Since the second Trump administration swept into office in January 2025, it has undertaken a range of damaging and destabilizing actions that have weakened the economy, undermined workers, hurt businesses and consumers, and threatened core elements of our democracy. While Trump has targeted numerous Democratic-led states and cities, the Washington, D.C., region has faced acute and prolonged harms since day one. From the first set of executive actions signed on Inauguration Day, the Trump administration has attacked people and businesses in the capital region repeatedly and intensely. These initial actions announced the president’s dubious claims of authority to fire large segments of the federal workforce, eliminate long-standing federal agencies and programs, and begin a campaign of illegal and inhumane mass deportations.  

The Trump administration’s damaging actions have been enabled and abetted by Republican members of Congress. Their passage of H.R. 1, the bill that the White House has referred to as the “One Big Beautiful Bill Act” (OBBBA), amplifies the administration’s mass deportation agenda and shreds critical health care and food supports for lower-income families to finance tax cuts for the wealthy. This funding bill will only cause more pain in the years ahead for Washington, D.C.-area households and throughout the country.

Congress also passed a federal spending bill that constrained the District of Columbia’s ability to spend its own tax revenue (Koma 2025) and a resolution that may force the district to adopt local tax code changes that match the OBBBA, whether the city wants to or not—changes that will jeopardize hundreds of millions of dollars for city programs (D.C. Fiscal Policy Institute 2026).

In this report, we assess the early indicators of the damage of Trump’s actions and their effects on the Washington, D.C., regional economy, with particular attention to effects on workers and the labor market. We focus on this region due to its prominence as an early target of the Trump administration, in part due to its large federal workforce. Additionally, the district’s unique status as a non-state means that its leaders have far less legal authority to resist Trump’s interference than other target areas do.

Throughout this report, unless otherwise indicated, the data describe economic conditions for the Washington, D.C., metropolitan statistical area (MSA), which includes the District of Columbia, four nearby counties in Maryland, six cities and 11 counties in northern Virginia, and one county in West Virginia. We also refer to this region as the DMV (Washington, D.C.; Maryland; and Virginia). While we do not yet have the requisite data to fully and precisely document all the effects of the administration’s actions, we can see clear signals that the regional economy is already struggling, with more severe impacts likely to register in the data soon.

We then explore some of the factors that make other regions particularly vulnerable to significant economic harm from the Trump administration’s agenda. These include counties with large concentrations of federal workers, areas where federal transfer income (such as Medicaid and Social Security) makes up a significant portion of the region’s economic base, and places with significant immigrant populations. Though Trump has largely targeted prominent, Democratic-led areas, many of the regions most susceptible to the harmful economic consequences of the administration’s actions are rural counties, frequently represented in Congress by Republicans.

Trump’s actions in Washington, D.C., have led to reduced employment and rising unemployment

The clearest sign of the harm that the Trump administration’s actions have done to the Washington, D.C., regional economy is the substantial drop in the region’s employment rate. Based on EPI analysis of Current Population Survey data from the Bureau of Labor Statistics, from December 2024 to December 2025, the share of the regional working-age population with a job fell by 3.2 percentage points.1 As shown in Table 1, this compares with a decline of just 0.4 percentage points for the country over the same period. Among prime-age workers (those ages 25–54), the share employed in the DMV fell by 2.7 percentage points, compared with a decline of just 0.1 percentage points for the country overall.

This dramatic drop in regional employment is a direct result of the Trump administration’s relentless attacks on federal government workers, cuts to federal programs and agencies, and their cascading effects on connected regional industries. Prior to Trump’s taking office, federal employees made up 11.2% of the metro area’s total workforce (BLS-CES-SAE 2025).2 Between the end of 2024 and 2025, federal employment in the DMV region fell by more than 53,800 jobs (-14.2%) (BLS-CES-SAE 2026).3 These losses reverberated through the regional economy as affected households pulled back on spending, and many may have even opted to move, as data show the DMV region had the largest increase in home sale listings of any major metro last year (Brookings Institution 2026).

These significant cuts to federal employment, though highly damaging on their own, are only the first layer of the administration’s harm on the regional labor market. The DMV has a non-federal workforce of over three million people (BLS-CES-SAE 2026), many of whom work at firms that consult with, contract with, are funded by, or are otherwise connected to the government.4 The Trump administration has terminated thousands of grants to scientific research institutions (Kozlov, Tollefson, and Garisto 2026) and frozen or delayed funding for tens of thousands of nonprofit organizations, causing those targeted to limit operations or lay off staff (Tomasko et al. 2025). These cuts have also shrunk the funding pool for nonprofit groups, causing budget challenges even for those not previously receiving federal funding, as they must compete with groups previously funded through federal programs that are now scrambling to fill gaps with private support (Barrett 2025). The administration has also moved to cancel contracts with any company that maintains a commitment to DEI standards (Singh 2026). Although these cuts affect organizations everywhere, the DMV is disproportionately vulnerable to the economic harms of attacks on this sector as it has one of the highest concentrations of nonprofits in the country (Friesenhahn 2025). This is evident in the region’s slight dip (-0.3%) in private-sector employment from December 2024 to December 2025, a change from the consistent, albeit slowing, growth that had marked the years following the COVID-19 pandemic. At the national level, private-sector employment experienced slow but still positive change (0.5%) over the same period (BLS-CES-SAE 2026).5

The widespread impact of the administration’s actions can be seen in the breadth of employment declines across racial, ethnic, gender, and age groups in the region. As shown in Table 1, the employment rate fell by at least 2 percentage points for every demographic category of workers in the DMV. Notably, young workers under age 25 (-4.3 percentage points), workers age 55 and older (-3.3 percentage points), men (-3.5 percentage points), and Black workers (-5.9 percentage points) all experienced drops in their employment rates larger than the regional average. For older workers, the above-average decline likely reflects, at least in part, the firings and retirements of many federal employees, including many who had been near retirement age and opted into the so-called “Fork in the Road” deferred resignation program. For young workers, the administration’s funding and programmatic cuts directly reduced many traditional Beltway early-career opportunities (internships, fellowships), while weakness in the broader regional economy simultaneously forced area employers to pull back on entry-level positions.

Still, not all groups have been equally affected by Trump’s actions. As Table 1 shows, Black workers in the DMV region have suffered the largest employment declines, with the share employed falling by 5.9 percentage points in 2025. This is nearly triple the employment drop experienced by white workers (2.0 percentage points) in the region and, notably, more than seven times the employment drop of Black workers throughout the country overall (0.8 percentage points). Again, this is a direct consequence of the administration’s attacks on the federal workforce. Black workers have long tended to make up a larger share of the public sector than they do in the private sector—both in the DMV and across the country. This is because the public sector has historically been a pathway to the middle class for workers of color who face labor market discrimination in the private sector (Maye and Marvin 2025).

Trump’s massive cuts to federal employment have also rapidly undone what had been considerable progress in shrinking the regional Black-white employment gap. Figure A shows the employment rate of DMV workers, overall and by race/ethnicity, since the end of 2018. The rapid drop in the Black employment rate since the start of President Trump’s second term is striking, bringing the regional Black employment rate back down to its pandemic-era low. It is also notable that before that drop began, Black workers in the region were employed at essentially the same rate as their white counterparts—the only time in the last two decades when that occurred. These losses in employment will exacerbate existing racial and gender inequity across wages, poverty, and unemployment (Markoff and Zielinski 2026; Zielinski 2025; Busette and Elizondo 2022).

Recent increases in the DMV’s overall unemployment rate underscore the damage Trump is doing to the region. The non-seasonally adjusted unemployment rate jumped more than a full percentage point, from 3.1% in January 2025 to 4.4% in January 2026—more than four times the increase in the national figure. (Importantly, this increase understates the weakening of the area labor market, as the BLS estimates the DMV labor force shrank by 3% over the same period—meaning that many workers who would have been counted as unemployed simply left the area labor force.) For comparison, the national non-seasonally adjusted unemployment rate increased by less than half a percentage point, moving from 4.4% in January 2025 to 4.7% in January 2026 (BLS-LAUS 2026).

These numbers do not capture the full extent of the economic downturn in the DMV area, nor can they give us precise insight into where the pain has been most acutely felt. The administration’s violent deportation agenda, for example, will lead to a drop in immigrant and U.S.-born Hispanic workers’ employment, but resulting changes in Hispanic employment rates may be muted by the corresponding shrinking of the overall Hispanic population (Zipperer 2025). In other words, while the overall Hispanic population in the U.S. may fall dramatically in coming years, the ratio of remaining employed workers to remaining total population may stay somewhat consistent. This will mask the true scale of the economic and social harm being done to immigrant communities in the DMV and across the country.

It is also difficult to fully quantify how the deployment and continued presence of National Guard troops, violent immigration actions, and other authoritarian, fear-inducing tactics have impacted D.C.-area businesses, workers, and families, particularly in neighborhoods with predominately Black and Latino populations. Early data show regional declines in tourism, consumer spending, and foot traffic; harder to capture are the emotional and long-term economic consequences (Montgomery 2025; Hadden Loh and Haskins 2025; Sachs and Cocco 2025). Other recent analyses estimate similar economic harms in cities where targeted federal immigration enforcement actions have been aggressively deployed (Rosenthal and Sojourner 2026). A full accounting of the Trump administration’s harms on the Washington, D.C., region will take years to document.

Other localities should brace for similar consequences

Some of the Trump administration’s actions and their acute consequences are unique to the DMV, a function of the region’s high concentration of federal employees and government contractors, as well as the District of Columbia’s lack of statehood and full constitutional rights. However, the anti-government attacks the administration has unleashed on DMV-area households, workers, and businesses will have cascading consequences for communities throughout the country. The effects of the administration’s authoritarian attacks on the civil service, democratic institutions, and immigrants (Human Rights Watch 2026) that first registered across the DMV should be viewed as a preview of the consequences that will be felt in other regions. While no locality will be spared, regions particularly at risk include those with large shares of government workers (especially federal workers, but state and local government workers too), localities in which federal funding and social safety net programs make up a large portion of total area income, and those with large immigrant populations.

Trump’s attacks on the federal workforce will harm communities that rely on their employment

The day Trump returned to power in January 2025, he began attacking the federal workforce, first by moving to reclassify tens of thousands of federal employees to make it easier to fire and replace them with political loyalists (EPI 2026c), and then by stripping more than one million federal workers of their collective bargaining rights (EPI 2025a). The Trump White House subsequently worked feverishly to slash federal employment, attempting large and chaotic reductions in force, shuttering entire agencies, and coercing tens of thousands of staff to resign, among many other attacks (Poydock 2025). As of March 2026, the administration’s actions have reduced nationwide federal government employment by over 350,000 (11.7%) since January 2025 (Gould 2026).

Though federal workers make up a sizeable share of the DMV’s workforce, over 80% of federal workers live outside the region (Partnership for Public Service 2024). For instance, in Alaska, Hawaii, and New Mexico—states that are home to large swaths of federal and Native land, military bases, and federal research institutions—federal workers make up at least 4.5% of total employment (EPI 2025c). Within states, federal workers tend to be concentrated in specific localities. For instance, in Apache County, Arizona, which is largely made up of the Navajo Nation and the White Mountain Apache Reservations, lands that extend beyond county lines, the federal government employs 12% of the county’s workers, more than double the next most significant county for federal worker employment in the state (EPI 2025c). There are 22 U.S. counties, spread across the South, Midwest, and West Census regions, where federal workers comprise at least 10% of the county’s workforce (see Table 2).

In these counties and elsewhere, federal workers are the backbone of the regional economy, both through the essential services they provide and through their contributions to the local economy. Trump’s attacks simultaneously threaten federal workers’ livelihoods and the economic health of communities in which these workers’ spending on goods and services makes up a large share of economic activity in the region. In Apache County, Arizona, civilian government workers’ earnings comprise 11.7% of total economic activity in the county (see Table 3)—roughly the same as their share of overall county employment. However, in some counties, federal employees’ earnings are a disproportionate share of the regional economic base. For instance, in Leavenworth County, Kansas, where federal employees make up 10.0% of employment (Leavenworth has a large federal prison), federal civilian earnings comprise 22.1% of total income in the county.

The effects from lost federal jobs and income in these regions could be devastating. Some of these communities are places that have already faced historic disinvestment and in which there are few local employment opportunities that can match the quality of federal government jobs. These jobs are historically stable, good quality, union jobs that offer a pathway to the middle class, particularly for workers without a college education.6

Regions highly dependent on federal revenue will also suffer from a reduction in services and a loss of income

Beyond the harm to localities from reductions in the federal workforce, localities that are particularly reliant on federal government revenue and services will bear the consequences of Trump’s actions most acutely, though no locality will be spared from harm. For example, the Trump administration has announced or considered $23 billion in cuts to federal clean energy projects in nearly every state (CATF 2025) and $8 billion in cuts to colleges and universities that will impact every state’s economy (Bedekovics and Ragland 2025). Trump’s 2025 budget bill also made massive cuts to federal safety net programs that millions of low-income households rely on in order to finance tax cuts for the wealthiest households and corporations.

Funds from federal programs such as SNAP, Medicaid, and other social programs not only help struggling families make ends meet, they also comprise a significant share of a locality’s “economic base,” the amount of money circulating in that region, as shown by sociologist Robert Manduca in a recent working paper (2025). Indeed, an often-overlooked benefit of Medicaid coverage is its role as a source of income for low-income households (money they would have had to spend on medical care in the absence of Medicaid). For the bottom 20% of households in the U.S., Medicaid comprised 70% of their total money income, based on recent data from the Congressional Budget Office (Bivens, Wething, and Morrissey 2025). In fact, government transfers such as Social Security, Medicare, and Medicaid collectively made up 40% of the economic base of U.S. regions in 2022 (Manduca 2025). Substantial cuts to government social programs that support low-income households could reduce the economic base of these localities, at a scale equivalent, in many cases, to the loss of entire private industries in those areas.

Without deliberate intervention by state lawmakers to offset lost federal revenues, localities in every state face dire economic losses, but states particularly reliant on government transfers will suffer most. For instance, take Clay County, West Virginia, which is represented in Congress by Rep. Carol Miller (R-WV01), who voted in support of Trump’s budget bill (Miller 2025). Clay County’s poverty rate is more than double the national rate, and its per capita income is half the national amount (U.S. Census 2024a). Of the 10 U.S. counties that rely most on each of the largest federal social insurance programs (Medicare, Medicaid, SNAP, and Social Security) as a share of their economic base, Clay is the only county in the country to show up three times (see Table 4). Federal government transfers in the form of Medicare, SNAP, and Social Security payments comprise 57% of Clay County’s economic base, 20 times the share comprised by the earnings of every private industry in the county combined. Alaska, Arizona, Florida, Georgia, Kentucky, Tennessee, and West Virginia all have at least three counties that are ranked in the top 10 in the country for their reliance on a given social safety net program as a share of the county’s economic base (see Table 4).

Localities that have significant shares of federal workers and rely heavily on federal government transfers may face particularly significant consequences as a result of Trump’s attacks on the federal workforce and the Republican budget bill’s cuts to essential social safety net programs. For example, in Rio Arriba County, New Mexico, and Apache County, Arizona, federal government workers make up 16.1% and 12.0% of all workers in the county, respectively (EPI 2025b). At the same time, both counties are ranked in the top-10 counties most reliant on federal government transfers—Apache is #2 for Medicaid, and Rio Arriba is #10 for SNAP. In Apache County, federal government transfers account for three-quarters (76.9%) of the county’s economic base, and the earnings of federal government civilian workers account for 11.7%—the Navajo Nation Tribal Government is the county’s largest employer (NACOG 2023). Meanwhile, private earnings account for a mere 2.8% of the county’s economy. In Apache, Trump’s cuts to both the federal workforce and federal government programs mean that the federal government may be unable to fulfill its legal obligations to tribal communities (Brown 2025) that have faced decades of disinvestment and depressed economic outcomes resulting from historic land theft and forced assimilation. Apache County’s poverty rate of 31.2% (AZ Economics 2026) is nearly triple the national rate of 11.1% in 2023 (Shrider 2024).

Trump’s anti-immigrant crackdown and deportation agenda hurt localities with large immigrant populations

Trump has launched a campaign of terror against immigrant communities, communities of color, and those who stand with them. Last summer, Trump federalized local police and deployed thousands of federal troops to diverse cities with large immigrant populations (Kim 2025). Though Washington, D.C., may have experienced the most visible federal troop presence, a function of the district’s lack of statehood and the president’s unchecked authority to mobilize the National Guard there (Dallas 2025), Los Angeles was the first city Trump targeted after public opposition to aggressive immigration raids (Kim 2025). It was soon followed by Washington, D.C.; Memphis, Tennessee; Portland, Oregon; New Orleans, Louisiana; Minneapolis, Minnesota; and Portland, Maine.

These attacks are characteristic of an authoritarian playbook that includes forcing the leaders of diverse, opposition-led communities to bend to the strongman government’s will (McManus, Benson, and Herman 2024). Minneapolis, home to a large immigrant population, was subjected to an unprecedented immigration crackdown that drew widespread protests (Boone 2026). During “Operation Metro Surge,” as it was called, federal immigration enforcement officials made 4,000 arrests and killed two U.S. citizens. Though the true toll of this violent operation may never be fully quantified, initial economic data show clear cause for concern. A recent analysis estimated that Trump’s immigration crackdown has led to a 2.9% decline in consumer spending in Minnesota over a single month—the equivalent of the state’s economy losing $626 million (Rosenthal and Sojourner 2026). Relative to overall consumer spending, the food and accommodation sector (which employs a large share of immigrant workers) saw the most significant decline in January 2026—3.8% or a $46 million reduction in economic activity. Researchers also estimated that nearly 3% of workers in the Minneapolis-Saint Paul region were unable to work during the occupation, resulting in a loss of over $100 million in wages (Sojourner and Rosenthal 2026).

Trump’s deportation agenda will continue to destabilize local communities and result in job losses for immigrant and U.S.-born residents alike (Zipperer 2025). Though immigrants live in counties across the U.S., coastal urban areas tend to have the largest shares of foreign-born residents. Counties with the largest foreign-born populations include Miami-Dade, Florida; Queens, New York; Aleutians, Alaska; and Hudson, New Jersey (see Table 5). Counties with relatively large shares of immigrants may see particularly acute harms from aggressive immigration enforcement.

Communities face overlapping economic threats from attacks on federal workers, the social safety net, and immigrants, but state and local lawmakers can resist them.

The Trump administration’s attacks on the federal workforce, the social safety net, and immigrant communities are designed to exacerbate economic precarity in many communities that are already struggling (Bivens 2026). The implementation of Trump’s authoritarian agenda in the DMV region may be the first, clearest, and in some cases most direct manifestation of its harms, but other localities across the country—particularly those with large federal workforces, those that are heavily dependent on federal revenue and those with sizeable immigrant populations—are far from immune, and many will suffer as much, if not more, from this agenda.

While state and local leaders cannot stop federal attacks, they do have the power to resist Trump’s agenda by improving state labor standards (EPI 2026b), advancing protections for immigrant workers (Díaz and Whitaker 2026), investing in the public-sector workforce (Bivens and Shierholz 2026), and using progressive tax policies (Austin and Davis 2025) to stabilize funding for critical social programs and other investments that workers, families, and communities need.

Notes

1. Throughout this report, unless explicitly noted, the source for all employment rate data is the authors’ analysis of Current Population Survey data (EPI 2026a). We compare an average of calendar year 2025 with calendar year 2024 in order to have adequate sample sizes for the noted demographic groups.

2. Employment level by industry and sector data come from the authors’ analysis of the Bureau of Labor Statistics’ Current Employment Statistics (CES) State and Metro Area (SAE) data.

3. These numbers are calculated using monthly totals rather than annual averages. A quarterly comparison of 2025Q4 to 2024Q4 finds roughly the same results—employment fell by 52,600 jobs (13.9%). The quarterly analysis omits October in both years to maintain an apples-to-apples comparison, accounting for missing data due to the government shutdown that began in October 2025 and the subsequent lapse in Bureau of Labor Statistics funding.

4. The non-federal workforce includes private sector workers as well as state and local government employees.

5. These numbers are calculated using monthly totals rather than annual averages. Quarterly comparisons of 2025 Q4 to 2024 Q4 produce similar results—private sector employment fell by 0.1% in the DMV and grew by 0.7% nationally. The quarterly analysis follows the methodology outlined in note 2.

6. On average, federal workers with advanced degrees typically earn less in wages and total compensation than their private-sector counterparts. Federal workers without an advanced degree typically earn more than their private-sector counterparts and have access to retirement benefits that have become less common in the private sector (CBO 2024).

References

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The Fair Labor Standards Act (FLSA)—which establishes wage and hour standards that apply to most workers at private businesses with annual revenue of at least $500,000, as well as hospitals, care centers, schools, and public agencies—requires that covered employers keep employee time and pay records. Beyond this minimal recordkeeping requirement, other important questions about wage payment are left up to states. The FLSA does not specify, for example, how and whether employers make time and pay records available to employees; when or how often employees must be paid; the manner in which pay can be issued (e.g., cash, check, direct deposit, electronic pay card, etc.); whether and under what circumstances employers can take deductions from workers’ pay; and how and by when employees must be paid following separation from employment.

What are the threats to federal wage payment protections?

Current threats to wage payment protections include:

• Diminished federal Department of Labor (DOL) enforcement capacity: Wage theft is an epidemic across the country, and diminished DOL capacity to enforce federal wage and hour laws will exacerbate this problem. As of May 2025, the number of federal DOL Wage and Hour Division investigators is at an all-time low.
• Attempts to close the Consumer Financial Protection Bureau (CFPB): The 2006 Electronic Funds Transfer Act included important protections for workers who encounter fraud or abuse when attempting to access wages issued via electronic pay cards (including disclosure requirements, error resolution rights, and rights to other options for receiving pay). Trump administration efforts to eliminate CFPB may leave the federal government with little or no ability to enforce these protections.

How can states maintain and strengthen wage payment protections?

States have legal authority to establish their own wage payment standards since most issues related to wage payment are not covered by the FLSA.

Step I: Lock in and enhance federal recordkeeping requirements

At a bare minimum, all states should ensure that state code requires employers to keep detailed employee time and pay records.

• For example, California requires “payroll records showing the hours worked daily” by employees, and California wage orders contain more specific recordkeeping provisions “showing when the employee begins and ends each work period” as well as meal periods and split shift intervals (CA Code Regs Title 8, Ch. 11010, Sec. 7).

Step II: Ensure state code requires timely and accurate payment of wages for all workers

1. Require pay stubs (written wage statements) with each paycheck: Most states require employers to provide workers with a print or electronic pay stub at each payday. Pay stub requirements vary widely by state, and should at a minimum guarantee that workers receive critical information such as the rate of pay, hours worked, gross and net wages, and itemized accounting of any withholdings or deductions. The six states (Alabama, Arkansas, Louisiana, Mississippi, South Dakota, and Tennessee) that still lack a pay stub requirement should adopt one, as Ohio did recently.
2. Ensure timely pay on established paydays: State codes vary widely on the question of how frequently employers are required to pay workers and a few states lack any standard to ensure workers are paid at timely, predictable intervals. As a minimum standard, states should ensure employers are required to issue paychecks at least biweekly or twice per month on a regularly scheduled payday.
3. Regulate forms of payment to prevent wage theft: The proliferation of third-party vendors contracting with employers for payroll services that include use of electronic pay cards or debit cards has increased the risk that workers are charged fees for accessing their pay or are unable to access part or all of their wages. Eleven states already require that employers provide employees the option to receive payment of wages by check and many others set additional guardrails for the use of pay cards. For example, in Connecticut and Illinois employers can only use pay cards if they first obtain employee consent; explicitly offer direct deposit and paper check/cash as alternatives; provide clear written notice disclosing fees and terms of pay cards; and allow employees to revoke pay card authorization and switch to another method of payment at any time. Connecticut also requires that pay cards must allow at least three free withdrawals per pay period without fees.
4. Prevent unauthorized deductions from paychecks: The FLSA minimally bars employers from making deductions that bring a worker’s hourly pay below the federal minimum wage, with exceptions for the “reasonable cost” of items provided to benefit the employee, such as food or lodging. States should at a minimum prohibit employers from taking deductions from workers’ pay without clear written notice and employee authorization. For example, New York state code and accompanying regulations require employee authorization of payroll deductions and specify types of deductions considered legal or illegal.
5. Mandate prompt payment of final paychecks: To prevent the withholding of final paychecks after separation from employment (a common form of wage theft) many states set a deadline by which an employer must issue a worker’s final pay. For example, New Hampshire requires employers to issue final paychecks within three days to workers who are terminated, and no later than the next regular payday if a worker resigns. In Nevada, workers must receive a final paycheck “immediately” if they are terminated, or within a week if they resign or quit. In West Virginia, workers must receive a final paycheck on or before the next regular payday.

Step III: Strengthen wage payment accountability and enforcement

1. Require written notice at time of hire: More states should follow the lead of Minnesota and others by requiring employers to provide written notice of terms of employment at time of hire. This type of notice includes very basic information about employment terms but can be a critical tool for workers and enforcement agencies in the event that wage commitments are not met. Such notices should at a minimum specify the employer(s) name(s) and contact information; the work location, the nature of the work, and expected period of employment; the wage rate including when overtime or premium pay will apply; and benefits to be provided and at what cost (with information provided in a language understood by workers).
2. Strengthen enforcement: States have a host of opportunities to strengthen enforcement of wage payment laws, including:
   • Updating penalty frameworks to ensure fines and damages are adequate to serve as deterrents;
   • Allowing workers to pursue a private right of action (in addition to agency remedies) to address wage payment violations;
   • Enacting strong non-retaliation protections to ensure all affected workers can speak up about violations;
   • Equipping state agencies with adequate resources and staffing;
   • Pursuing joint employer liability for wage claims when necessary; and
   • Adopting tested best practices for strategic enforcement, co-enforcement, and employer and worker outreach and education.

Recommended sources for model legislation on these and related policies:

• Winning Wage Justice (National Employment Law Project)
• The DNA of Worker Rights: Key Building Blocks of California’s Model Framework of Wage and Hour Standards (UC Berkeley Center for Law and Work)
• Wage Theft Policy Playbook (State Innovation Exchange)
• The Labor Standards Enforcement Toolbox (Rutgers Workplace Justice Lab)

The 1938 Fair Labor Standards Act (FLSA) sets guidelines for the hours and nonhazardous jobs for which employers can hire minors under 16. The FLSA also empowers the Secretary of Labor to prohibit all minor employment in occupations that are particularly dangerous through “hazardous occupations orders.” It covers employers that conduct at least $500,000 in annual sales or any employees engaged in interstate commerce (this coverage is interpreted broadly with respect to child labor—if a firm engages in any form of interstate commerce, its minor workers are covered). Federal law sets an important but limited and increasingly outdated floor for child labor standards. For example, federal child labor standards in agriculture are much weaker than in nonagricultural employment, hazardous occupations orders have not been updated in decades, and there are no work hours protections for minors over the age of 15 (see Table 1).

Table 1

What are the threats to federal child labor standards?

Threats to federal child labor standards include federal proposals to weaken child labor protections and ongoing state-level efforts to erode the FLSA by proposing or enacting state child labor legislation that conflicts with federal law:

• Project 2025, the anti-worker policy roadmap being implemented by the Trump administration, proposes:
  1.  Eliminating federal hazardous occupations orders, which protect minors from employment in particularly dangerous jobs, like mining and roofing; and
  2. Allowing states to obtain waivers from the FLSA—including provisions that prevent harmful forms of child labor.

• In recent years, a coordinated, industry-backed campaign to erode child labor standards has generated proposals in dozens of states to weaken or eliminate state standards exceeding the minimal federal “floor” for child labor protections. Some state lawmakers have gone even further, proposing or enacting bills that directly conflict with federal minimum standards, while stating intent to build pressure for the eventual relaxation or elimination of FLSA standards for the whole country. Common targets for these attacks on state child labor standards include:
  • Eliminating youth work permits
  • Eliminating hours of work guidelines for 16- and 17-year-olds
  • Eliminating meal or rest break requirements for minors
  • Expanding employers’ ability to hire minors for previously prohibited hazardous jobs
  • Lowering the age at which minors can serve alcohol and/or work in establishments serving alcohol
  • Establishing or expanding laws that allow employers to pay students or other youth a subminimum wage
  • Creating new exemptions from state child labor protections, for example for homeschooled youth or youth in certain occupations
  • Creating new systems—such as unregulated “internship” or “work-based learning” programs—that allow employers to skirt child labor laws or hire minors for otherwise prohibited hazardous work

By repeatedly proposing—and in some cases implementing—standards that conflict with federal law, these states are chipping away at the already fragile federal floor for workplace protections.

How can states maintain and strengthen child labor protections?

States have legal authority to establish their own child labor standards; the FLSA sets a floor above which states can adopt and enforce their own stronger standards.

States have historically played a prominent role in setting child labor standards—some states have protections in place that predate the FLSA, and many have long legislated above federal law. Other states maintain standards that generally mirror the FLSA, with few additional protections, and some states have standards that are significantly weaker than the FLSA. In many cases, a state’s standards are stronger than the FLSA in some areas and weaker in others. When a state standard is weaker than the FLSA, federal law applies. However, since only federal agencies can enforce federal laws, state laws that fall short of federal law increase the risk of federal violations while shifting the enforcement burden to already-overburdened federal agencies. Amid Trump administration attacks, federal agencies are now facing even more pronounced staffing shortages that will further limit their enforcement capacity.

In response to increasing child labor violations, many states are already taking action to strengthen state child labor standards and enforcement. Given the very real risk that aspects of FLSA child labor protections could be eliminated (or will go unenforced), all states should at a minimum lock in existing FLSA standards and ensure state capacity to enforce them. Beyond this, states have critical opportunities and responsibilities to modernize child labor standards beyond the minimal, outdated FLSA floor to ensure that minors who must work or choose to work can access safe work experiences that don’t harm their health or education. Fortunately, state lawmakers have an array of options to consider and tested legislative models to use as a guide.

Step I: Update state statutes to lock in current federal protections.

State standards should be at least as strong as those in the FLSA. Ensuring that state standards mirror FLSA minimums protects both employers and children from the risks and confusion that arise when state standards contradict federal law. For example, after a Utah employer was fined for violating federal child labor law for incorrectly following state child labor guidelines that were weaker than FLSA standards, Utah enacted a bill to align state guidelines on hours of work for minors under 16 with FLSA standards.

Weaker standards often appear in areas of state code covering work hours or prohibited hazardous occupations. For example:

• Idaho allows employers to schedule 14–15-year-olds up to nine hours a day or 54 hours per week. Federal law allows employers to schedule 14–15-year-olds up to three hours a day or 18 hours per week in a school week and up to eight hours per day and 40 hours per week in a nonschool week.
• Iowa allows employers to hire 14-year-olds in industrial laundries and 15-year-olds in light assembly work, among other weaker standards. Federal law does not permit 14–15-year-olds to work in these settings.
• West Virginia allows employers to hire 16–17-year-olds enrolled in a “youth apprenticeship program” for all 17 hazardous occupations prohibited for minors under federal law. Federal law allows 16–17-year-olds to perform certain types of intermittent work in only seven of these occupations when enrolled in a bona fide registered apprenticeship program meeting certain stringent standards.

State policymakers should review their child labor statutes alongside federal child labor laws to identify areas of weakness. At a minimum, states should ensure that their guidelines for hours of work and hazardous occupations orders are at least as protective as the FLSA.

Step II: Close coverage gaps and address weaknesses in FLSA minimum protections

States can address many longstanding limitations and gaps in federal child labor protections. Examples of priority actions for state lawmakers to consider include:

1. Maintain effective youth work permit systems: Youth work permits have been shown to reduce child labor violations and aid in enforcement. The FLSA suggests—but does not require—that employers maintain certificates confirming the age of minors they employ. It also does not require minors to receive a permit as a condition of employment. Instead, youth work permit policies have historically been left to states. Most states already have some sort of permit system in place. Youth work permits are often simple, one-page forms that engage employers, parents, youth, and sometimes educators, in ensuring a child’s employment is legal, safe, and age-appropriate. Permits remind employers of existing child labor laws, inform parents of their child’s rights and affirm their consent, and aid state agencies in investigations of potential violations. States without work permit systems should implement them and states with existing work permit systems should assess and modernize their systems, as recently done in Illinois and New York and proposed in California.
2. Implement or expand work hour guidelines for 16- and 17-year-olds: The FLSA sets standards to protect children from excessive hours of work, especially during the school year. However, the FLSA was passed at a time when fewer than half of students completed high school, and its hours of work guidelines have never been updated to cover older minors (16- and 17-year-olds). In the absence of state standards, older teens can be scheduled to work unlimited hours per day or per week, including during school weeks. Some states have already adopted standards to address this gap, but fewer than half of states have hours guidelines in place for older teens. States should set maximum daily and weekly work hours for 16–17-year-olds and prohibit overnight work during the school week. Minimum standards should include limiting employers to scheduling 16–17-year-olds for no more than 32 hours in a school week, as nine states already do,{{1}} and prohibiting employers from scheduling 16–17-year-olds to work after 10 p.m. or before 6 a.m. (or similar), as 20 states and D.C. already do.{{2}}
3. Update prohibitions on hazardous child labor: The FLSA prohibits minors under 18 from working in a list of 17 nonagricultural occupations and 11 agricultural occupations that have been found to be particularly hazardous for minors. Many of these hazardous occupations orders have never been updated. And new orders have not been created to account for new forms of hazards in our modern economy, particularly in agriculture. Moreover, the FLSA opens the door to dangerous exemptions from some hazardous orders,{{3}} with language that allows student apprentices and learners enrolled in approved training programs to do certain types of hazardous work under close supervision. State lawmakers can update prohibitions on hazardous child labor by expanding existing hazardous orders, creating new orders to cover hazardous occupations not covered under federal law, and ending student learner and apprentice exemptions. Lawmakers can use the 2002 National Institute for Occupational Safety and Health recommendations to the U.S. Department of Labor as a guide for revising state hazardous orders. For example, Illinois recently updated and clarified state law to prohibit employment of minors in hazardous workplaces not covered under federal law, such as gun ranges and establishments primarily involved in the sale of tobacco or alcohol.
4. Extend equal protections to children working in agricultural occupations: Agriculture is the most dangerous sector of employment for minors, yet federal child labor standards remain much weaker in agriculture than in nonagricultural industries. State lawmakers can address this longstanding gap in federal law by aligning agricultural child labor standards for work hours and hazardous work with standards for nonfarm work. For example, in 2025, New Jersey lawmakers introduced a bill to raise the minimum age for agricultural employment to 14 and align work hours and hazardous work protections in agriculture with nonagricultural standards, among other updates to protections for farmworkers of all ages.
5. Increase civil penalties to deter violations and update them based on inflation: Under most existing state penalty structures, civil monetary penalties for child labor violations are very limited and, in some cases, nonexistent. Some states levy no civil penalties at all, and many states have not reviewed or updated penalty amounts in decades. In Indiana, for example, penalties range from a warning letter for an initial violation to a maximum of only $400 for a fourth violation within two years. Low or nonexistent penalties that can easily be absorbed as a “cost of doing business” do not deter employer violations and leave state enforcement agencies with few tools for ensuring compliance by bad actors. To ensure penalties serve as effective deterrents and enforcement tools, state lawmakers should set meaningful minimum penalties for first offenses and very high maximum penalties for serious or repeat offenses, as Illinois did in 2024. States can use federal civil penalties and annual adjustments as a benchmark; for example, current federal maximum civil penalties for a child labor violation range from $16,035 to $145,752, and rates are adjusted for inflation each year.
6. Strengthen state enforcement capacity and authority: Ensuring adequate state enforcement of child labor laws will become particularly important as federal enforcement capacity is diminished.
   • States should ensure funding for dedicated child labor enforcement staff so as not to take resources away from other wage and hour investigations. For example, a Virginia lawmaker recently requested an increased budget appropriation for child labor enforcement.
   • States should grant labor agencies sufficient authority to fulfill enforcement goals. For example, Nebraska recently enacted a bill that gives its labor agency power to subpoena records from employers suspected of violating the law.
7. Eliminate youth subminimum wages: The FLSA allows workers under age 20 to be paid as little as $4.25 per hour for their first 90 days of employment and allows employers to pay a lower minimum wage to full-time students in certain occupations, student learners, and apprentices. In recent years, some states have taken action to close these gaps so that all workers—regardless of their age—have a right to the minimum wage. All states should follow suit.

Step III: Modernize child labor standards to protect children’s health and wellbeing, safeguard their right to education, and improve their career prospects

The most effective child labor laws implement evidence-based guardrails to prevent excessive and hazardous work—as discussed above—alongside innovative policies to empower youth workers, deter violations, and provide meaningful redress and support to victims if violations occur. State lawmakers need not be bound by traditional areas of policy covered by the FLSA and can also:

1. Require workers’ rights education: If young workers do not know their rights, they will be less likely to report unsafe or illegal working conditions. States can invest in labor education to address this information gap. For example, California mandated that high schools annually teach students about workplace rights and the labor movement following a curriculum developed by the UC Berkeley Labor Center.
2. Mandate employer training on child labor laws and commitment to following the law: For example, Washington requires businesses who hire minors to obtain a special endorsement on their business license affirming compliance with child labor laws.
3. Encourage reporting by protecting whistleblowers and victims: Most labor investigations depend on worker reporting. Because young workers lack experience and knowledge about workplace rights and may fear employer retaliation, loss of wages, or immigration enforcement, many workplace abuses go unreported and uninvestigated. To address these enforcement challenges, state lawmakers should:
   1. Provide multiple avenues for child labor victims to be made whole after they report violations and risk losing their job. In most states, civil penalties for child labor violations are deposited into the state’s General Fund, and minors receive no compensation in the form of damages owed by the employer. Moreover, when a child is injured or killed on the job while employed illegally, they (or their family members in the event of the child’s death) are generally limited to the workers’ compensation system as their sole source of financial compensation. However, several states have enacted or proposed bills to make aggrieved minors eligible for additional compensation in the form of damages; for example, Colorado recently made it possible for minors who are injured while employed under illegal conditions to pursue private legal action and receive monetary damages.
   2. Enact whistleblower and anti-retaliation protections to protect workers who report labor abuses, as recently done in Minnesota.
   3. Remove provisions of state law that may discourage reporting of violations, such as those holding parents criminally responsible for allowing a child to be employed under illegal conditions, as Colorado recently did.
   4. Provide wraparound services to victims of illegal child labor to address root causes of excessive or hazardous work. For example, unaccompanied migrant youth should be provided with legal services, assistance in securing safe and age-appropriate work, and connections to community-based organizations or local government agencies that can provide additional supportive services.
4. Use innovative enforcement strategies to meaningfully hold employers accountable: Civil monetary penalties are a necessary but insufficient deterrent. State lawmakers should take a holistic approach to changing employer behavior and significantly increase the financial and reputational costs associated with breaking the law. They should:
   1. Use “hot goods” provisions and “stop work” orders to immediately disrupt the normal business of employers who are actively violating the law. “Hot goods” provisions allow courts to stop the flow of goods produced using illegal child labor and are currently in place federally. “Stop work” orders allow labor agencies to require the cessation of business until child labor violations are addressed, increasing the cost of violating the law. New Jersey permits such orders to be used when minimum wage violations are occurring.
   2. Bar violators from receiving public funding as proposed in Alabama, and implement other penalties, like revoking an employer’s permission to hire minors when they violate the law, as enacted in Washington.
   3. Create lead corporation accountability, so corporations are held jointly responsible for violations committed by their subcontractors or staffing agencies as proposed in a federal bill.
   4. Make employer violations data more accessible to the public—as recently mandated in Colorado—or publicly shame companies that violate the law by posting about violations on the state labor agency’s website—similar to New Jersey and New York.
   5. You can read more about these and other policies to address and deter violations here: Policies for states and localities to fight oppressive child labor.

Additional recommended resources 

• Child labor state legislation tracker (Economic Policy Institute) 

• Campaign to End US Child Labor 

• Child Labor Coalition at the National Consumers League 

• Federal child labor regulations under the Fair Labor Standards Act  

• State child labor laws (U.S. Department of Labor; note that this page may not reflect all recent state legislative changes) 

• How states can stop the corporate campaign to roll back child labor protections (State Innovation Exchange and Economic Policy Institute) 

Editor’s note: This piece was revised on October 24, 2025, to add an “Additional recommended resources” section. 

{{1.}} Connecticut (32 hours), Florida (30), Kentucky (30), Maine (24), Michigan (24), New Hampshire (30), New York (28), Pennsylvania (28), Washington (20). See https://www.dol.gov/agencies/whd/state/child-labor.

{{2.}} Alabama (10 p.m. to 5 a.m.), Arkansas (11 p.m. to 6 a.m.), California (10 p.m. to 5 a.m.), Connecticut (10 or 11 p.m. to 6 a.m.), Florida (11 p.m. to 6:30 p.m.), Indiana (10 p.m. to 6 a.m.), Kentucky (11 p.m. to 6 a.m.), Louisiana (11 p.m. or 12 a.m. to 5 a.m.), Maine (10:15 a.m. to 7 a.m.), Massachusetts (10 p.m. to 6 a.m.), Michigan (11:30 p.m. to 6 a.m.), Minnesota (11 p.m. to 5 a.m.), New Jersey (11 p.m. to 6 a.m.), New York (10 p.m. to 6 a.m.), North Carolina (11 p.m. to 5 a.m.), Ohio (11 p.m. to 7 a.m.), Pennsylvania (12 a.m. to 6 a.m.), Rhode Island (11:30 p.m. to 6 a.m.), Tennessee (10 p.m. to 6 a.m.), Washington (10 p.m. to 7 a.m.), and D.C. (10 p.m. to 6 a.m.). See https://www.dol.gov/agencies/whd/state/child-labor.

{{3.}} Hazardous occupation (HO) 5. Power-driven woodworking machines; HO 8. Power-driven metal-forming, punching and shearing machines; HO 10. Power-driven meat-processing machines, slaughtering and meat packing plants; HO 12. Balers, compactors, and power-driven paper-products machines; HO 14. Power-driven circular saws, band saws, guillotine shears, chain saws, reciprocating saws, wood chippers, and abrasive cutting discs; HO 16. Roofing operations and work performed on or about a roof; HO 17. Trenching and excavation operations.

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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Political and religious coercion in the workplace is a growing problem affecting workers from all backgrounds and across the political spectrum. U.S. employers have tremendous power over worker conduct under current federal laws. For example, employers can require workers to attend “captive audience” meetings—and force employees to listen to political, religious, or anti-union employer views—on work time.

In the face of this growing threat, legislators in 18 states have advanced bills to protect workers from offensive or unwanted political and religious speech unrelated to job tasks or performance. These bills are designed to prohibit employers from threatening, disciplining, firing, or retaliating against workers who refuse to attend mandatory workplace meetings focused on communicating opinions on political or religious matters.

Importantly, these state laws do not limit employers’ rights to express their beliefs freely or even to continue inviting employees to attend workplace political or religious meetings. These laws simply empower workers to opt out of unwelcome political speech by protecting them from financial harm or retaliation if they choose not to attend such meetings.

A growing number of states are taking action to protect workers’ freedom of thought and association

So far, six states have enacted laws designed to protect employees’ dignity and freedom of thought and association. Table 1 summarizes these laws, additional bills currently under consideration, as well as bills that have been previously proposed.

Table 1

Because most workers (in the absence of a collective bargaining agreement) are considered “at-will” employees who can be terminated at any time, employers often try to exercise vast authority over employees’ lives, including their political activities or freedom of association.

This power is routinely abused to coerce workers into attending political rallies, religious discussions, or anti-union meetings under the threat of disciplinary action. State legislators, however, are working to fill the void left by continued congressional inaction. State legislation that creates a minimum labor standard to protect workers from abusive forms of employer coercion can help workers more fully exercise their basic rights.

Current labor and employment laws allow bosses to bombard workers with politics and religion

Employers are increasingly using the workplace to advance their political interests, and the lack of legal protections for workers has created a situation ripe for coercion. Traditionally, employers have relied on donations, lobbying, and political action committees to advance their political interests. However, nearly universal “at-will” employment laws and recent legal rulings are emboldening employers to politically mobilize their own employees.

Pervasive “at-will” employment laws give employers the right to terminate workers without cause or for virtually any reason—including their political beliefs. And the 2010 landmark Supreme Court decision in Citizens United v. Federal Election Commission extended First Amendment protections to corporate political spending and gave employers the green light to hold political captive audience meetings. In tandem, these laws have had dire implications for workers and the democratic process.

A 2015 study revealed how widespread political communication is in U.S. workplaces. One in four U.S. workers has been contacted by their employer regarding a political matter. Of these workers, 20% (representing 5% of all U.S. workers) received messages from their boss that included one or more threats of job loss, business closure, or changes to wages and hours. Under current federal labor and employment laws, it is perfectly legal for an employer to threaten, discipline, or terminate an employee for objecting to their boss’s political views.

Political coercion affects U.S. workers of all backgrounds and across the political spectrum. Consider the following examples in which workers were pressured to vote in specific ways or forced to donate to political campaigns or lobby other voters to support legislation.

• In 2014 at a ConocoPhillips’ site in Alaska, some 200 construction workers were called into a “safety stand-down” meeting—typically held after serious workplace incidents. Rather than addressing a safety concern, a ConocoPhillips’ representative discussed the company’s stance on the upcoming August primaries, emphasizing its opposition to a ballot measure to repeal a significant tax cut for oil companies. The message to the workers was that their jobs relied on tax breaks, and voting against the repeal could harm their industry and livelihoods. One worker described the meeting as an abuse of safety protocol, while others reported fearing for their jobs.
• During the 2012 election, presidential candidate Mitt Romney spoke at an Ohio coal mine at the invitation of Murray Energy’s CEO, Robert Murray. Workers later said that mine operations were halted, and they were forced to attend the event without pay. Managerial staff also reported being pressured to donate to Murray Energy’s political action committee. Internal records later revealed that employee donations were monitored and that employees who failed to donate generously enough faced potential demotions and missed bonuses.
• In 2018, D.C. voters introduced Ballot Initiative 77 that would have raised the tipped wage from $3.33 to the regular minimum wage ($12.50 an hour at the time). Restaurant industry representatives embarked on a vigorous campaign opposing the initiative called “Save Our Tips,” warning of widespread restaurant closures and job losses. Around the city, restaurants displayed “Save Our Tips” and “NO on 77” signs. Some employers distributed weekly newsletters to employees featuring anti-Initiative 77 content and provided workers with instructions on how to vote on the initiative. Other employers held captive audience meetings during work hours to tell workers that Initiative 77 would harm them. Additionally, workers were encouraged to inform customers about the perceived negative impacts of the initiative.

While Title VII of the Civil Rights Act explicitly prohibits religious discrimination by employers, religious coercion is rampant in U.S. workplaces. For example:

• In an infamous Oregon case, a formerly incarcerated worker of Native American descent attended weekly, hour-long Bible study sessions out of fear “that he wouldn’t be able to find other work” if he declined. Following six months of weekly attendance, the worker declined to attend further sessions and was subsequently fired.
• A North Carolina-based home renovation company required employees to attend daily worship sessions that included prayer and Bible reading. A lawsuit alleged that the company owner would track attendance and reprimand employees who were absent. Additionally, when a manager asked to be excused from prayer, the owner subsequently cut his pay and then fired him.
• Employees at a Long Island, New York, firm alleged they were compelled to pray, chant, and partake in spiritual interpersonal workshops as part of a program called “Onionhead.” Workers described the workplace as “cult-like” with religious ceremonies where incense was burned to purify the workspace and lights were dimmed to deter demons. Employees and later the Equal Employment Opportunity Commission asserted that employees who resisted were disciplined or terminated.

Employers use ‘captive audience’ meetings to support union-busting

Captive audience meetings have likewise become one of employers’ preferred union-busting tactics. Workers who express interest in unionizing are routinely required by employers to hear one-sided propaganda. Workers have no right to ask questions or hear opposing viewpoints during these meetings. Analysis of National Labor Relations Board (NLRB) elections documents shows that 89% of all employers conduct captive audience meetings in response to unionization efforts. And the use of captive audience meetings caused the average union election win rate to fall from 73% to 47%.

Today, employers spend over $400 million per year on “union-avoidance” consultants, who specialize in using captive audience meetings along with a host of other tactics designed to intimidate and instill fear in workers for the purpose of union-busting. Legislation giving workers the right to opt out of captive audience meetings without fear of discipline or termination is fundamental to restoring workers’ basic right to organize without interference.

The unequal impact of coercive speech on workers

Legislation to protect workers from coercive speech is particularly important for the workers most likely to encounter discrimination at work.

Particularly vulnerable to such coercion are Black, brown, disabled, formerly incarcerated, LGBTQ, and other groups of workers who have historically faced discrimination and unequal treatment in the labor market. Structural racism and discrimination in the form of systematically higher unemployment rates, higher job search costs, lower wages, and greater tolerance for unfair treatment, put these workers in a disadvantaged position to resist employer abuses.

Further, the United States’ piecemeal approach to holding employers accountable for discrimination often puts the onus of enforcement on workers, leaves many exposed to retaliation, and excludes many of the most vulnerable workers altogether. Given the precarity of employment for non-union workers in the United States, there is a clear need for comprehensive and enforceable worker protections from coercive speech.

Conclusion: State-level solutions to coercion

State lawmakers have the power to fight back against employer coercion and address gaps in weak, outdated federal laws. States can legislate to protect workers from unwanted speech, as affirmed by the Supreme Court’s 1988 ruling Frisby v. Schultz. Many of the proposed state-level laws also have the advantage of offering quicker enforcement mechanisms than federal proceedings and include provisions for “injunctive relief” (emergency court intervention to immediately stop damaging employer behavior), restitution for lost wages, reinstatement with retained benefits and seniority, and coverage of attorney fees. As the national spotlight intensifies on growing economic inequality and decades-long erosion of workers’ rights, it is clear that state-led initiatives could play a pivotal role in shaping the future of worker rights in the U.S.

Legislators in all states should continue to build on existing momentum to protect the freedom to avoid offensive or unwanted political and religious speech at work. Lawmakers can enact enforcement mechanisms to protect workers against financial harm and retaliation if they opt out of such speech. This legislation will help safeguard democracy by protecting citizens from undue influence over their political views, donations, or votes; guaranteeing workers’ freedoms; and ensuring all workers can fully exercise their rights in the workplace.

Many states across the Southern United States{{1}} employ an economic model that prioritizes business interests and the wealthy over ordinary citizens. This model—which we refer to in this report as the “Southern economic development model”—is characterized by low wages, low taxes, few regulations on businesses, few labor protections, a weak safety net, and vicious opposition to unions. The model is marketed as the way to attract businesses into Southern states, with the implicit promise that this will lead to an abundance of jobs and shared economic prosperity for all Southerners.

The reality is 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. Today the cheap labor sought is increasingly diverse, yet it is still overwhelmingly made up of Black and brown workers across the region.

In this report, we use empirical data to show that the Southern economic development model has failed to provide economic security for workers and families across the South. In fact, the South lags other regions of the country on most indicators of economic health.{{2}} We also show—through historical context and case examples—how the Southern economic development model continues to serve as a means of maintaining racial hierarchies across the South.{{3}}

What characterizes the Southern economic development model?

To maintain the disproportionate levels of wealth and power enjoyed by many Southern politicians, corporate interests, and many wealthy and powerful people across the nation, businesses in the South have relied on access to large pools of cheap labor.

Businesses in the South have particularly depended on the labor of Black and brown Southerners. These laborers are used in cotton and tobacco fields, to produce the food we eat, to care for our children and the elderly, to build the nation’s infrastructure, and to perform many other jobs for little or no compensation.

Enslaved Africans were not paid at all. After the end of slavery, many Black workers, such as the Pullman porters, were forced to rely on tips. Today, while slavery is illegal in most cases, incarcerated workers can be—and often are—required to work without pay (ACLU and GHRC 2022). Below, we discuss other ways worker’s wages are kept low or kept from them entirely.

The racist roots of this model have been obscured and have been replaced by 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.

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, more than half of states have minimum wages higher than $7.25 (EPI 2023).

Because many Southern states have weak, if any, labor enforcement, wage theft is common across the South. That means some workers are not even paid these too-low minimum wages. This is especially true in industries like 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 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.{{4}} Employers who commit wage theft are rarely punished (Cooper and Kroeger 2017). In Florida, for example, there isn’t a state department of labor to enforce wage standards; employers therefore have no reason to fear being caught or punished. In Alabama, Delaware, Georgia, Louisiana, Mississippi, and South Carolina—which technically do have departments of labor (DOLs)—the DOLs do not in practice make any effort to recover wages that are stolen by employers (Mangundayao et al. 2021).

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.{{5}}

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 the FLSA’s 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). As noted above, the practice of using tips to compensate service workers in the United States began in the 19th century after the end of slavery. This practice allowed businesses to hire the formerly enslaved without actually having to pay them (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. As noted above, 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, historically has 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). But 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 ensuring that businesses aren’t “hampered” by regulation. This includes minimal regulation of business activities that pollute the air, water, and soil. It also means lack of regulation or enforcement around labor laws such as federal minimum wage laws, overtime laws, or safety standards for workers (Cooper and Kroeger 2017; Fleischman and Franklin 2017; Florida Policy Institute 2022; Terrell and St. Julien 2023; Waldman 2017).

Issues resulting from weak regulatory standards can be particularly widespread in Black and brown communities (Donaghy et al. 2023). Terrell and St. Julien (2023), for example, found that, due to a lax state permitting process, these communities across Louisiana had a seven to 21 times greater exposure to air pollutants, especially those from chemical manufacturers, compared with white communities. Black and brown communities experience similar disproportionate impacts from coal ash, which contains toxic metals that pollute the air and water in North Carolina and other states (Bienkowski 2016; SELC 2019).

Low income and corporate taxes

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

The roots of the South’s tax structure

To understand attitudes toward taxes across the South, it is important to understand the roots of the current stance on taxes in the Southern economic development model. Before the Civil War, taxes on enslaved people—considered the private property of slaveholders—were paid primarily by wealthy plantation owners and constituted a significant source of revenue for states across the South (Williamson 2021).

After slavery was abolished, plantation owners represented themselves as “concerned taxpayers” who opposed 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 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 2022a).

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, income tax rates fail to raise adequate revenue, requiring those states 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, for example, more than 40% of all state and local tax revenue came from sales taxes 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).{{6}}

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. In reality, 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 2023b, 2023c).

A weak safety net

The Southern economic development model is further characterized by a weak social safety net. Unemployment insurance (UI), for example, 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, it also helps stabilize the broader economy (Bivens et al. 2021).

Southerners face greater insecurity when they lose their jobs

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 level and duration of those benefits, and how the system is financed (Bivens et al. 2021).

The fact that the states where most Black Americans live have the least accessible UI systems with the least generous 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).

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 and have large Black populations (The Century Foundation 2023).

Southerners face barriers to health care access

The South is also the least likely of any region to ensure its constituents have access to health care. This is particularly concerning given high rates of illness and comorbidities across the South (Akinyemiju et al. 2016).

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, and seven of these—Mississippi, Alabama, Georgia, South Carolina, Florida, Tennessee, and Texas—are in the South (KFF 2023).{{7}}

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).{{8}} In 1996 the Personal Responsibility and Work Opportunity Act (PRWORA) replaced AFDC with the Temporary Assistance for 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 benefit limits and requires that states increase their work participation rates for TANF recipients (DHHS n.d.).

While the federal government funds TANF, states determine benefit levels and income and resource limits, and they administer or oversee administration of the program. States 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 for this purpose, but by 2020 this share had fallen to just 22% nationally (Azevedo-McCaffrey and Safawi 2022).

There are large variations in spending by state. In 2021, 15 states spent 10% or less of TANF dollars to provide cash assistance to families. Seven of these states—Alabama, Arkansas, Delaware, Louisiana, Mississippi, North Carolina, and Texas—are in the South and have large Black and Hispanic populations. Of the remaining states spending 10% or less of funds in direct assistance, six were in the Midwest and two were in the Northeast.{{9}} Across the South, only the District of Columbia and Kentucky spent 30% or more of their TANF funds for direct assistance (Azevedo-McCaffrey and Safawi 2022).

Benefit levels are also low 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. Only four Southern jurisdictions—the District of Columbia ($665), Maryland ($727), Virginia ($587), and West Virginia ($542)—have a benefit amount greater than $500 for a three-person family (Thompson, Azevedo-McCaffrey, and Carr 2023).

In 16 states, the nominal TANF benefit in 2022 is the same as or lower than it was in 1996. Seven of these states—Arkansas, Delaware, Florida, Georgia, Kentucky, North Carolina, and Oklahoma—are in the South. The failure to raise the nominal benefit means that in these states, the inflation-adjusted value of the benefit 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 reflects efforts of politicians to control the behavior and reproduction of Black women and compel their labor into the low-wage labor market (Floyd et al. 2021; CBPP 2022).{{11}} Historically, states like Alabama and Louisiana have used “deservingness,” “suitable homes,” and “man in the house” rules to exclude Black families from the program. States began to pass these morals-based eligibility rules in the 1940s as the ADC rolls began to become more diverse (Floyd et al. 2021; Gordon and Batlan 2011; O’Connor 1969).

To be “deserving,” a mother needed to be widowed, have a husband that was unable to provide for the family’s needs 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 to be living 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. In either case, it did not matter whether the man involved was the children’s father or not (Floyd et al. 2021; O’Connor 1969).{{12}}

Today, those states with larger Black populations—primarily Southern states where the majority of the Black population lives—tend to have more stringent requirements to access TANF benefits, and those benefits tend to be more meager (Shrivastava and Thompson 2022).

Anti-union policies

Finally, and perhaps most importantly, 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 2021; Mishel 2021; Mishel, Rhinehart, and Windham 2020). Despite this, states across the South have adopted policies that hamstring workers’ ability to form unions because they pose a threat to the Southern economic development model.

First, unions threaten the Southern economic development model because they have historically been the primary counterweight against businesses seeking to keep wages and benefits low. Second, the labor movement in the U.S. today is one of the foremost institutions promoting cross-racial solidarity. Third, unions are a key driver of greater equity in the workplace (Bivens et al. 2023).

Labor unions have not always fulfilled the roles of cross-racial solidarity or racial equity in the workplace—many unions have a history of anti-Black racism. Throughout the 20th century, businesses would pit Black and white workers against one another, including by using Black workers as strikebreakers (Arnesen 2003).

Many white workers viewed Black workers as competition. This—coupled with the belief that Black workers were inferior to them—led them to oppose including Black workers in their unions. Unions such as the American Federation of Labor and many trade unions would not organize Black workers (Hill 1959). In response, Black workers began forming their own unions. A. Philip Randolph, for example, organized Black porters in the Brotherhood of Sleeping Car Porters (AFL-CIO 2014; Tye 2005).

Not all unions were opposed to organizing workers across race, though. Some, like the Congress of Industrial Organizations, realized that as long as workers were divided, their power would continue to be undermined. As noted above, when Black workers or any other group of workers are systematically excluded from joining a union, they can then be used as strikebreakers. This makes it less likely that a strike will be effective and less likely that workers’ demands will be met.

Despite the negative experiences many Black workers had with discriminatory unions, many civil rights leaders were also labor leaders who wanted to bring workers together to demand economic justice and equality for all workers. The organizers of the 1963 March on Washington for Jobs and Freedom, which everyone remembers for Dr. Martin Luther King Jr.’s “I Have a Dream” speech, included A. Philip Randolph. Randolph had not only led the Brotherhood of Sleeping Car Porters but had also demanded racial integration of the military and called for a march on Washington in the 1940s to force President Roosevelt to issue an executive order banning discrimination in war industries (AFL-CIO n.d.).

Figure A. Racist flyer used to drive opposition to the Congress of Industrial Organizations (CIO) in the 1940s. (Photo by David Haberstich. Courtesy of Donald McKee, cited in Griffith 1988.)

In pushing back against interracial labor organizing, wealthy and powerful Southerners would invoke white supremacy to thwart these efforts for collective economic justice. During a campaign to get a so-called right-to-work (RTW) law on the books in Arkansas, advocates made clear that RTW was critical to maintaining racial segregation. (RTW laws require unions to represent all workers but restrict their ability to collect dues, thereby weakening the unions.) To advance their cause, they drew on the racial animus of white Southerners with the warning that

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)

In another instance, those trying to mobilize racial prejudice in the 1940s against the Congress of Industrial Organizations (CIO)—which supported interracial organizing—produced the flyer shown in Figure A. The flyer shows a photo of George Benjamin, a Black man, with a caption noting that Benjamin had been put in charge of organizing the tobacco workers. In all capital letters it states, “INCLUDING THE WHITE EMPLOYEES.” Ironically, the Tobacco Workers International Union under attack was in fact an American Federation of Labor (AFL) affiliate and was not as supportive of interracial organizing as the CIO (Griffith 1988).

In many Southern states, the campaigns to get RTW laws passed were successful (NCSL 2023). In the 1940s, Florida and Arkansas were the first two states to adopt these anti-worker laws. It is important to emphasize that—contrary to the “right to work” moniker—these laws in no way guarantee workers a right to a job or a right to work; instead, they simply make it more difficult for workers to form and maintain unions.{{13}}

Across the South, states have continued to adopt RTW laws, with some legislatures enshrining them in their state constitutions (Ballotpedia 2022). One result is that Southern states have some of the lowest rates of union coverage in the country. While nationally union coverage rates stand at 11.3%, rates were as low as 1.9% in South Carolina, 3.9% in North Carolina, and 5.4% in Georgia in 2022 (BLS 2023).{{14}}

The Southern economic development model: A summary

Collectively, these economic policy positions form what we refer to as the Southern economic development model. Most states across the South census region—with the exception of Maryland, Delaware, and the District of Columbia{{15}}—adhere to most, if not all, of these components and have adopted a wide range of policies consistent with this model. Some Southern states—such as Alabama, Mississippi, Louisiana, Arkansas, South Carolina, Kentucky, and West Virginia—adhere to this model particularly closely.

Future reports from EPI will delve deeper into the Southern economic development model and how it manifests in specific states across the region.

Throughout the rest of this report, we examine several key indicators of economic well-being for workers and families across the South. We compare the South with other regions and look at variations across states within the South. The data show that those states that adhere most closely to the Southern economic development model fare worse in general than those states that have taken a different path.

The Southern economic development model has failed to promote the economic well-being of workers and families across the South

On the surface, the Southern economic development model may seem purely like a set of economic policy choices. However, as we describe above, it in fact emerged out of efforts in the late 1800s and beyond to maintain racial hierarchies across the South—hierarchies that would ensure continued access to the cheap labor of the newly freed Black population (Harris 1993; Perea 2011).

Below, we use empirical data to refute proponents’ argument that this model creates jobs and overall prosperity. We show that it actually produces worse outcomes for workers and families across the South.

Southern states are well represented among the lowest-GDP states

If the Southern economic development model led to better economic performance, one likely place that would show up would be in measures of state GDP. The gross domestic product, or GDP, is the total value of goods and services produced in an economy. It is a comprehensive measure that represents overall spending by government, the output of businesses and their workers, investments made by actors in the economy, and the trade conducted with economic actors in other jurisdictions. It is an important measure of overall economic trends; a rising per-worker GDP is necessary (although insufficient on its own) to achieve rising living standards for the broad population.

The data indicate that on this overall measure of economic growth, the South does not perform particularly well. Figure B lists the 15 states with the lowest per-worker GDP in 2019 before the COVID-19 recession. Nine of these states are in the South. Mississippi has the lowest per-worker GDP in the nation. The other eight Southern states on the list are Arkansas, Alabama, Kentucky, South Carolina, Florida, Oklahoma, West Virginia, and Tennessee.

Figure B

Of the remaining states in the South census region (not shown in Figure B), the majority have per-worker GDPs below the U.S. average. Only Maryland, Delaware, and the District of Columbia have per-worker GDPs above the national average. As noted above, these three jurisdictions adhere less closely to the Southern economic development model than other Southern states.

Job growth across the South largely reflects population growth, not economic growth

The health of an economy is also frequently assessed by looking at job growth. As demand for goods and services grows among the general population, workers are hired to provide those goods and services. When demand is weak or constrained, workers are not hired and some may lose their jobs, further dampening GDP and weakening the growth that can improve living standards.

Many Southern politicians have argued that the policies associated with the Southern economic development model produce greater job growth and that this exceptional job growth creates a “rising tide that lifts all boats.” They point to the strong job growth across the South that has occurred since the late 1970s—i.e., the larger increase in the total number of jobs in the South compared with other regions of the country. When we examine the data, however, we find that job growth across the South largely reflects a growing Southern population.

Various factors largely unrelated to the South’s economic development strategy (e.g., the widespread adoption of air conditioning, proximity to the Southern U.S. border, and increased domestic and international migration) have driven strong population growth in the South (Arsenault 1984; Frey 2023). Yet job growth across the region has lagged population growth since the early 2000s.

Figure C shows that between 1976 and 2001, job growth in the South generally moved in tandem with population growth but never exceeded growth in the working-age population. Since 2001, job growth has failed to keep up with population growth, especially after the Great Recession of 2008–2009. This is in contrast to the Northeast and Midwest regions, where job growth has exceeded population growth for the majority of the more-than-four-decade period.

Figure C

Southern states are well represented among the states with the lowest prime-age employment-to-population (EPOP) ratios

Arguably the best way to assess labor market health is to evaluate whether job growth is providing adequate employment for everyone in their prime working years. We can measure this by looking at the prime-age employment-to-population (EPOP) ratio, which is the share of workers ages 25 to 54 with a job. If the Southern model provided exceptionally strong job growth, we would expect Southern states to have relatively high EPOPs.

Figure D shows the 10 states with the lowest prime-age EPOP. Of the 10 states with the lowest EPOP nationally, seven are Southern states. The five states with the lowest EPOPs—Louisiana, Alabama, New Mexico, Mississippi, and West Virginia—have more than a fourth of their prime-age population out of the workforce; four of these are in the South.

Figure D

Of the remaining states in the South census region (not shown in Figure D), the majority have prime-age EPOPs below the U.S. average. Only Maryland, Virginia, Delaware, and the District of Columbia have prime-age EPOPs above the national average. As noted above, Maryland, Delaware, and D.C. adhere less closely to the Southern economic development model than other Southern states.

Many of the workers missing from the EPOPs are not in the labor force at all—they are not employed and they are not looking for work. While there are a variety of reasons why prime-age workers would leave the labor market, one of the most common reasons is they have become discouraged. They have been unable to find suitable work or they face obstacles—such as the need for child care or transportation—that prevent them from seeking or keeping employment.

Workers in Southern states tend to have lower earnings even after adjusting for regional differences in the cost of living

Table 1 shows the nominal median annual earnings and median annual earnings adjusted for regional differences in the cost of living for all 50 states and the District of Columbia. States are ranked from highest to lowest cost-of-living-adjusted earnings. States in the South census region are marked with an asterisk.

Three Southern states—Maryland, Virginia, Delaware—and the District of Columbia are among the top 20 highest-earning states. As noted previously, three of these jurisdictions—Maryland, Delaware, and D.C.—do not adhere to the Southern economic development model as closely as the nine Southern states that fall into the 20 lowest-earning states. Three states that adhere particularly closely to this model—Florida, South Carolina, and Mississippi—fall into the 10 lowest-earning states.

Table 1

Wages are even lower for some groups in the South. Table 2 highlights dramatic differences in earnings across the region by gender and race/ethnicity. The state-level median earnings listed in Table 1 may not be representative of the typical earnings of Black and Hispanic workers in those states, especially Black and Hispanic women, who are generally paid even less than their male counterparts. On average, Black women in the South are paid $35,884 at the median and Hispanic women just $30,984, compared with $58,008 for white men.

Table 2

Poverty rates in most Southern states are higher than the national rate

Arguably the best-known measure of economic well-being is the official poverty rate. According to the official poverty measure, a family of four with two minor children in 2019 would fall below the poverty line if their family income was less than $26,000. Figure E shows official poverty rates for each state in the South and for the nation as a whole in 2019. The data provide a clear indicator that the Southern economic development model is leaving large numbers of Southerners in dire economic conditions.

Figure E

The poverty rate nationally, at 12.3%, is much higher than it should be in a nation as wealthy as the United States. However, the poverty rate is significantly higher in many states across the South. Almost 1 in 5 residents in Mississippi and Louisiana fall below the poverty line. Only three states in the South have a poverty rate below the national rate: Delaware, Virginia, and Maryland. As noted above, Maryland and Delaware do not adhere as closely to the Southern economic development model as other states in the South census region.

While overall poverty rates across the South are appalling, when we consider differences by race and ethnicity they become even more so. Black women across the South have a poverty rate of 20.0% and Hispanic women are at 18.5% (see Figure F).

Figure F

These extremely high rates of poverty—roughly 1 in 5 women—are not due to unwillingness to work. Black women in fact have a higher prime-age employment-to-population ratio than women from any other racial or ethnic group in the South.{{16}}

Table 3 shows that Black women in the South have a higher poverty rate than Black women in the Northeast (19.0%) or the West (19.2%), although Black women’s poverty rates are highest in the Midwest (23.4%). Black men’s poverty rates across the South (15.7%) are higher than in the West (15.5%) but lower than in the Northeast (16.0%) and the Midwest (20.1%). Extreme disparities by race/ethnicity and gender in the U.S. are not limited by geographic boundaries.

Table 3

Hispanic men and women have the highest poverty rates in the Northeast (13.9% and 20.6%, respectively), followed by the South (12.4% and 18.5%). Their lowest poverty rates are in the West (11.3% and 15.7%) and the Midwest (11.6% and 16.9%).

Asian American and Pacific Islander (AAPI) men and women living in the South actually have lower poverty rates than AAPI men and women in other regions. In the South, their poverty rates are 8.7% and 9.6%, respectively. These are lower than in the West (8.9% and 9.8%), the Northeast (10.4% and 11.4%), or the Midwest (11.0% and 11.2%). Lower rates of poverty among AAPI men and women in the South likely reflect the fact that they tend to live in higher-earning Southern states such as Maryland (Childers 2023c).

Finally, white men and women across the South have much lower poverty rates than Black and Hispanic Southerners but have higher poverty rates than white men and women in any other region. In the South, white men and women have poverty rates of 8.2% and 10.8%, respectively, while in the Midwest their poverty rates are 7.5% and 10.1% and, in the West, 7.8% and 9.5%. Their poverty rates are lowest in the Northeast, at 6.7% and 8.6%.

One reason Black women’s poverty rates remain high in the South—despite a relatively high EPOP—is that they are disproportionately employed in jobs consistent with the occupations they were largely limited to during and after the end of slavery: care work, cleaning, and food production, including agricultural and animal slaughter work. Because this work is largely done by Black, brown, and immigrant workers, consistent with the Southern economic development model, these jobs pay very low wages.

While Black and Hispanic men are paid more than Black and Hispanic women in the South, their earnings are lower than white men’s earnings. This means that among two-adult households, Black and Hispanic households are more likely to rely on Black and Hispanic women’s earnings to meet household needs than white households do. Black women in particular are frequently co-breadwinners in their households (Banks 2019; Glynn 2019).

Child poverty is higher in the South than in any other region

Low wages across the South also mean that many children will suffer economic hardships. Their parents’ earnings determine to a great degree the resources available to them, especially when public safety nets are as limited as they are across most of the South. Figure G shows the geographic distribution of all U.S. children living in households where the household head is paid less than $10.00 per hour. More than half of these children, 53.4%, live in Southern states.

Figure G

The large number of Southern children in households where the head of household is paid less than $10.00 per hour, and high rates of poverty overall, mean that many children across the South live in poverty. Figure H shows that child poverty is significantly higher in the South than in other regions. At 20.9%, child poverty rates in the South are 3.7 percentage points higher than the region with the next-highest child poverty rate, the Midwest at 17.2%. While child poverty across the South is clearly worse than in other regions, it is troubling that the lowest regional rate nationwide is as high as 16.6%, in the Northeast.

Figure H

The high overall child poverty rates obscure extreme racial inequities in child poverty. As seen in Figure I, across Southern states, Asian American children have the lowest poverty rates, at 9.9%, followed by 12.5% of non-Hispanic white children. The next-highest rate is more than double that; 26.3% of American Indian and Alaska Native children, 28.1% of Hispanic children, and 33.0% of Black children live in poverty across the South.

Figure I

High levels of income inequality are seen in every state across the South

In this final section, we consider how the Southern economic development model has performed in addressing income inequality. Figure J shows the share of all household income that goes to the top 5%, the top 20%, and the bottom 20% of households in each Southern state and across the U.S.

Figure J

In every Southern state, more than 20% of all household income goes to just the richest 5% of households. In most Southern states, more than 50.0% of all household income goes to the richest 20%. The bottom 80% of households share the remaining 50%, with the bottom 20% sharing between 2.0% and 3.5% of all household income. Further, the share to the top 5% has increased over the last decade and the share to the bottom 20% has declined (not shown in Figure J).{{17}}

It is important to note here that this is the one indicator on which the South does not differ from the rest of the nation. Though the South has not performed worse than the rest of the country on this particular measure, it also has not performed any better. Indeed, this pattern of inequality holds for every state in the nation.

Conclusion

Efforts to instigate racial division today may not be as overt as the flyers featuring George Benjamin, but we know that racial dog whistles are still at play across the South. When states gerrymander maps to dilute the voting strength of Black and brown residents or engage in voter suppression, or when wages are kept low in jobs held primarily by Black, brown, and immigrant workers, this is all done in the service of maintaining a racial hierarchy across the South.

Many Southerners may believe their politician’s arguments that the Southern economic development model will deliver good, well-paying jobs. However, the data presented here show clearly and emphatically that this model has failed those living in Southern states. This economic model has garnered vast amounts of riches for the wealthiest and most powerful people across the region but is leaving most Southerners with low wages, underfunded public services, a weak safety net in times of economic downturns, deep racial divisions, and high rates of poverty.

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

Notes

{{1.}} In this report we follow the definition of the South used by the U.S. Census Bureau, which includes Alabama, Arkansas, Delaware, the District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

{{2.}} Census-defined regions outside the South include the Midwest, the Northeast, and the West. The Midwest includes Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin. The Northeast includes Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont. The West includes Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

{{3.}} States in other regions may draw on some components of the Southern economic development model, for example, lowering tax rates or implementing so-called right-to-work laws. States across the South, however, are much more likely to consistently implement all or almost all components of the model and to implement them to a greater degree.

{{4.}} See Cooper and Kroeger 2017 for descriptions of other forms of wage theft.

{{5.}} Texas v. Biden (S.D. Tx. 2022).

{{6.}} 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.

{{7.}} North Carolina has adopted the expansion, 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 2019 and 2021, respectively (KFF 2023).

{{8.}} ADC was changed to AFDC in 1962.

{{9.}} The Midwest states spending 10% or less are North Dakota, Michigan, Illinois, Indiana, Missouri, and Kansas. The Northeastern states are Connecticut and New Jersey. See this map (Azevedo-McCaffrey and Safawi, Figure 2).

{{10.}} For a graphic representation of change in the real value of TANF benefits, see this chart (Thompson, Azevedo-McCaffrey, and Carr 2023, Figure 2).

{{11.}} See also King v. Smith, 392 U.S. 309 (1968).

{{12.}} See also King v. Smith, 392 U.S. 309 (1968).

{{13.}} For more information on RTW, see Sherer and Gould 2023.

{{14.}} See BLS 2023 for union membership and union coverage rates for all states.

{{15.}} For simplicity, we refer to the District of Columbia as a state in this report.

{{16.}} EPI analysis of the 2017–2021 Current Population Survey Basic data. Data on the prime-age EPOP by race/ethnicity and gender in the South will be examined in more detail in a forthcoming report (Childers 2023a).

{{17.}} EPI analysis of American Community Survey Table B19082, “Shares of Income by Quintile,” from the U.S. Census Bureau. Analysis of income distribution in the Southern states over time will be discussed in a forthcoming report (Childers 2023b).

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