements (Blair et al. 2020). State lawmakers further interfere with these communities’ ability to improve economic conditions through restrictions on voting and practices such as gerrymandering legislative districts. Gerrymandering disempowers and dilutes the voting power of Black and brown communities, denying them greater representation in state legislatures. Yet the Black and brown populations of cities, counties, and states across the South will keep growing—even as state lawmakers continue their efforts to prevent them from deviating from the Southern economic development model.

Civil rights and labor rights

While the fight for civil rights is often discussed separately from the fight for workers’ rights, these movements have often been one and the same. Race and racism have been leveraged to weaken both movements. Dr. Martin Luther King Jr., the face of the Civil Rights Movement in the 1950s and 1960s, was standing with striking sanitation workers in Memphis when he was assassinated. He was fighting for the poor and for workers and families independent of race and ethnicity.

Whenever civil rights and labor leaders have been able to bring Black and white workers together to fight to improve their working conditions, Southern elites wielded notions of white supremacy and implemented policies to undermine labor generally and labor unions specifically. This was designed to ensure permanent divisions along racial lines and maintain Jim Crow race and labor relations (Pierce 2017). While right-to-work laws were pushed across the country, they initially took root in the Southern states where—due to racial terrorism, poll taxes, literacy tests, and outright violence—most Black people (and many poor white people) could not vote. Working together would have empowered both Black and white workers, but it also would have undermined the racial order in the South.

According to Pierce (2017) and Griffith (1988), while unions like the Congress of Industrial Organizations (CIO) were organizing both Black and white workers, the Christian American Association was raising money from wealthy Southern planters and industrialists to get anti-union laws enacted. This same group was also enlisted to help fight against the New Deal. Similarly, when Black and white workers came together to form the Knights of Labor following the Civil War in Virginia, Black voters were disenfranchised once white politicians were able to regain control of state government and white workers were offered privileges not available to Black workers to maintain the racial hierarchy (Scribner 2021).

Opponents to interracial solidarity and union organizing warned:

White women and White men will be forced into organizations with Black African apes…whom they will have to call ‘brother’ or lose their jobs. (Pierce 2017)

Other material designed to maintain the racial divisions include Figure B, a flyer produced to motivate support for right-to-work in North Carolina, which highlights that George Benjamin, a Black man, would be in charge of organizing white workers.

Figure B. This flyer was an effort to mobilize racial prejudice against the CIO. The irony here is that, according to Griffith (1988), the Tobacco Workers International Union under criticism was an American Federation of Labor (AFL) affiliate, one which did not share the CIO’s progressive position on interracial organizing. (Photo by David Haberstich. Courtesy of Donald McKee, cited in Griffith 1988.)

In 1944, Arkansas and Florida became the first two states to adopt the anti-worker right-to-work laws. When the key leader of these efforts, Vance Muse, was called out for his use of racism to achieve his goals, he reportedly said “They call me anti-Jew and anti-nigger. Listen we like the nigger—in his place” (Pierce 2017).

Southern politicians and employers were not only interested in using their state and local policies to maintain the racial hierarchy; they also wielded power at the national level as well, threatening to oppose federal legislation that did not exclude Black workers and families from the protections and benefits of federal laws. The exclusion of Black workers was not explicit in the legislation. Testimony and debates over federal legislation leaves little doubt about their goals, however. For example, when the Fair Labor Standards Act was being debated, Southern Democrats threatened to tank the legislation if Black workers were included:

The organized Negro groups of the country are supporting [the FLSA] because it will, in destroying state sovereignty and local self-determination, render easier the elimination and disappearance of racial and social distinctions…. (Congressman Cox of Georgia, cited in Perea 2011)

Another congressman, Representative J. Mark Wilcox of Florida remarked:

There has always been a difference in the wage scale of white and colored labor. So long as Florida people are permitted to handle the matter, this delicate and perplexing problem can be adjusted; but the federal government knows no color line and of necessity it cannot make any distinction between the races. We may rest assured, therefore, that …it will prescribe the same wage for the Negro that it prescribes for the White man. …Those of us who know the true situation know that it just will not work in the South. You cannot put the Negro and the White man on the same basis and get away with it. (Perea 2011)

It was not just politicians; however, employers shared the same sentiments with one employer stating:

A Negro makes a much better workman and a much better citizen, insofar as the South is concerned, when he is not paid the highest wage. (Perea 2011)

These attitudes and threats to the passage of important legislation was not limited to the FLSA. The same threats were made to ensure the exclusion of agricultural and domestic workers—jobs primarily filled by Black men and women across the South—from the protections of the National Labor Relations Act. As noted above, racism and maintaining the racial hierarchy in the South was at the root of many policies including taxation, policing, and economic policies. In institution after institution, efforts were made to ensure that Black labor could be extracted as cheaply as possible. And while there was also a great desire to get white labor cheaply as well, there was a clear sense that white workers must always be above Black workers to maintain the racial hierarchy (Perea 2011; Dixon 2021).

The changing demography of the South is an opportunity to uplift everyone

The American South is a dynamic region of the country with a growing population that is increasingly diverse. Made up of 16 states and the District of Columbia—including Texas and Florida, two of the largest states in the country—the South is home to almost four in 10 Americans. These are Americans whose lives and livelihoods are heavily shaped by the state and local policies implemented across the region. Not only is the South the largest region of the country, but it is also the fastest growing. Figure C shows that over the last few decades the share of the population living in the South grew faster and larger than the population of any other region. In fact, the share of Americans living in the Midwest and the Northeast declined.

Figure C

This growth in the population of the South reflects a natural increase in the region—more births than deaths. It also reflects international immigration–especially across the Southern border from Mexico, Central and South America, and the Caribbean—as well as domestic migration to the region. While politicians point to population growth across the South to argue for the positive impacts of their policies, this increase tends to be concentrated in specific states and cities. For example, while Texas and Florida had the highest population growth from 2021 to 2022, Louisiana, West Virginia, Maryland, and Mississippi were in the top 10 for population decline (U.S. Census Bureau 2022).

Many of those moving to the South from other regions, including New York and California, are seeking cheaper housing (Henderson 2016). Land generally tends to be cheaper across the South, contributing to housing that is much more affordable than places like California and New York. Texas and Florida also benefit from immigration across the Southern border and the Caribbean.

The widespread use of air conditioning during the 1960s and 1970s further contributed to population growth across the region. The oppressive heat during summer months along with high humidity left many Southerners in misery. This has been fundamentally changed, however, by air conditioning in cars, homes, and businesses (Arsenault 1984). As Figure C shows, before 1980 the share of the population living in the South fluctuated around 30–31%. From 1980 onward, it has continued to increase in each subsequent decade.

This report highlights the true origins of key components of the failed Southern economic development strategy—the extraction of labor from Black Americans after the end of slavery and from Black and brown Americans today as cheaply as possible. The emphasis on low wages, lack of regulation, regressive taxation and giveaways to corporations has not, and cannot, produce broadly shared prosperity. It was never designed to do so.

The youthful and increasingly diverse population across the South, however, presents a great opportunity to shift the policy landscape across the region. While wealthy and powerful people across the region have fought long and hard to keep the people divided and to maintain the racial hierarchy that maintains these divisions, Southerners can choose a different way forward. Southerners can demand an economic strategy that raises wages, strengthens the safety net, implements fair and progressive taxation, and perhaps most importantly, empowers workers to act on their own behalf by unionizing. This approach can help eliminate the racial hierarchy that holds all Southerners back from an economically secure future. But, as long as the powerful can keep low- and middle-income Southerners focused on racial, political, and economic divisions, they can keep them from seeing what they have in common: They are all being exploited by those at the top.

Notes

1. Enslaved men and women might be “hired out” to a third party if their labor was not immediately needed. In some instances, they might be allowed to retain a portion of the money generated (Butler 2022).

2. See Cooper and Kroeger 2017 for descriptions of other forms of wage theft.

3. While “Cancer Alley” is a high-profile area in the environmental racism literature, Terrell and St. Julien (2023) report that there are other industrial areas of the state with higher exposure to these toxins.

4. As of September 1, 2023, the sales tax on food in Alabama dropped from 4.0% to 3.0%. For more information, see Sell 2023.

5. North Carolina has adopted the expansion of Medicaid, but as of September 2023, it had not yet been implemented; implementation is dependent on the passage of the 2023–2024 budget. Virginia and Oklahoma adopted the Medicaid expansion in 2016 and 2021, respectively (KFF 2023).

6. ADC was changed to AFDC in 1962.

7. The remaining states spending 10% or less of funds in direct assistance were primarily in the Midwest, with two in the Northeast. The Midwestern states spending 10% or less are North Dakota, Michigan, Illinois, Indiana, Missouri, and Kansas. The Northeastern states are Connecticut and New Jersey. See the complete map here.

8. “Other” includes a wide range of expenditures across states, but can include short-term benefits for families in crisis; transfers to the social services block grant; after school programs; pregnancy prevention; and programs promoting two-parent families (Azevedo-McCaffrey and Safawi 2022).

9. States can carry unspent federal TANF dollars over into future years.

10. To a see graphic representation of change in the real value of TANF benefits, see here.

11. Mast (forthcoming a) is a fact sheet focused on mass incarceration and how it continues the tradition of extracting cheap labor from primarily Black Americans in states across the South. It describes ways that Black Americans continue to have their labor extracted by the state or leased out to private companies.

12. Hickey forthcoming includes fact sheets that will address the experiences of immigrant workers and provide a deep dive on domestic workers and food processing workers, especially meat processing workers.

13. Arkansas Department of Human Services 2023 and Reuters Fact Check 2022 are examples of these dog whistles.

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There has been little progress in narrowing this gender wage gap over the past three decades, as shown in Figure A. While the pay gap declined between 1979 and 1994—due to men’s stagnant wages, not a tremendous increase in women’s wages—it has remained mostly flat since then.

Figure A

The gender wage gap persists across the wage distribution 

The experience of men and women across the wage distribution differs considerably, but the gender wage gap persists no matter how it’s measured. Women are paid less than men as a result of occupational segregation, devaluation of women’s work, societal norms, and discrimination, all of which took root well before women entered the labor market.  Figure B shows that women are paid less than men at all parts of the wage distribution.

The wage gap is smallest among lower-wage workers, in part due to the minimum wage creating a wage floor. At the 10th percentile, women are paid $1.86 less an hour, or 12.8% less than men, while at the middle the wage gap is $3.87 an hour, or 14.9%. These low- and middle-wage gaps translate into annual earnings gaps of over $3,800 and $8,000, respectively, for a full-time worker. The 90th percentile is the highest wage category we can compare due to issues with topcoding in the data, which make it difficult to measure wages at the top of the distribution, particularly for men. Women are paid $14.74 less an hour, or 22.6% less, than men at the 90th percentile. That would translate into an annual earnings gap of over $30,000 for a full-time worker. 

Figure B

Women are paid less than men at every education level 

Despite gains in educational attainment over the last five decades, women still face a significant wage gap. Among workers, women are more likely to graduate from college than men, and are more likely to receive a graduate degree than men. Even so, women are paid less than men at every education level, as shown in Figure C. 

Among workers who have only a high school diploma, women are paid 21.3% less than men. Among workers who have a college degree, women are paid 26.8% less than men. That gap of $13.52 on an hourly basis translates to roughly $28,000 less annual earnings for a full-time worker. Women with an advanced degree also experience a significant the wage gap, at 25.2% in 2023. What’s very stark from the data is that women with advanced degrees are paid less per hour, on average, than men with college degrees. Men with a college degree only are paid $50.37 per hour on average compared with $48.21 for women with an advanced degree.  

Figure C

Black and Hispanic women experience the largest wage gaps 

If the overall gender pay gap isn’t enough cause for alarm, the wage gaps for Black and Hispanic women relative to white men are even larger due to compounded discrimination and occupational segregation based on both gender and race/ethnicity. In Figure D, we compare middle wages—or the average hourly wage between the 40th and 60th percentile of each group’s wage distribution—for white, Black, Hispanic, and Asian American/Pacific Islander (AAPI) women with that of white men. 

White women and AAPI women are paid 83.1% and 90.3%, respectively, of what non-Hispanic white men are paid at the middle. Black women are paid only 69.8% of white men’s wages at the middle, a gap of $8.65 on an hourly basis which translates to roughly $18,000 less annual earnings for a full-time worker. For Hispanic women, the gap is even larger at the middle: Hispanic women are paid only 64.6% of white men’s wages, an hourly wage gap of $10.15. For a full-time worker, that gap is over $21,000 a year. 

Figure D

These pay gaps are even larger when examining average hourly wages for all workers instead of just the average for middle-wage workers because of the disproportionate share of highly paid workers who are white men, which pulls up their average. Using the average measure, Black and Hispanic women are paid 63.4% and 58.3%, respectively, of white men’s wages, an hourly wage gap of $14.80 for Black women and $16.90 for Hispanic women. Even when controlling for age, education, and geographic division, Black and Hispanic women are both paid about 68% of white men’s wages. In other words, very little of the observed difference in pay is explained by differences in education, experience, or regional economic conditions. 

Policymakers must pursue a range of options to close the gender pay gap 

There is no silver bullet to solving pay equity, but rather a menu of policy options that can close not only the gender pay gap but also gaps by race and ethnicity. These include requiring federal reporting of pay by gender, race, and ethnicity; prohibiting employers from asking about pay history; requiring employers to post pay bands when hiring; and adequately staffing and funding the Equal Employment and Opportunity Commission and other agencies charged with enforcement of nondiscrimination laws. 

We also need policies that lift wages for most workers while also reducing gender and racial/ethnic pay gaps, such as running the economy at full employment, raising the federal minimum wage, and protecting and strengthening workers’ rights to bargain collectively for higher wages and benefits. 

We find that following the severe impact of the pandemic, Hispanic workers have enjoyed a strong rebound as a result of a historic stretch of job creation. But persistent labor market disparities continue to translate into broader income and poverty disparities for Hispanic people. Narrowing these disparities, which leave Latinx workers and families vulnerable to economic shocks, will require a commitment to strengthen the U.S. social safety net once again and to bolster labor laws to protect the right of Latinx workers to organize and join unions.

The strong labor market recovery has boosted Latinx workers  

Hispanic workers and families were severely impacted by the pandemic and its economic effects. Yet, the bold policy response, which included relief measures and aid to state and local governments, helped improve the economic security of Hispanic families and drove a recovery several times faster than the prolonged recovery from the Great Recession.

Since its peak at the height of the pandemic, the Hispanic unemployment rate has declined by about three-quarters, from 18.8% in April 2020 to 4.6% in September 2023. The magnitude of the decline has been even steeper for Hispanic women, who were hit hardest by the pandemic recession because they are heavily represented in industries and occupations that leave them vulnerable to economic shocks. Overall, the share of unemployed Hispanic women has dropped from 20.2% in April 2020 to 4.3% in September 2023 (see Figure A).

Figure A

Similar progress is also evident in more comprehensive assessments of the employment gains. Hispanic women experienced the largest employment loss during the pandemic contraction, as their employment-to-population ratio declined from 59.1% in February 2020 to 45.2% in April 2020 (see Figure B). But a historic stretch of job creation has restored the employment losses of Hispanic women as their employment-to-population ratio has fully rebounded to 59.1%. A similar recovery is observed for Hispanic women of prime working age (between 25 and 54 years old) with a job. While the overall employment-to-population ratio of Hispanic men in September 2023 (76.1%) still lags behind the pre-pandemic level of 78.2%, the share of prime-aged Hispanic men with a job has fully recovered to 87.6% in September 2023.  

Figure B

While Hispanic men and women continue to benefit from the strong recovery after the pandemic, labor market disparities remain. As evidenced in Figure A above, Hispanic men and women are 22.9% and 53.6% more likely to be unemployed than their white peers, respectively. These disparities can be found across states. In the second quarter of 2023, 23 states had Hispanic unemployment rates above 4%, and in some states—like Rhode Island and New York—Hispanic workers were more than twice as likely to be unemployed than their white peers.

Hispanic adults and children face higher levels of poverty

Structural disparities in the labor market and the broader American economy leave Latinx households more economically insecure than their white, non-Hispanic peers. For example, the median annual household income for Hispanic families rose slightly from $62,520 to $62,800 between 2021 and 2022. Yet, Hispanic households still earned just 77 cents for every dollar earned by the median non-Hispanic white household.

These income disparities translate into broader poverty inequities among Hispanic individuals and children (see Figure C). The expansion of the social safety in response to the pandemic substantially decreased the share of all Hispanic people experiencing economic deprivation, with an even larger impact among children. However, the rollback of these public programs and benefits—including the expanded Child Tax Credit—led to a reversal of these gains. The Hispanic community was hit hardest, with poverty rates climbing from 11.2% to 19.3%—a figure surpassing the pre-pandemic rate of 18.8%. The poverty rate for Hispanic children jumped even higher, from 8.4% to 19.5%.  

Figure C shows that Hispanic individuals were about 2.1 times more likely to live in poverty than non-Hispanic whites between 2019 and 2022. Hispanic children were about 2.7 times more likely to live in poverty than non-Hispanic white children in 2022. Without intentional and specific policy interventions that have proven to effectively reduce poverty, the economic well-being of Latinx people will continue to be shaped by the structural inequities that reproduce disadvantages throughout the U.S. economy.  

Figure C

Unions help narrow the economic disparities that hurt workers and their families  

Protecting the right of workers to organize and join unions is an integral part of empowering the Latinx community to forge political and economic power to make a fairer U.S. economy.

Union membership gives workers the legal right to collectively bargain over their working conditions, providing them with significant benefits compared with non-unionized peers. Research shows that workers covered by a union contract have higher wages, more benefits, greater job security, safer working conditions, increased job satisfaction, and more. The union advantage extends beyond individual workers as well. By lifting standards across industries, unions benefit all workers through higher wages and facilitating greater economic mobility for children in both union and non-union households.

In the Latinx community, unions are a pivotal lever for promoting equity, partly due to the transparent pay standards in union contracts that help reduce racial and ethnic pay disparities. Although Hispanic union membership is slightly lower than white union membership (8.8% vs. 10.0%), Hispanic workers see a more substantial union wage premium than their non-Hispanic white counterparts (17.6% vs. 10.4%) since collective bargaining raises the wages of Hispanic workers closer to those of white workers.

But without legislative action, the pathway to building union density in the Latinx community is under threat. Between 1973 to 2022, Hispanic union membership fell significantly from 31.2% to 9.0%. This isn’t because of a lack of union support—64% of Hispanics hold favorable views of labor unions. This discrepancy is the result of decades of intensifying employer opposition to unions, underscoring the need for robust legislative action. Policies like the Protecting the Right to Organize (PRO) Act would protect workers from retaliation, ensure a fair union election process, reduce the time needed to negotiate a union contract, and thus safeguard the Latinx community’s access to the empowering force of unions and collective action.

Conclusion 

The ability of Latinx workers and households to navigate more than three years of economic highs and lows since the pandemic underscores their resilience. Yet, resilience is not a stand-in for policy. There is an urgent need for policymakers to address the economic disparities that disadvantage Latinx people.

Equity-enhancing policies, like the expanded Child Tax Credit that reduced poverty among Hispanic adults and children, also illustrate that the mission to eradicate poverty is a policy choice. Bolstering the rights of Latinx workers to unionize also remains fundamental to ensuring access to higher-paying, quality jobs and to narrowing earning gaps. The bold policy response to the pandemic served as a reminder that we do not need to choose between growing the economy and expanding equity.  

Note

1. “Latinx” is a gender-neutral term that may be used interchangeably with Latino/Latina or Hispanic (more here).