The South's small-government, pro-business, boot-strap ideals are drawing jobs to states in the region. That economic model may hold appeal for Wisconsin's Scott Walker and other Northern GOP governors. But it also has a dark side.
If Gov. Scott Walker (R) has his way in the labor dispute that has rocked Wisconsin for two weeks, will his state in effect look a lot more like those in the South?
Their economies marked by weak unions, a business-friendly climate, a thin social safety net, and lower taxes, Southern states may be an inspiration to some Northern politicians looking to grow jobs and dig out of budgetary holes.
Governors around the United States are "really under tremendous pressure ... to transform their economies," said Bruce Katz, director of metropolitan policy at the Brookings Institution, at a recent symposium. Collectively, states' deficits for the next fiscal year add up to $125 billion, forcing at least 41 states to propose cuts in education. Help from the federal government is probably not on the way, either, with Congress having no appetite for another stimulus bill or a bailout.
That leaves financially strapped states looking around for other solutions, and their gaze may be fastening on what some economists call the South's "moonlight and magnolias" strategy. Under that economic construct, the focus is on creating a competitive place to locate businesses, so the premium is on investments in benefits for corporations and on keeping wages relatively low. Worker rights, social services, even education take a back seat to "job creators" under this model – which critics denounce as a race to the bottom.
"Members of the modern Republican Party, and the 'Tea Party movement' in particular, gravitate naturally toward models of growth that treat public programs and investments as mere obstacles in the path of dynamic corporate 'job creators,' '' writes Ed Kilgore, a fellow at the Progressive Policy Institute, in The New Republic this week. "Many look South in admiration." But "if Wisconsin and other states – not to mention the country as a whole – end up adopting these atavistic economic ideals," warns Mr. Kilgore, "they will simply begin to resemble the dysfunctional Old South societies that spawned them in the first place."
Others note, though, that people are voting with their feet. Northerners – including African-Americans – have decamped in a massive migration to the South during the past two decades, evidently perceiving that's where the jobs are going.
"When you talk about folks in New Jersey, Ohio, and Wisconsin, there's not a lot of optimism about the future right now," says David Woodard, a political scientist at Clemson University, in South Carolina. "They're not as optimistic as someone living in Atlanta."
Of the top 10 states with the smallest share of public employees eligible for collective bargaining, nine are in the South. In Wisconsin, Governor Walker is trying to curtail unions' collective bargaining rights; other states seek steep concessions in pay and benefits from public employee unions to close budget gaps and make their states more competitive.
The top 10 entrepreneurial states, moreover, are all in the South and the West – and all in so-called right-to-work states that ban closed union shops, according to the Kaufmann Index of Entrepreneurial Activity.
For many Southerners, the strategy is hardly a race to the bottom. Blacks on average now make more money in the South than they do in the North. Professor Woodard relates the story of a former South Carolina landscaper who used to drive a beat-up Chevy pickup truck but now works at the nonunion BMW plant in Greenville, S.C. He drives a new BMW, and "you couldn't convince him that he's worse off," says Woodard.
Wisconsin's Walker has said that stronger taxpayer representation in state governments will pave the way for economic recovery – and eventually more opportunity for all. But getting there means breaking a social compact that has been in place since the 1950s and that was strengthened in the 1990s boom years, when many public employee unions secured generous health and pension benefits in exchange for slightly lower pay scales.
Mississippi Gov. Haley Barbour (R), who has without much opposition cut pay and benefits for state workers in order to offer incentive packages for corporations, supports Walker's moves in Wisconsin. (A new Toyota plant is opening in Mississippi this year.)
"When they have collective bargaining in Wisconsin, on one side of the table there's state employee unions or the local employee unions. On the other side of the table are politicians that they paid for the election of those politicians," the potential presidential aspirant tells the Washington Post. "Now, who represents the taxpayers in that negotiation? Well, actually, nobody."
There is a darker side to the Southern model. Former slave states and territories have greater income disparities, receive more in federal subsidies than the tax dollars they send to Washington, and lag behind in educational achievement, especially for the poorest residents. Critics say that's what happens when economic policies put the "job creators" ahead of consumers of state services and benefits, including education.
Southern states receive more than their fair share of federal dollars per resident largely because they get a lot of farm and military subsidies, have fewer high-wage earners, and in effect outsource much of their indigent care to Washington. Obviously, the federal government could not long afford a situation in which a greater number of states get more federal dollars than they give. The US would need to cut entitlements and social programs much more than lawmakers in Congress – including GOP conservatives – are currently contemplating.
"Texas, for example, has a huge debt problem, and it's a state with no social safety net to begin with and they're now planning to cut services for the needy more deeply," says Norm Ornstein, a fellow with the nonpartisan American Enterprise Institute in Washington. "The great irony here is that people who are now most agitated about deficits and debt are the ones who not only want to keep $4 trillion in tax cuts, but want to have even more tax cuts."
That core idea – that tax-cut opportunity trumps tax-paid benefits – is built into the South's Jeffersonian society, which backs limits on federal power and promotes the state's role in safeguarding individual property and rights. It comes at a price. "By design, life is tougher in the South," concedes Clemson's Woodard.
June 2024 May 2024 April 2024 March 2024 February 2024 January 2024 December 2023 November 2023 October 2023 September 2023 August 2023 July 2023 June 2023 May 2023 April 2023 March 2023 February 2023 January 2023 December 2022 November 2022 October 2022 September 2022 August 2022 July 2022 June 2022 May 2022 April 2022 March 2022 February 2022 January 2022 December 2021 November 2021 October 2021 September 2021 August 2021 July 2021 June 2021 May 2021 April 2021 March 2021 February 2021 January 2021 December 2020 November 2020 October 2020 September 2020 August 2020 July 2020 June 2020 May 2020 April 2020 March 2020 February 2020 January 2020 December 2019 November 2019 October 2019 September 2019 August 2019 July 2019 June 2019 May 2019 April 2019 March 2019 February 2019 January 2019 December 2018 November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 September 2016 August 2016 July 2016 June 2016 May 2016 April 2016 March 2016 February 2016 January 2016 December 2015 November 2015 October 2015 September 2015 August 2015 July 2015 June 2015 May 2015 April 2015 March 2015 February 2015 January 2015 December 2014 November 2014 October 2014 September 2014 August 2014 July 2014 June 2014 May 2014 April 2014 March 2014 February 2014 January 2014 December 2013 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 May 2013 April 2013 March 2013 February 2013 January 2013 December 2012 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011 October 2011 September 2011 August 2011 July 2011 June 2011 May 2011 April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 October 2010 September 2010 August 2010 July 2010 June 2010 May 2010 April 2010 March 2010 February 2010 January 2010 December 2009 November 2009 October 2009 September 2009 August 2009 July 2009 June 2009 May 2009 April 2009 March 2009 February 2009 January 2009 December 2008