Racist Southern economic model betrays workers

Governments across the South hype corporate-friendly policies of low taxes, little regulation, and obstacles to union organizing. Touted as promoting economic development, these ploys actually use racial divisions to keep all labor down.

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Labor historians have long written about the destructive role of racism to organizing, especially in the South, as well as heroic battles led by Black workers there.

In October 2023, the pro-labor think tank Economic Policy Institute (EPI) made an important contribution. Its report, “Rooted in racism and economic exploitation: The failed Southern economic development model,” lays bare how the South’s extreme pro-business policies were developed after slavery to keep Black people down and the supply of cheap labor high.

The study is a searing exposé of how these policies perpetuate institutional racism and hold back workers of all races. One flaw, though, is conveyed by the title itself, which characterizes the model as “failed.” It actually has done exactly what it was intended to do.

Racism corrosive to labor

The planter ruling class lost the Civil War, but returned to power after Reconstruction was overthrown. They then did everything possible to deny civil rights and a decent living to Black people and to obstruct racial solidarity.

Just how effective they were is revealed, as the EPI points out, in the historic struggles over a minimum wage. Only six of the 16 Southern states have levels better than the meager federal minimum.

Even worse, Southern congresspeople ensured the 1938 federal Fair Labor Standards Act excluded agricultural, domestic, and tipped workers from minimum wage protection. Why? Because these were the jobs relegated to formerly enslaved African Americans.

The anti-labor policies originated to hurt Black workers were then, of course, used against all.

Throughout the region, there is little to no enforcement of labor regulations. This encourages wage theft, nonpayment of overtime, and lax safety protections. Just one example: in Florida, 24.9% of workers have been cheated of even the minimum wage!

Such practices translate into the lowest individual earnings in the nation, as well as more poverty, paltry government aid programs, and an overall lower quality of life for all but those at the top.

Seven of the 10 states with the lowest unemployment benefits are in the South. All have large Black populations. Most Southern states have poverty rates above the national average. Nearly one in five Mississippi and Louisiana residents live in poverty.

Meanwhile, income taxes on corporations and the wealthy are kept low. States rely instead on regressive measures such as sales taxes, which fall heaviest on the poor. Accordingly, public services such as education, health care and utilities are underfunded.

Southern states have some of the lowest levels of assistance to families with children. Unsurprisingly, child poverty is the highest in the country.

Anti-union measures such as “right-to-work” laws are key to the Southern model. These force unions to represent all employees at a workplace, while the workers have no obligation to pay dues. This makes organizing, especially striking, difficult.

New labor dynamism

Raising the question of how to begin dismantling this century-and-a-half-old system, the EPI highlights the role of organized labor. They write, “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.”

The union movement has a checkered past regarding fighting for racial equality. Today’s movement is characterized by strong multiracial organizing under the leadership of Black and other people of color, women, LGBTQ+ people, and youth.

The challenges of the South are sparking new tactics and more rank-and-file participation. While not all attempts have succeeded, there’s lots of good news. The Starbucks unionization drive of the last two years won 74 elections across the South. In 2023, United Steelworkers organized nearly 1,500 bus manufacturing workers at Blue Bird in Georgia. AT&T Mobility workers in three Alabama cities joined the Communications Workers of America.

New organizations, such as Union of Southern Service Workers and Southern Workers Assembly, focus on education and organizing the unorganized. More folks are getting that “models” that work for capitalists will never give a fair shake to workers. Our needs are polar opposites.

Fighting for unionization and against right-to-work laws is a critical start to upending the Southern economic model and kindling a nationwide working people’s resurgence. Now, when the labor movement — and socialism — are enjoying strong national support and solidarity, is the time to move!

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