The South’s Economy Is Falling Behind: ‘All of a Sudden the Money Stops Flowing’

[Pedestrian]

This is about "the South" but certain cities are mentioned as examples and exceptions. Others could be. Let's approach it from that perspective: To which cities does it apply, which others may be an exception,

By Sharon Nunn
Updated June 9, 2019 5:58 p.m. ET

NATCHEZ, Miss.—The American South spent much of the past century trying to overcome its position as the country’s poorest and least-developed region, with considerable success: By the 2009 recession it had nearly caught up economically with its northern and western neighbors.

That trend has now reversed. Since 2009, the South’s convergence has turned to divergence, as the region recorded the country’s slowest growth in output and wages, the lowest labor-force participation rate and the highest unemployment rate.

Behind the reversal: The policies that drove the region’s catch-up—relatively low taxes and low wages that attracted factories and blue-collar jobs—have proven inadequate in an expanding economy where the forces of globalization favor cities with concentrations of capital and educated workers . . . .

In part because of its legacy of racial segregation the region has, relative to others, underinvested in human capital. Thus the South, the only region to have enjoyed such a dramatic rise in the postwar period, is the only one to experience such a retreat in the past decade . . . .

Within the South, individual cities and states have had widely diverging experiences. So-called Sunbelt cities like Charlotte and Atlanta have attracted both wealthier white-collar workers and retirees from richer regions, and less-educated workers from poorer, rural areas. Thanks to these cities, the entire region rebranded itself as the New South.

And neighboring states such as Texas, with its own unique economy, often got lumped in. But unlike the rest of the South, Texas is relatively urban, with five major metro centers. It has a thriving tech sector and ample reserves of oil and gas which have boomed in recent years thanks to the fracking revolution . . . .

To diversify and lure manufacturing, southern states, starting with Arkansas in 1947, began passing right-to-work laws that weakened unions and kept taxes lower than in the wealthier North. And they spent less, especially on education: an average of $1,869 per student in 2009 dollars, in 1960, compared with $2,741 nationwide, according to the Education Department. In part, this reflected the long shadow of slavery. In the Jim Crow era white taxpayers and politicians resisted spending that benefited blacks, according to historians . . . .

But in the 1980s, globalization and automation began eliminating the sorts of lower-skilled manufacturing jobs that the South had been so successful at attracting . . . .

. . . the dearth of college-educated workers has hampered its ability to attract high-paying white-collar information and professional and business services jobs, which made up less than 8% of the workforce . . . .

https://www.wsj.com/articles/the-sou...=hp_listb_pos5

[Obadno]

Originally Posted by Pedestrian

This is about "the South" but certain cities are mentioned as examples and exceptions. Others could be. Let's approach it from that perspective: To which cities does it apply, which others may be an exception,


https://www.wsj.com/articles/the-sou...=hp_listb_pos5

From what I see is how they tabulate their numbers, states with higher urban pops will do better (incomes) even though income is hardly an example of practical QOL. Louisiana, Mississippi, Alabama, South Carolina are relatively rural and relatively poorer states for any number of reasons but Florida, Texas, Tennessee, and North Carolina are not.

[TexasPlaya]

Delete

[Sun Belt]

I have a subscription to the WSJ, read the article [print version] this morning while drinking a cup of coffee.

My initial thoughts were, the South is the only region to have long term gains while the midwest is pretty much Steady Eddie.

"the South, the only region to have enjoyed such a dramatic rise in the postwar period"

And to Obadno's point, cost of living continues to skyrocket in the Northeast and West Coast, while it remains more stable in the south. Talking about nominal numbers while not factoring in CoL isn't an accurate depiction of the situation.

Also, there is a tale of two Souths. Jackson MS is quite the opposite of Charleston, not to mention Raleigh Durham, Charlotte and Atlanta. What's occurring in Memphis has little to nothing to do with Tampa.

[Pedestrian]

^^I think the general argument that southern states have tried to boost their economies with low wages (= "right to work" laws) and low taxes is true. The further point that they invest less in education is less widely true but true of certain states--Georgia, on the other hand, stands out as a subsidizer of higher education for residents. And as a result, I think there's a good argument that Atlanta is an exception to the economic stagnation argument.

The general point also emphasized that "cities with concentrations of capital and educated workers" are doing best. Since Texas got a general pass in the article, I'll argue that Raleigh-Durham is another exception to economic stagnation based on this reality. With three major universities quite close to one another and a number of US headquarters or research facilities of major corporations, the "Reasearch Triangle" lives up to its name. Indeed, long term I'd put my money here rather than on Charlotte. I think Charlotte got a transient boost from the success of one company--Bank of America--and time is now moving on.

[KB0679]

Originally Posted by Pedestrian

Indeed, long term I'd put my money here rather than on Charlotte. I think Charlotte got a transient boost from the success of one company--Bank of America--and time is now moving on.

I get what you're saying about the Triangle, but what you're saying about Charlotte simply doesn't jibe with reality. You say "time is now moving on" as if Charlotte is getting left behind or something which is the exact opposite of what's happening.

Bank of America certainly played a big role in Charlotte's ascendancy but you're grossly oversimplifying the issue. Much of the Southern banking industry overall has consolidated in Charlotte. First Union was the other big Charlotte bank that grew rapidly after interstate banking was permitted and it acquired another big regional NC-based bank, Wachovia. It fell victim to the recession and was acquired by Wells Fargo but now WF has its largest workforce in Charlotte. And of course more recently, NC-based BB&T merged with GA-based SunTrust and is moving the new bank headquarters to Charlotte. Ally Bank is growing its presence in the city and is currently constructing a new office tower in the city and there are rumors that its headquarters could relocate there as well. Aside from banking, you have other companies that have moved their headquarters to the region or established major operations there. It's quite obvious that the rise of BOA wasn't some isolated event but rather a catalyst for rapid economic growth that continues until this day with very little signs of slowing down. If the boost that Charlotte got from BOA's ascendancy was truly transient, the recession should have ended it, and indeed many wrote Charlotte off around the time. Instead it recovered much more quickly than folks thought it would and the city is undergoing its biggest building boom right now. So yeah, this talk about a "transient boost" and "time is now moving on" is beyond perplexing.

[jtown,man]

Originally Posted by Sun Belt

I have a subscription to the WSJ, read the article [print version] this morning while drinking a cup of coffee.

My initial thoughts were, the South is the only region to have long term gains while the midwest is pretty much Steady Eddie.

"the South, the only region to have enjoyed such a dramatic rise in the postwar period"

And to Obadno's point, cost of living continues to skyrocket in the Northeast and West Coast, while it remains more stable in the south. Talking about nominal numbers while not factoring in CoL isn't an accurate depiction of the situation.

Also, there is a tale of two Souths. Jackson MS is quite the opposite of Charleston, not to mention Raleigh Durham, Charlotte and Atlanta. What's occurring in Memphis has little to nothing to do with Tampa.

Wrong. Its all the same to these people. Its just a piece to prove conservatism sucks. Low-taxes, right to work, segregated past etc etc.

We suck here in the South, fine. Stop moving here.

[sopas ej]

Originally Posted by jtown,man

Wrong. Its all the same to these people. Its just a piece to prove conservatism sucks.

Interesting, being that the Wall Street Journal is a conservative publication.

[jtown,man]

Originally Posted by sopas ej

Interesting, being that the Wall Street Journal is a conservative publication.

I always hear liberals say this, which probably means they are in the middle.

In any case, a quick look at the writer's twitter proves, without a reasonable doubt, she is not a conservative by any means.

[Crawford]

Originally Posted by jtown,man

I always hear liberals say this, which probably means they are in the middle.

If you believe the Murdoch-owned Journal, the paper of record for Conservatives, is "in the middle", you have a very skewed perspective.

Anything short of fascism or revolutionary rhetoric will be "in the middle".

[Sun Belt]

Originally Posted by jtown,man

Wrong. Its all the same to these people. Its just a piece to prove conservatism sucks. Low-taxes, right to work, segregated past etc etc.

We suck here in the South, fine. Stop moving here.

Well, yeah. That's the Fake News narrative and it's of course totally false, fortunately most people can read behind the headlines.

There are some areas within the SUN BELT that are falling behind the overall trend and well behind the other boom cities. This is a long term trend that won't stop anytime soon, so long as the SUN BELT continues to provide housing solutions and low taxes that the established north and west coast cannot.

[Pedestrian]

Originally Posted by jtown,man

Wrong. Its all the same to these people. Its just a piece to prove conservatism sucks. Low-taxes, right to work, segregated past etc etc.

We suck here in the South, fine. Stop moving here.

Because the Wall Street Journal is well-known for its conservative-bashing--and this was on the front page.

Come on--you can do better than that. And as I said, they give one of the most conservative states, Texas, a pass in the article.

I personally love the South and it's agreat place to vacation or retire. But if I we're a 20-something with a new STEM degree from almost anywhere, there are very few southern cities where I'd look for employment.

Does anybody care to mention any where I might look and what industries/employers are there?

[jtown,man]

Originally Posted by Pedestrian

Because the Wall Street Journal is well-known for its conservative-bashing--and this was on the front page.

Come on--you can do better than that. And as I said, they give one of the most conservative states, Texas, a pass in the article.

I personally love the South and it's agreat place to vacation or retire. But if I we're a 20-something with a new STEM degree from almost anywhere, there are very few southern cities where I'd look for employment.

Does anybody care to mention any where I might look and what industries/employers are there?

Alright, but it really is just saying conservative economics and governmental policies suck. So my response would be:

Alight, well stop moving down here then!

I will hold my judgement of the source from now on

[jtown,man]

Originally Posted by Pedestrian

Because the Wall Street Journal is well-known for its conservative-bashing--and this was on the front page.

Come on--you can do better than that. And as I said, they give one of the most conservative states, Texas, a pass in the article.

I personally love the South and it's agreat place to vacation or retire. But if I we're a 20-something with a new STEM degree from almost anywhere, there are very few southern cities where I'd look for employment.

Does anybody care to mention any where I might look and what industries/employers are there?

Fair enough, and honestly, I dislike people 'killin the messenger.'

In any case, the point seems to be that conservative economics and governmental policies don't work. My response to that is fine, but could so many people stop moving here.

And really, and this is purely me just thinking outside the box, I don't think places like Alabama, Arkansas(which I know well), or Mississippi want the change that has happened to Texas. Sometimes people pick different things over purely economic rationale.

I had a Saudi come speak to my M.E class and he said something I will never forget. He said that he, and many people in Saudi Arabia, can't wait until the country runs out of oil. They dislike foreign influence and decadence and would rather have a more traditional country like before. I don't know how many people actually think like this guy, but I assume its a decent amount. Economic and "progress" achievements are sometimes secondary compared to other wants and needs. Not saying I fully endorse this viewpoint, but I think its important to note.

[eschaton]

I mean, on the statewide level, there are basically two different souths, each of which comprise seven states.

The "growing south" is VA, NC, SC, GA, FL, TN, and TX. Each of these states has some combination of a major urban area and/or draw for retirees from elsewhere in the country which cause a significant positive inflow of domestic migration. However, in the case of Virginia and perhaps Georgia, the states appear to be "maturing" to some degree, relying more on international immigration to keep afloat. In terms of raw numbers, TX and FL due to sheer size hoover up almost all of the growth.

The "stagnant/declining south" is WV, KY, AL, MS, LA, AR, and OK. Population growth as a whole is relatively low, in large part due negative or barely positive domestic migration. They may have some small metro areas which are fairly healthy, but these are not enough to cancel out the rural decline elsewhere in the state.

It's important to note this half/half thing, because you really don't see this in the other portion of the country which is growing - the West. Cali seems to have topped off, NM is a troubled state, and WY and AK have demographic hangover related to the fall in extraction employment. But basically every other state in the west is growing like gangbusters right now.

As to the WSJ, the editorial page is surely right wing, but the regular news articles don't really display any ideological slant in particular.

[subterranean]

[austlar1]

Even non-unionized cheap labor manufacturing jobs in southern states can't compete against low cost foreign competition. In addition, lots of traditional southern manufacturing jobs like textile manufacturing or furniture and cabinet manufacturing have all gone off shore. Drive through small southern towns off of the interstate and you'll see an endless number of small to medium sized abandoned factories and other businesses. It is not much different from what you find in similar cities and towns in the Rust Belt. There are, of course, exceptions, but they tend to be large and medium sized cities with diverse economies.

[JManc]

Texas gets lumped in with the south but it's not really apart of the south. It's its own thing; we have tacos, armadillos and oil.

[Pedestrian]

Originally Posted by JManc

Texas gets lumped in with the south but it's not really apart of the south. It's its own thing; we have tacos, armadillos and oil.

East Texas--the most east part next to Louisiana--is awfully "south".

It's about where the southern cotton economy once ruled (and, if you wish, where cactus lives), and that includes far east Texas. But again, the article I started this with rules Texas out from the general rule it is espousing, giving it credit for a thriving tech economy in parts and a thriving energy economy in other parts as well as great education, medical and tech-focused institutions. The importance of the latter is that Texas youth, wherever they are educated, can come home to work and earn a good living, using their educations. That isn't so true of other southern cities and states.

[JManc]

Originally Posted by Pedestrian

East Texas--the most east part next to Louisiana--is awfully "south".

It's about where the southern cotton economy once ruled (and, if you wish, where cactus lives), and that includes far east Texas. But again, the article I started this with rules Texas out from the general rule it is espousing, giving it credit for a thriving tech economy in parts and a thriving energy economy in other parts as well as great education, medical and tech-focused institutions. The importance of the latter is that Texas youth, wherever they are educated, can come home to work and earn a good living, using their educations. That isn't so true of other southern cities and states.

East Texas sure but that's a small portion. Even much of Louisiana doesn't fit neatly in the southern box.