The Southern Economy: Cause or Effect?

If you haven’t read Harold Meyerson’s remarkable article at the Prospect about the southern economic model going national and spearheading a “race to the bottom” that’s part of a new global competition for low-wage jobs–well, make a note to read it this weekend if not earlier.

Here’s a very quick distillation:

There’s nothing new about Northern manufacturers moving south to lower their labor costs. Textile factories, which had been located chiefly in New England, began to pop up in the South as early as the 1880s. In 1922, the average hourly wage in Massachusetts mills was 41 cents while in Alabama, it was 21 cents. Over the next six years, 40 percent of the Massachusetts factories shuttered their gates, and by the mid-1960s, the Southern textile industry was out-producing its Northern counterpart by a 24-to-1 margin.

But the shift of higher-value manufacturing to the South since the 1960s, once the South was air-conditioned and its Jim Crow laws nullified, has had a more profound effect on the American economy. Workers at the unionized auto, steel, aerospace, and other durable-goods factories in the Northern and Western states during the three decades following World War II attained a standard of living and of employment stability all but unknown to earlier generations of workers. Since the 1970s, however, that standard—and with it, the American middle class—has been eroded by the emergence of lower-wage competition from both the Global South and the domestic South.

Racism is inevitably part of the political and economic dynamics Meyerson’s talking about, but more purely economic factors are as well, including the erosion of the once-huge gap between China’s labor costs and those in the poorest of southern U.S. states.

Read the whole thing. I’d add just one observation. It’s all too easy to look at the “southernization” of U.S. politics and economic policy and just attribute the whole thing to some atavistic fundamental trait of southern culture or religion that’s somehow infecting an otherwise virtuous nation. Truth is, as Harold abundantly documents, the economy of exploitation in the South has always been heavily influenced by the region’s dependence on “foreign” (Yankee or international) capital. The most enduring feature of southern political economy after the Civil War other than racism itself has been the servile attitude of local elites towards “investors” and “job creators” (thrown off briefly by the Populists, and then much more recently, by a few Democratic governors, notably including Bill Clinton, before the ancient habits of “smokestack chasers” have reemerged with a vengeance in the new one-party Republican South) from outside the region.

At some point it will make more sense to look at the phenomena Harold is describing as the emergence of national conservative economic ideology that first took hold in the South rather than as some kind of “southern coup.” Truth is, national GOP economic policy has been pretty much focused on the same business-costs-uber-alles obsession for a long time now.

Is Scott Walker trying to turn Wisconsin into South Carolina (a proposition I examined some time ago at TNR)? Or are both Walker and Nikki Haley just comrades-in-arms in the Army of the Golden Calf? I’d say the latter is more accurate, but then again, I may just be a defensive cracker.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.