Southern Policymakers Have Left Workers With Lower wages and Job Quality

For at least the last 40 years, pay and job quality for workers across the South has been inferior compared with other regions, according to a new Economic Policy Institute report.

These are deliberate outcomes of the Southern economic development model, which is characterized by low wages, limited regulations on businesses, a regressive tax system, subsidies that funnel tax dollars to the wealthy and corporations, a weak safety net, and staunchly anti-union policies and practices.

Specifically, the report finds:

• Southern states have consistently had lower median wages than other regions over the past 40 years. In 2021, the median hourly wage was $20.03 in the South, 9.3% lower than wages in the West and 15.9% lower than wages in the Northeast.

• The share of workers in the South who are paid less than $15 per hour—22% in 2021—is substantially higher than that of any other region (16.6% in the Midwest, 11.5% in the Northeast, and 9.7% in the West).

• Proponents of the Southern model argue that a lower cost of living in the South means that lower nominal wages still afford a higher quality of life. But adjusting wages for differences in the cost of living still leaves workers across the South with lower earnings.

• Workers across the South are the least likely to receive employer-provided health insurance or a pension compared with workers in other regions. They are also the least likely to have paid sick leave.
• The South has by far the lowest rates of union coverage; the states with the lowest rates in 2023 were South Carolina (3%), North Carolina (3.3%), and Louisiana (5.1%)—compared with 11.2% nationally.

The report is the latest in a series, “Rooted in racism and economic exploitation,” that takes a deep dive into the failed Southern economic development model. Previous reports have illustrated the South’s economic underperformance and the development of the Southern economic development strategy.

“The Southern economic development model does not—and cannot—lift all Southerners to economic security or prosperity. Southerners from all backgrounds—across race, ethnicity, gender, immigrant statuses, and income levels—must come together to demand a new economic model that centers and empowers workers and families,” said report author Chandra Childers, who is a senior policy and economic analyst for EPI’s Economic Analysis and Research Network.