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SOUTHERN POLICYMAKERS LEAVE WORKERS WITH LOWER WAGES AND A FRAYING
SAFETY NET  
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Chandra Childers
July 18, 2024
Economic Policy Institute
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_ For at least the last 40 years, pay and job quality for workers
across the South has been inferior compared to other regions—thanks
to the racist and anti-worker Southern economic development model. _

, Economic Policy Institute

 

To provide economic security and stability for workers and families, a
good job must pay a living wage and provide workers with health
insurance, a pension, and the flexibility they need to balance work
and family demands. In this report, we show that workers across the
South are much less likely than their counterparts in other regions to
have access to these kinds of jobs. The data suggest that a key reason
for the disadvantages Southern workers face is the Southern economic
development model prevailing across the region. The Southern economic
development model 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 (Childers 2024a).

Proponents of the Southern economic development model argue that it
will create good jobs (Danney 2021; Ivey 2024). They claim that
adopting most or all components of the model creates a
business-friendly environment with low taxes, which will attract
businesses (including major corporations) that will in turn provide an
abundance of jobs. In theory, if jobs were abundant and/or growing
faster than the population, competition among employers to attract and
retain workers would lead them to raise pay, improve benefits
(including health insurance and pensions), and find other ways to make
these jobs more attractive.

However, Childers (2023; 2024b) finds that job growth across the South
has not kept pace with growth in the working-age population. Further,
she finds that the share of the prime-working-age population that was
employed—the prime-age employment-to-population ratio—was lower
across the South than in any other region of the country (Childers
2024b). This reflects many factors, including a lack of access to
affordable childcare and reliable public transportation that helps
workers get and keep jobs. It also reflects the fact that Southern
states incarcerate their residents at very high rates, which translate
into large numbers of Southerners with criminal histories. Finally,
many available jobs are unattractive and do not provide workers with
the income and benefits needed to support themselves or their
families.

In this report we explicitly examine the argument that the Southern
economic development model produces good jobs for workers across the
region.1
[[link removed]] The
data show that wages and access to benefits such as health insurance
and pensions in Southern states that embrace the Southern model lag
those of workers in other regions that do not adopt any or most of the
model’s components. The Southern economic development model does
not—and cannot—lift all Southerners to economic security or
prosperity.

Southern states consistently have the lowest wages of any region

Southern states have lower median wages than other regions

For over 40 years, the typical worker in the South has been paid less
than their counterparts in every other region of the country. FIGURE
A shows the median hourly wage for workers by region since 1979 in
constant 2021 dollars. The median wage is the wage of the worker in
the exact middle of the wage distribution: This worker is paid more
than half the workforce and less than the other half.

In 1979, the median Southern worker was paid the equivalent of $16.42
per hour in 2021 dollars. This is 16.4% less per hour than their
counterparts in the West, the region with the highest median wages in
1979. It was also 12.6% and 10.2% lower than the wages of workers in
the Midwest and Northeast, respectively. Median wages have risen
nationwide since 1979, with growth ranging from 12.1% in the Midwest,
12.4% in the West, 22% in the South, and 30.2% in the Northeast by
2021, as shown in Figure A.

Since the early 1980s, the Midwest has consistently had the
second-lowest wages, but over time the gap between the South and the
Midwest has somewhat closed; wages in the South were only 4.8% lower
than Midwest wages in 2021. However, wages in the South have never
been as high as those in other regions. They remained substantially
lower in 2021, when they were 9.3% lower than wages in the West and
15.9% lower than wages in the Northeast—regions where most state
governments have rejected the Southern economic development model. In
fact, the gap between typical wages in the South and the Northeast in
2021 is roughly the same as the gap between the South and West in
1979—meaning that the Southern model has not afforded any advantage
in pay to workers in the South relative to workers in other regions
over the last 40 years. Instead, the Southern model has ensured that
eight of the 10 lowest-wage states in 2021 were in the South:
Arkansas, Kentucky, Louisiana, Mississippi, Oklahoma, South Carolina,
Tennessee, and West Virginia.2
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Figure A

Low-wage workers make up a larger share of the workforce across the
South

While the median wage is an important indicator of the economic
well-being of workers overall, it does not tell us how particular
groups of workers are faring, such as the low-wage workforce. The
low-wage workforce here is defined as workers that are paid less than
$15 per hour. FIGURE B shows the share of workers that are paid less
than $15 per hour in each region.

Figure B

The share of the workforce made up of low-wage workers has fallen
nationwide since the COVID-19 recession. In 2019, before the pandemic,
the share of workers in the South that were paid less than $15 per
hour was 26%—more than one in four workers. This is a much higher
share than other regions; in the Midwest, 22.2% of workers were part
of the low-wage workforce, and fewer than one in five workers in the
Northeast and West made up that share.

After the pandemic, a period when strong labor market conditions gave
workers leverage to command a higher wage and many states were raising
their minimum wages, the share of workers that were paid less than $15
per hour fell in all regions (Gould and deCourcy 2023). However, the
smallest decline was in the South. The share of workers paid less than
$15 per hour fell from 26% of workers to 22%, a decline of just four
percentage points. There were much larger declines in the share of
workers that were paid low wages in the Midwest (5.6 percentage
points), the Northeast (5.9), and the West (7.8).

The share of the workforce made up of low-wage workers has fallen
nationwide since the COVID-19 recession. In 2019, before the pandemic,
the share of workers in the South that were paid less than $15 per
hour was 26%—more than one in four workers. This is a much higher
share than other regions; in the Midwest, 22.2% of workers were part
of the low-wage workforce, and fewer than one in five workers in the
Northeast and West made up that share. After the pandemic, a period
when strong labor market conditions gave workers leverage to command a
higher wage and many states were raising their minimum wages, the
share of workers that were paid less than $15 per hour fell in all
regions (Gould and deCourcy 2023). However, the smallest decline was
in the South. The share of workers paid less than $15 per hour fell
from 26% of workers to 22%, a decline of just four percentage points.
There were much larger declines in the share of workers that were paid
low wages in the Midwest (5.6 percentage points), the Northeast (5.9),
and the West (7.8).

Figure C

FIGURE C shows the share of workers that are part of the low-wage
workforce in each state (see also EPI 2024a). These data show that the
differences between regions are not driven by a few outlier states. In
several Southern states—Mississippi (29%), Louisiana (27%), Oklahoma
(24%), Arkansas (23%), West Virginia (23%), and Alabama (22%)—the
share of the workforce that is low wage is higher than that of the
region as a whole (22%). Delaware (13%), Virginia (12%), and Maryland
(9%), however, have the smallest low-wage workforces of all states
across the South. Notably, although these states are part of the South
Census Region, their state economic policies tend to be more in line
with those of Northeastern and Western states.

Outside the South, New Mexico (21%) is the only state with more than
one in five workers paid less than $15 per hour. In New Hampshire and
North Dakota, just 9% of workers are low-wage workers. Even fewer
workers receive such low pay in Alaska (6%), Colorado (7%), Minnesota
(7%), and Vermont (7%).

Every state that lacks a state minimum wage is in the South

Many states with smaller low-wage workforces have accomplished this by
raising their state minimum wage above the federal minimum wage, which
has been stuck at $7.25 per hour since 2009. The value of the federal
minimum wage has fallen such that it has less purchasing power today
than it has had at any time since 1956 (Cooper, Hickey, and Zipperer
2022).

As federal policymakers have left the federal minimum wage to erode,
policymakers in most states have raised their state minimum wages, as
have lawmakers in nearly 60 cities and counties—raising pay for
their state’s low-wage workers (EPI 2024b; Hickey 2023). The federal
minimum wage is a floor for wages; workers generally must be paid at
or above this rate.3
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example, in California, Connecticut, D.C., Maryland, Massachusetts,
New Jersey, New York, and Washington, the minimum wage is $15 or
higher, ensuring workers in these states are paid decent wages.

In FIGURE D, the data show that across the South, many states have
chosen not to raise their state minimum wage above the federal minimum
wage. One Southern state—Georgia—has a minimum wage lower than the
federal minimum wage, while Kentucky, North Carolina, Oklahoma, and
Texas have state minimum wages equal to the federal minimum wage. Five
Southern states—Alabama, Louisiana, Mississippi, South Carolina, and
Tennessee—have no state minimum wage at all. It is important to note
that nationally, only these five states completely lack a state
minimum wage.

Figure D

In addition to Maryland and D.C. that have minimum wages of $15 or
higher, several other Southern states have minimum wages above the
federal level but below $15. Not all were the result of actions by
policymakers. The District of Columbia ($17), Maryland ($15), Delaware
($13.25), Virginia ($12), and West Virginia ($8.75) all have higher
minimum wages as the result of legislation or a city council
ordinance. In Florida ($12) and Arkansas ($11), higher minimum wages
were the result of a ballot measure (EPI 2024b; FPI 2024; Hickey
2023).

It is also important to note that 19 states across the country have
indexed their minimum wages for inflation, so that the minimum wages
are adjusted each year to account for rises in inflation. Of these 19
states, only Florida, Virginia, and the District of Columbia are in
the South (EPI 2024b).

These data illustrate the importance of state policies for the
economic well-being of workers and their families. They also show the
failure of the policies that make up the Southern economic development
model. This model has failed to ensure that workers are paid enough to
lift a family out of poverty, and has certainly failed to ensure
workers’ economic security, especially in states with more than one
in five workers paid less than $15 per hour. Even workers in the
middle of the earnings distribution have been paid less than their
counterparts in other regions over the last four decades.

Adjusting wages for differences in the cost of living still leaves
workers across the South with lower earnings

The wage data presented thus far show that the Southern economic
development model has not provided any real regional advantage to
workers, with unremarkable growth in typical wages and a larger share
of the workforce paid particularly low wages. Yet 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.
Alternatively, they argue that an abundance of jobs means there is
more work to be had, and lower hourly wages might be offset by greater
hours of work annually. Neither of these arguments has merit.

FIGURE E shows a map with the nominal median annual earnings and the
median annual earnings adjusted for differences in the cost of living
for all 50 states. Median 2022 earnings are adjusted using the
regional purchasing power parity index from the Bureau of Economic
Analysis (2023). This allows us to compare the real purchasing power
of a typical workers’ annual pay across states, as if the overall
cost of living (i.e., prices) were the same across the country.

Figure E

Figure E shows that adjusting for state-level differences in the cost
of living has a substantial impact on our understanding of the
purchasing power of workers in different states. States with extremely
high costs of living such as New York, California, and Hawaii have
lower relative earnings—i.e., the purchasing power of each of their
dollars is lower—when we take the higher cost of living into
account. The high costs of living in these states are typically driven
by an inadequate housing supply, a problem less acute in Southern
states, where an abundance of land and limited regulation of housing
development has resulted in sprawling growth in and around many
Southern cities. Thus, it is true that despite lower relative earnings
in many Southern states, their dollars provide them with greater
purchasing power than the nominal value of those dollars would
suggest. Median annual earnings of $44,499 in Mississippi have about
the same purchasing power as $54,040 in Maine or $53,811 in Arizona.

Even when state-level differences in the cost of living are
considered, Southern states continue to have some of the lowest wages
in the country. Only two Southern states—Maryland and Virginia—are
among the 10 highest-earning states.4
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among the 10 states with the lowest cost-of-living-adjusted median
earnings, half are Southern states. Of the Southern states with the
lowest earnings, Florida has the lowest of all states, followed by
Mississippi, Arkansas, South Carolina, and Oklahoma.

As for the arguments that the Southern economic development model will
generate more jobs or that workers can work more hours to increase
their earnings, neither of these claims are reflected in the data.
Childers (2023; 2024b) showed that job growth across the South has not
been able to keep up with growth in the working-age population since
the early 2000s and only moved in tandem with population growth before
the 2000s. This indicates that the Southern economic development model
has failed to outperform other regions that did not adopt this model.
Further, the share of the prime-age population (ages 25–54) that is
employed is lower across the South than in other regions. For example,
of the 10 states with the lowest prime-age employment-to-population
ratio (EPOP), seven—Alabama, Arkansas, Kentucky, Louisiana,
Mississippi, Oklahoma, and West Virginia—are Southern states
(Childers 2024b). Finally, analysis of Current Population Survey data
on the average number of family hours of work across states shows that
Southern states tend to have fewer hours of work per family relative
to states in other regions. In 2019, before the pandemic, six of the
10 states with the fewest numbers of work hours were in the South:
Alabama, Arkansas, Louisiana, Mississippi, South Carolina, and West
Virginia. Of the 10 states with the highest number of work hours, only
Maryland is in the South (Appendix Table 2).

These data show that the Southern economic development model is not
providing the promised benefits to workers and families across the
South. What the model has done is to ensure lower wages for workers
across the region. 

Employer-provided benefits

Although probably the most salient for most workers, earnings are just
one component of job quality. Other crucial aspects of job quality are
also influenced by, if not directly shaped by, the state and local
political environment and policy choices. These include workers’
access to an employer-provided pension, coverage by employer-provided
health insurance, access to paid leave, and ability to form unions.

Fewer and fewer workers have been covered by employer-provided health
insurance over the last 30 years

The primary way that most working-age adults and their families
receive health insurance is through employer-provided coverage
(Keisler-Starkey and Bunch 2023). FIGURE F shows trends in the share
of private-sector workers working at least 20 hours per week and 26
weeks per year who have employer-provided health insurance, starting
in 1981. The dramatic decline in health insurance coverage across
regions is quite striking, illustrating a decline in this measure of
job quality overall.

Figure F

In 1981, 68.7% of working Americans had employer-provided health
insurance. While rates were higher in the Northeast (71.7%) and
Midwest (71.6%), they were slightly lower in the West (68%) and
substantially lower in the South (64.5%). Over the following 30 years,
however, far fewer workers were covered by employer-provided health
insurance across all regions. Coverage nationally fell to 52.6% in
2019, but coverage rates in the West (52.5%) and the South (50.7%)
remained lower than the national rate, and the rates in the Midwest
(55%) and the Northeast (53.9%) remained higher. As Figure F shows,
the differences among regions have declined, but workers in Southern
states are consistently the least likely to have employer-provided
health insurance coverage.

The share of workers with a pension is declining across regions, but
workers across the South remain the least likely to have one

Historically, many jobs that were considered good jobs provided
workers with a traditional pension. A traditional pension is often
referred to as a defined benefit plan, because the benefit that the
worker will receive is defined upon hire. Because pensions offer a
guaranteed, stable income—unaffected by swings in the stock
market—these plans provide workers with economic security after they
retire. Pensions have long been considered one leg of the three-legged
stool that is supposed to support workers in retirement. The remaining
two legs are personal savings and social security (DeWitt 1996).
Unfortunately, large segments of the working population are paid such
low wages that they are unable to save any significant amount of money
for retirement. FIGURE G shows that access to an employer-provided
pension has also declined precipitously across all regions, but
workers across the South have consistently been less likely than their
counterparts in the Midwest and Northeast to receive a pension over
the last 40 years, beginning in the early 1980s, when they were the
absolute least likely of workers in any region.

In 1981, almost half of private-sector workers—48.9%—had a
pension. The rates were higher in the Midwest (53.6%) and the
Northeast (53.6%). They were lower in the West (45.5%) and the South
(43.7%). By 2019 there had been a precipitous decline in the share of
workers covered by a pension, leaving just 32.5% of workers in the
country with a pension. There was a decline across all regions,
resulting in 38.4% of workers in the Midwest, 33.8% in the Northeast,
31.1% in the West, and 29.4% in the South having a pension.

Figure G

These declines in pension coverage are occurring at a time when the
share of the population 65 and older has been increasing. The South
has the largest number of people aged 65 or older—21.1
million—compared with 12.6 million in the West, 11.9 million in the
Midwest, and 10.2 million in the Northeast. The South (42%) and the
West (46.9%) are also experiencing the fastest growth in their
65-and-older population, with somewhat slower growth in the Midwest
(31.8%) and Northeast (30.7%) (Caplan and Rabe 2023). The growth of
the 65-and-older population includes retirees who relocate to the
South from other regions. Of the three states with an increase of over
one million in the 65-and-older population between 2010 and 2020,
two—Florida and Texas—are in the South (Caplan and Rabe 2023).5
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While many of these workers may have access to a 401(k) plan, also
known as a defined contribution plan, these plans are a far less
reliable income source than the defined benefit pension. These plans
are called defined contribution plans because it is the employer’s
contribution to the plan that is determined at the beginning of the
employment relationship—and the employer’s contribution can be
$0—rather than defining the benefit the employee will receive, as
with the defined benefit pension (Morrissey 2016). When employers do
contribute to the plan, they will often only match the amount the
employee contributes up to a specific percentage of the employee’s
salary. According to National Association of Plan Advisors (2017), it
is most common for employers to contribute up to 6% of an employee’s
salary to their 401(k). If the employee’s earnings are too low to
participate, the employer typically does not contribute. Also, unlike
pensions, where the employer is responsible for ensuring workers
receive a predictable stream of income in retirement, the 401(k)
shifts responsibility for the investment decisions and the associated
risks onto the worker. This shift ultimately means less economic
security in retirement for many of today’s workers.

Workers across the South have less access to paid leave than their
peers in other regions

Paid sick leave

Access to paid sick leave and paid family and medical leave are
crucial indicators of job quality. Paid sick leave ensures that
workers can take time off from work if they or a family member are
sick, have an injury, or need to seek medical treatment. Because there
are no federal laws guaranteeing paid sick leave, in states and
localities that do not have laws requiring paid leave, employers
decide whether workers will be paid. Unfortunately, low-wage workers
are much less likely to be offered paid time off than workers in
better-paying jobs (Gould and Wething 2023). Low-wage workers are also
often the least likely to be able to afford to lose their wages. This
means that many go to work when they are sick or send their children
to school sick, endangering public health. For example, one survey
found that seven in 10 women working in the fast-food industry had
gone to work when they were sick—coughing, sneezing, with a fever,
or vomiting­—because they did not have paid leave (National
Partnership 2016). Thus, paid sick leave not only protects workers but
it also protects the public by ensuring workers are not coming to work
sick.6 [[link removed]]

Table 1

As of January 1, 2024, 15 states and the District of Columbia have
passed paid sick leave laws (KFF 2023). Three states—Illinois,
Maine, and Nevada—have more general paid leave laws that workers can
use to take time off for illness or injury, but they are not limited
to using them for these purposes (Illinois DOL n.d.; Williamson 2023).
Across all these states, only Maryland and the District of Columbia
are in the South.7
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1 shows data from one study of access to paid sick leave for states
across the South.

The authors found that in all but three states that had a state paid
sick leave law, more than 90% of workers had access to paid sick days.
In contrast, in states that did not have a state paid sick leave law,
access levels ranged from as low as 64.6% to 75.9%, with most state
rates below 70%. Seven of the 10 states with the least
access—Florida (34.9%), Oklahoma (33.6%), Tennessee (32.9%),
Louisiana (32.8%), Arkansas (32.7%), South Carolina (32.7%), and Texas
(32.6%)—were in the South (Mehta and Milli 2023). This amounts to
millions of workers in states like Florida (3.4 million), Tennessee
(1.1 million), and Texas (4.4 million) lacking access to a basic
benefit (Mehta and Milli 2023).

In contrast to most Southern states, more than 90% of workers in the
District of Columbia (94%) and Maryland (90.8%) had access to paid
sick leave—they both have paid sick leave laws­. 

Paid family and medical leave

In addition to needing time off when they are sick, workers also often
need extended time off to care for and bond with a new baby or when
they or someone in their family have more serious medical needs. Good
jobs ensure that workers can take the time they need. Unfortunately,
the U.S. does not have a federal guarantee of paid family and medical
leave for workers. What the U.S. does have is the Family and Medical
Leave Act (FMLA), which provides unpaid, job-protected leave to
“eligible” workers to care for a newborn or newly adopted child; a
sick or injured child, spouse, or parent; or their own serious health
issue. Unpaid, job-protected leave is also provided to family members
of a spouse, parent, or child that is on “covered active duty”
(DOL 2023).

The FMLA, signed into law in 1993, provides 12 weeks of leave in any
12-month period or 26 weeks for a spouse, child, parent, or next of
kin caring for an injured servicemember (Gould 2019; Shabo 2024a).8
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this law is important, it has serious shortcomings. First, it is
unpaid, which puts many low-wage workers in economic peril if they
must take leave. If they simply cannot afford the lost income, they
will not be able to properly care for themselves or their families.

The FMLA also excludes large swathes of workers; it just covers 56% of
workers (Brown, Herr, Roy, and Klerman 2020; Gould 2019; Shabo 2024a).
Workers can be found to be ineligible for FMLA coverage because they
haven’t worked for the employer for at least 12 months; because they
didn’t work 1,250 hours in the last 12 months for their current
employer; or because they work at a location where the employer does
not have at least 50 employees within 75 miles of the workplace
(Brown, Herr, Roy, and Klerman 2020; DOL 2023). These exclusions
create inequities in whose jobs are protect along the lines of income,
race, ethnicity, and education (Brown, Herr, Roy, and Klerman 2020).

Increasingly, however, some states are stepping in to address some of
the inadequacies of the FMLA. Nine states—California, Colorado,
Connecticut, Massachusetts, New Jersey, New York, Oregon, Rhode
Island, and Washington—and the District of Columbia currently
provide workers with state paid family leave benefits (Shabo 2024a;
Shabo 2024b). Of these, only the District of Columbia is in the South.
An additional four states—Maryland, Delaware, Maine, and
Minnesota—have enacted state paid family and medical leave laws that
will provide benefits starting in 2026 (Shabo 2024b). Just two of
these are in the South, and none of the Southern states with leave
adopt the Southern economic development model.

Most state plans take a progressive approach, which replaces a larger
share of low-wage worker’s wages than they do of high earner’s
wages. For example, in California, low-wage workers will receive 90%
of their typical earnings beginning in 2025 (Shabo 2024b). Today it is
a 70% wage replacement rate for low-wage workers and 60% for other
workers. This is not limited to California, however. Only
Massachusetts (80%) and New Jersey (85%) have a wage replacement rate
below 90% (Shabo 2024b).

Most state paid family and medical leave programs are also funded in a
sustainable way with a small tax paid by the employer, employee, or a
combination of both. This money goes into a public fund, which pays
out the benefit to workers (Shabo 2024b; Williamson 2023). State paid
family leave policies also embrace a broader definition of family that
tends to include domestic partners (Shabo 2024b).

As noted, only three Southern states—Delaware, D.C., and
Maryland—have or will have a state paid family and medical leave
program by 2026. Six Southern states have taken a very different
approach to providing paid family leave. Alabama (2023), Arkansas
(2023), Florida (2023), Tennessee (2023), Texas (2023), and Virginia
(2022) have adopted private insurance models of paid leave that allow
private insurance companies to sell insurance policies to employers
and/or to workers themselves to provide benefits while they are on
leave (Shabo 2024b; Widiss 2023).9
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This approach has been embraced by the insurance industry. The
National Conference of Insurance Legislators adopted a paid family
leave model law at their 2022 annual meeting. A press release touts
the model law as providing “a framework for states to create a new
line of insurance in which any insurer licensed to transact life
insurance or disability income insurance will also be able to provide
coverage for paid family leave” (Insurance News Net 2022).

Because these models have been enacted so recently, there is not much
data on what they look like or how they will perform. Despite this,
Shabo (2024b) found that the estimated costs in New Hampshire of using
a similar model was overall more expensive than state paid family
leave programs. Widiss (2023) highlights that this
approach resembles the short-term disability model, a benefit that
just 40% of all workers in the United States and 22% of low-wage
workers in the country receive from their employers. Across the South,
just 32% of workers receive this benefit (Widiss 2023).
Further, Widiss points to the short-term disability policies
replacing just 50%–60% of workers’ regular wages, a much lower
replacement rate than state paid leave plans. The private insurance
models for paid leave will therefore almost certainly provide
less coverage, cover fewer workers, increase already large disparities
in access, and will likely be more expensive (Widiss 2023).

Being able to take time off work for the birth of a new child, to
provide care for a sick parent, or to support a disabled spouse
without fearing job loss is crucial for all families. Knowing that you
and your family will be protected from having an economic emergency on
top of a physical illness or injury is just one of the most basic
rights that all workers should have access to—independent of their
race, education, income, region, or size of employer.

Southern state lawmakers have also disempowered local communities

Unionization rates are a key predictor of job quality and the overall
economic well-being of Southerners

Finally, we examine union coverage rates across the South. A key
component of the Southern economic development model is a zealous
opposition to unionization or collective bargaining. The model’s
proponents have sought to ensure as much as possible that workers are
not empowered, which allows them to advertise their states as
“business friendly.” Business friendly, in their minds, means low
wages and few (if any) benefits for workers, and low taxes and few
regulations for businesses.

When workers are able to join together in a union, they are empowered
to improve their own economic status, even when politicians refuse to
raise their state minimum wage or to ensure access to pensions or paid
leave. Research has repeatedly shown that higher rates of unionization
and union coverage are associated with higher wages; increased access
to employer-provided health care, paid sick leave, and paid family and
medical leave; smaller wage gaps by race and sex; better working
conditions; and lower economic inequality, among other benefits
(Banerjee et al. 2021; Freeman, Han, Madland, and Duke 2015; Frymer
and Grumbach 2020; Mishel 2021; Mishel, Rhinehart, and Windham 2020).

FIGURE H shows union coverage rates by region. Union coverage rates
are much lower across the South than in other regions of the country.
While union coverage rates have generally declined across regions,
rates across the South in 2021 (6%) are less than half that of the
Midwest (12.6%), the region with the next-lowest rate. They are
highest in the Northeast (17.9%) and the West (15%), regions that have
higher median wages and a smaller share of workers being paid less
than $15 per hour. States in the Northeast and West are also more
likely to have paid sick leave laws and state paid family and medical
leave programs. Union coverage rates across states are a clear
indicator of job quality and of worker-friendly state-level policies.

Figure H

FIGURE I shows union coverage rates for individual states across the
South in 2019 and 2023. As with the indicators above, in 2019 before
the pandemic, Maryland (12.7%), Delaware (9.9%), and D.C. (10.2%)
fared better than most Southern states in terms of having a larger
share of their workers covered by a union. West Virginia (11.1%),
however, has the second-highest union coverage rate. The lowest union
coverage states are South Carolina (2.7%), North Carolina (3.4%), and
Georgia (5%), with Virginia and Texas tied at 5.2%—compared with a
national rate of 11.2% in 2023 (BLS 2024).

Figure I

Half of states across the South (seven of the 14 shown in Figure I)
experienced a decline in union coverage following the pandemic. The
largest declines were in Florida (-1.4 percentage points), Alabama
(-1.2), and West Virginia (-1). These declines are not because workers
do not favor unions; we have seen increased demands for unions from
public school teachers and workers at Starbucks, Amazon, Google,
Trader Joe’s, and many other private companies across the nation (De
Vynck and Gurley 2022; Durbin 2023; Hsu 2022; Greenhouse 2023; Ingram
2023; Scheiber 2023). In fact, in the first half of 2022 alone, unions
won 662 elections (Chernikoff 2023). In the first eight months of
2023, 323,000 workers walked off the job to demand improvements in
pay, benefits, or working conditions (Chernikoff 2023). While
nationally there has been little change in union coverage rates, there
has been an increase in absolute numbers of workers joining unions
(Shierholz, McNicholas, Poydock, and Sherer 2024). Notably, Figure I
shows that since 2019, there were small increases in union coverage
rates in several Southern states, with the largest increases in
Kentucky (1.8 percentage points), Tennessee (1.4), and Mississippi
(1.4).

Across the South, most states have passed so-called right-to-work
laws, with the exceptions of Delaware, Maryland, and the District of
Columbia. Right-to-work laws do not, in any way, guarantee workers
will have access to a job if they want one. They simply make it harder
for unions to be financially sustainable. Unions are legally required
to protect and advocate on behalf of all workers at a company, not
just union members. Because contract negotiations and legally
representing workers—whether they are union members or not—can be
expensive, in some states, private-sector unions can charge nonmembers
a small agency fee to cover the costs of negotiating for them. In
right-to-work states, unions are not allowed to collect this fee,
effectively starving unions of resources (NCSL 2023).

And it is not only through right-to-work laws that politicians across
the South and beyond oppose unions. Senator Mike Hodges introduced
Senate Bill 362 in Georgia, a bill that would bar new businesses in
Georgia from receiving state incentives if they voluntarily recognized
a union based on a card check rather than a more costly election (R.
Williams 2024; D. Williams 2024). Card checks are among the
traditional and legal ways unions are recognized; when a majority of
workers agree to sign authorization cards, they recognize the union as
their bargaining representative (Eisenbrey 2009; 2012). Senator Jack
Johnson sponsored a similar bill in Tennessee (Johnson 2023).
Essentially, these bills attempt to penalize employers who want to
respect workers’ right to join with their coworkers to collectively
bargain for fair wages, good benefits, and safe working conditions.

Efforts to organize workers across the South have seen real pushback
from governors—from Kay Ivey in Alabama referring to efforts to
organize workers as an “attack” to Governor Kemp in Georgia
putting his full support behind Senator Hodges’s bill and Governor
McMaster of South Carolina vowing to “fight [unions] all the way to
the gates of hell” to defeat “pro-union policies” in his state
(Harris 2024; Ivey 2024; Kemp 2024).

In addition to right-to-work laws and the overall opposition from
political leaders across the region, workers seeking to organize a
union typically face intense opposition from employers. Companies
spend $340 million dollars per year on consultants to help them
prevent unionization among workers, and one in five unionization
campaigns results in a charge that a worker was fired for trying to
unionize (McNicholas et al. 2019). Further, because of the political
opposition to unions, when workers try to organize, employers know
that they can illegally intimidate them, refuse to recognize the
union, or negotiate a contract in bad faith—with little to no fear
of being held accountable by political leaders.

The fierceness of the opposition to unions, however, is perhaps one of
the best indicators of the power of workers joining together to demand
fair pay and fair treatment.

Preemption prevents local lawmakers from improving economic conditions
for their constituents

In this report, we examined the evidence on job quality across the
South and across the states within the South. We showed that workers
in Southern states have worse job quality and are less likely to
experience true economic security. While political leaders in many
states across the South oppose policies that would empower workers,
within these states, there are city and county officials who support
higher minimum wages and access to pensions and paid leave for
workers. A primary reason that many local jurisdictions across the
South do not have these policies that support and empower workers in
place is state-level preemption. Preemption is when state policymakers
either block a local ordinance or dismantle an existing ordinance.
States across the South with majority-white state legislatures have
used preemption laws more than policymakers in states outside the
South. They use preemption to block ordinances that would increase the
economic security of people in localities where a majority of
residents are people of color (Blair, Cooper, Wolfe, and Worker 2020).

FIGURE J shows a map of U.S. states and the number of policies that
have been preempted at the state level. Across the South, local
jurisdictions have been preempted from raising the minimum wage,
providing paid leave, ensuring workers are given fair work schedules,
or requiring contractors to pay workers the prevailing wage.
Localities are not allowed to require project labor agreements,
contracts that are unique to the construction industry and negotiated
between labor unions and contractors laying out the terms and
conditions of employment for construction projects. They also preempt
the regulation of gig economy work­, such as driving for Uber or
Lyft. These laws often prevent regulation that would treat these
workers as employees and entitle them to all the accompanying rights
and protections. Instead, localities require they be treated as
independent contractors who are not entitled to the same protections.

Figure J

While the Southern economic development model emerged out of efforts
of powerful interests—including politicians, plantation owners, and
other employers—to continue extracting undervalued labor from Black
men and women following the Civil War, the use of preemption across
the South is a continuation of that process. All the data presented in
Figure J show the efforts of state officials across the South to
ensure wages are low and workers are economically insecure, and to
ignore the needs of workers to care for their families. The harms
caused by these policies are not limited to Black and brown
Southerners; they hurt all workers and families across the region,
although the greatest negative impacts continue to be on Black and
brown Southerners.

Conclusion

To begin to work toward changing the Southern economic development
model, it will be important for Southerners from all
backgrounds—across race, ethnicity, gender, immigrant statuses, and
income levels—to stand together and build the coalitions needed to
demand policymakers create a new economic development model. Workers
and families across the South deserve an economic model that centers
and empowers workers and families, providing all workers with the
wages and benefits that would ensure their economic security and allow
them to sustain their families. This includes:

* raising the minimum wage to a living wage
* ensuring all workers have health insurance
* providing workers with a pension
* giving all workers access to paid leave, including paid sick days
and paid family and medical leave

Finally, and perhaps most important, workers must be able to come
together in a union to demand fair wages and benefits, a safe working
environment, and the ability to have a say about their
workplace—even when politicians are intransigent. This is a model
that would serve the interests of all Southerners.

Notes

1.  [[link removed]]In
this report, we use the U.S. Census Bureau’s definition of the South
Census Region, which includes: Alabama, Arkansas, Delaware, Florida,
Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina,
Oklahoma, South Carolina, Tennessee, Texas, Virginia, West Virginia,
and the District of Columbia. We note when analyses focus on a subset
of these states.

2.  [[link removed]]For
the median hourly wage for all states ranked from highest to lowest,
see Appendix Table 1.

3.  [[link removed]]There
are exceptions that allow some workers to be paid less than the $7.25
federal minimum wage. Some groups covered by these exceptions include
tipped workers, workers with disabilities, some youth workers, and
seasonal or agricultural workers. However, when a state law requires a
higher minimum wage than federal law, the state law would apply (U.S.
Department of Labor n.d.).

4.  [[link removed]]Data
for the District of Columbia is not included in the ranking of states
here because it is a city-state and the seat of the federal
government, which artificially raises wages. If D.C. had been
included, it would have been among the 10 highest-earning states.

5.  [[link removed]]The
third state is California.

6. 
[[link removed]]Typically,
paid sick leave laws are structured so that workers earn time off
based on how much they work. For example, a worker may earn one hour
of paid sick leave for every 30 hours they work, up to a maximum
number of earned hours (Mehta and Milli 2023).

7. 
[[link removed]]States
that have paid sick leave laws are: Arizona, California, Colorado,
Connecticut, the District of Columbia, Maryland, Massachusetts,
Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island,
Vermont, and Washington (National Partnership 2023). Some cities and
counties have also passed paid sick leave laws, but only
one—Montgomery County, Maryland—is in the South. This reflects the
fact that state lawmakers across the South have used preemption to
block city and county laws that would protect workers but that state
lawmakers oppose (EPI 2024).

8. 
[[link removed]]Military
Caregiving Leave was not part of the original FMLA, but the FMLA was
amended to add these provisions.

9.  [[link removed]]New
Hampshire also provides paid family and medical leave through an
insurance program that is required for public employers but is
voluntary for private employers, who may purchase a plan for their
employees, share the costs with employees, or require employees to
purchase the plan to participate (Landroche n.d.; Shabo 2024a).

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Appendix

Appendix Table A

_CHANDRA CHILDERS is a senior policy and economic analyst with the
Economic Analysis and Research Network (EARN) at EPI. Her work is
primarily focused on supporting EARN’s state and local policy
research and advocacy network in the Southern United States. Childers
is committed to economic justice and ensuring that all workers have a
voice in their workplaces and that they experience real economic
security independent of race, sex, or economic status. Using an
intersectional lens, her research focuses on employment, earnings, job
quality, and worker power. _

_Before joining the EARN team at EPI, Childers was a Study Director at
the Institute for Women’s Policy Research, where her work focused on
occupational segregation, the gender wage gap, and Black, Hispanic,
and Native American women’s access to good jobs that pay well,
provide benefits, and ensure economic security for them, their
families, and their communities._

_Join with EPI to build an economy that works for everyone
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_We need your help in order to continue our work on behalf of
hard-working Americans. Our donors value our high-quality research,
reputation for truth-telling, and practical policy solutions. Your
tax-deductible gift to EPI makes you an important partner in providing
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