Thursday, September 29, 2011

The South Has Highest Unemployment Rates & Economic Model Implodes

The sunbelt is now a miserable place if you are looking for a job.  Six of the 10 states with the highest unemployment are in the South.

The Southern model of economic development features low or no taxes, low or no regulation, low spending on public services and education, right to work, cheap labor. It has imploded and is now attracting national attention from economists and media.  On tuesday, September 27th, the NYT ran a big story about this trend more than 2 months after this blog noted what had happened in Dixie.  See

In this global economy, it is basically impossible to out-compete the world by a strategy of having the lowest labor costs, the lowest taxes, the lowest regulation, since some countries are prepared to push costs to zero or poverty levels.  Living in poverty is not the American dream.

Leading the Southern misery index is South Carolina with a 11.1% unemployment rate; Florida comes next at 10.7%; then North Carolina at 10.4%; Mississippi at 10.3%; Georgia at 10.2%; and Alabama at 9.9%.  Tennessee at 9.8% and Kentucky at 9.5% both have unemployment rates above the national average.

Despite the implosion of the Southern model of economic development, people in and out of Pennsylvania's state government still point to the South as a role model.  Though Pennsylvania was a national leader in creating jobs from January 2010 to April 2011, Pennsylvania is now mimicking the policies of Dixie.  The result has been that Pennsylvania's unemployment rate has risen from 7.4% in May to 8.2% in August.

The South's economic numbers and our rising unemployment pose a challenge to the ideologues who often sing Dixie for economic policy.  The lesson will be resisted but is clear. 

Pennsylvania should look away from the land of cotton when seeking ideas that work in today's global economy.

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