How the American South Drives the Low-Wage Economy

How the American South Drives the Low-Wage Economy.

by Harold Meyerson.

Manufacturing has continued to move to the South, and factory workers’ wages have gone south as well. Between 1980 and 2013, The Wall Street Journal has reported, the number of auto industry jobs in the Midwest fell by 33 percent, while those in the South increased by 52 percent. Alabama saw a rise in manufacturing jobs of 196 percent, South Carolina of 121 percent, and Tennessee of 103 percent; while Ohio saw a decline of 36 percent, Wisconsin of 43 percent, and Michigan of 49 percent.

(Photo: AP/Erik Schelzig)

Many firms opening factories in the South pay wages well below companies like General Motors and Ford, despite paying higher wages in their home countries, and block attempts to unionize. The one exception is Volkswagen, which has not opposed employees at its Chattanooga, Tennessee, plant (above) from attempting to unionize.

Even as auto factories were opening all across the South, however, autoworkers’ earnings were falling. From 2001 to 2013, workers at auto-parts plants in Alabama—the state with the highest growth rate—saw their earnings decline by 24 percent, and those in Mississippi by 13.6 percent. The newer the hire, the bleaker the picture, even though by 2013 the industry was recovering, and in the South, booming. New hires’ pay was 24 percent lower than all auto-parts workers in South Carolina and 17 percent lower in Alabama.

One reason wages continued to fall throughout the Deep South, despite the influx of jobs, is the region’s distinctive absence of legislation and institutions that protect workers’ interests. The five states that have no minimum-wage laws are Mississippi, Alabama, Louisiana, Tennessee, and South Carolina. Georgia is one of the two states (the other is Wyoming) that have set minimum wages below the level of the federal standard. (In all these states, of course, employers are required to pay the federal minimum wage.) Likewise, the rates of unionization of Southern states’ workforces are among the lowest in the land: 4.3 percent in Georgia, 3.7 percent in Mississippi, 2.2 percent in South Carolina, 1.9 percent in North Carolina. The extensive use of workers employed by temporary staffing agencies in Southern factories—one former Nissan official has said such workers constitute more than half the workers in Nissan’s Southern plants—has lowered workers’ incomes even more, and created one more obstacle to unionization.

From the American Prospect.  Read the entire piece.

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