U.S. South Wages a Long War of Incentives, and Citizens Bear the Brunt

[marmar]

(The Progressive) In the 1930’s, Mississippi, struggling with widespread illiteracy and disease and an under-developed economy heavily dependent on subsistence-level agricultural jobs, implemented a set of incentives including tax breaks and subsidies to lure Northern manufacturers to the state. It worked, although at the expense of unionized Northern jobs, and soon other Southern states followed Mississippi’s “Balance Agriculture with Industry” example. As Joe Atkins explains in his fine book, Covering for the Bosses, this touched off what has become an ever-escalating race to the bottom on corporate taxes, with industry and corporations benefitting from an ever-more hospitable “business climate,” while undermining conditions faced by the majority of citizens across all the states.

The South has continued to fuel this competition, throwing huge amounts of taxpayer dollars to entice corporations. It has had to, because while dirt-cheap wages and a fiercely anti-union environment once attracted a flood of “runaway shops” from the North, the South is now often abandoned by U.S. firms which find even lower wages, more repressive control over labor, and generous subsidies from Third World governments. As Mary Frederickson writes in her book Looking South, “New [U.S.] South industrialization presaged much of what we are witnessing in the Global South.”

This recent “offshoring” has left the South peppered with dying factory and textile-mill towns that have lost their main employers and face a grim economic future with few prospects of escaping pervasive poverty, Paul Theroux details in his new non-fiction account, The Deep South.

But vast publicly-funded incentives, coupled with continuing low wages, have helped the South win the siting of 13 foreign-owned auto-assembly plants. The latest is located in South Carolina, presided over by self-proclaimed “union buster” Nikky Haley. South Carolina has distributed incentives worth at least $208 million in public funding. Shackled by “right-to-work” laws which make sustaining unions nearly impossible, just 2.2 % of workers in South Carolina are union members. Similarly, the unionization rate is a mere 3.7% in Mississippi, and 1.9% in North Carolina (the very lowest of the 50 states). The increasing weight of the low wage South has served as what labor journalist Harold Meyerson described as “an anchor,” pulling down earnings for working families nationally. .................(more)

- See more at: http://progressive.org/news/2015/10/188370/us-south-wages-long-war-incentives-and-citizens-bear-brunt#sthash.mY2Ld05N.dpuf

[blogslut]

1. "Economic Development Corporations"

We have several of them here, in Texas and, IMHO, they and all their participants should be in jail for fraud.