"GOOD BUSINESS CLIMATES": THE SECOND WAR BETWEEN THE STATES
Watkins, Alfred J.
When journalists discuss the rise of the Sunbelt, they often invoke the metaphor of war. The editors of Business Week, for example, argue that growth in the Southern Rim and economic decline in...
...But by placing financial penalties on corporations that wish to relocate, local communities will be compensated for the costs imposed on them by corporations, and decisions to relocate will be based on a comparison of all costs (private and public) and all benefits associated with a move...
...49th in average old-age pensions ($54 per month...
...Apparently, Gastonia is not the only community in which the business leaders refuse to sully their low-wage reputation by accepting high-paying, unionized corporations...
...Finally, they would benefit workers in all the country's regions and end the rhetoric of regional confrontation...
...From society's perspective, this produces a misallocation of resources...
...In that document, Congress described the prominent features of the Southern economy and concluded that "in many ways the South has served as a colonial empire to other regions of the nation...
...Southerners were especially vocal in their attacks against federal legislation outlawing some of the worst labor abuses...
...Another research monograph, published in 1973 under the auspices of the University of South Carolina's Bureau of Business and Economic Research, compared Northeastern and Southern wage rates in the cotton textile and synthetic textile industries...
...They quote one rubber company executive who declared, "Productivity is just as good if not better in our Southern plant...
...the peaceful, self-contained attitude of the Southern states presents too striking a contrast with that of the convulsed, panic stricken, mob ridden states of the North not to attract attention...
...A 1951 landmark study, conducted by two Duke University economists, Calvin Hoover and B. U. Ratchford, entitled Economic Resources and Policies of the South, reported that...
...In the cotton textile industry, for example, Southern workers' average hourly total compensation 480 (wages plus fringe benefits) was $3.49 while Northern workers performing essentially the same tasks earned $5.55 per hour, or 59 percent more...
...However, the data do not support either of these arguments...
...But I believe the trigger for political change could be new economic activity...
...In 1928, a survey conducted by the Bureau of Labor Statistics reported that average actual weekly earnings (not average full-time earnings) were $10.98 in five Southern states and $17.45 in New England...
...Louis...
...This, he claimed, would ensure that the burden of Southern growth would not fall exclusively on the backs of Southern workers...
...Despite the state's low rating on these indices, then-Governor Briscoe told a reporter from the Wall Street Journal, "We've got to level off this state spending...
...Massachusetts, by comparison, set a legal limit of 48 working hours and prohibited night work for women...
...But who are the combatants...
...However, in 1977 the Department of Public Welfare did request that the legislature raise welfare payments by 40¢ per person per day...
...During the decades immediately following the Civil War, as labor troubles in the North boiled over into violent confrontations, Southerners were quick to advertise what they perceived as relative tranquillity in the South...
...Economist Lewis Mandell also referred to the higher productivity of Southern labor when he told an interviewer for Iron Age, "All other things being equal, you can get people [of equal productivity] to work for less money [in the South], or for the same amount of money, you can get better qualified employees...
...by the editor of the Southern Textile Bulletin...
...They also quote an official of a major electrical appliance manufacturing company who told them, "Although we originally had some doubts about labor productivity in the South, our experience has revealed a high efficiency of Southern labor...
...The relatively low incidence of union members has not only reduced the time lost due to strikes in the South, but it has also kept wages and fringe benefits below those received by Northern workers...
...In addition, every Southern state permitted night work for women, a 12-hour night shift, and child-labor laws only pertaining to children under the age of fourteen...
...Herbert J. Ranschburg, research director of the New York Citizens' Budget Commission, estimated in 1976 that welfare payments cost each Houstonian only $15.93 per year...
...Richard B. McKenzie, Restrictions on Business Mobility (Washington, D.C.: American Enterprise Institute, 1979), p. 45...
...He listed such "unpopular but necessary decisions" as the imposition of tuition at the City University, a 30 percent increase in transit fares, a 20 percent reduction in the city work force, a renewed emphasis on labor productivity coupled with wage freezes and wage deferrals, a cut in property taxes to lower land acquisition costs for the real estate industry, welfare reform, and tax reductions for business...
...One Northern textile executive (probably in the 1920s) remarked, As compared to New England and the Northeastern part of the country, the South has the advantage of longer hours of labor, lower wage scales, lower taxes, and legislation which gives a manufacturing plant a wider latitude than is usually possible in the North in the way of running overtime and at night...
...If concessions are not forthcoming, they threaten to close their factories in the North and to relocate in the Sunbelt...
...In every category of total compensation, Northern textile workers were paid more than their Southern counterparts...
...Evidence accumulated over the past 30 years indicates conclusively that Southern workers are no less productive than Northern workers...
...Arkansas 16.8 percent...
...Amendment of the National Labor Relations Act to require swift punishment and severe penalties for firms that violate NLRB rulings...
...Failure to act will lead not only to a decline in living standards and social services, but to an eventual destruction of democracy...
...Ever since the 1880s, when Henry Grady 476 and other proponents of the New South tried to convince corporate leaders that the South was a secure bastion of unfettered free enterprise and cheap labor, Southern officials have rarely deviated from their probusiness attitudes...
...The Emergency Financial Control Board was given the power to approve or veto items in the city budget, even after these expenditures had been passed by the City Council and signed by the Mayor...
...That's the way we got reforms in New York City's government...
...Mississippi's Senator Hubert D. Stephens argued that the proposed amendment was "part of a hellish scheme laid in foreign countries to destroy our government...
...You'd be amazed at how many companies just walk in my door looking for what we can offer...
...Similarly, public officials will have few resources to distribute if departing corporations erode the municipal tax base and banks refuse to purchase municipal bonds...
...Georgia's secretary of state declared that "it would destroy the home...
...Every few weeks another bond issue had to be sold...
...From Harris's perspective, the South's "good business climate" was tantamount to a declaration of war against labor standards in the North...
...Another study on business relocation noted: When responding to questions "on the record," businessmen tend to put wages and unions at the bottom of any list of reasons for moving south...
...However, if they are to succeed, these alternatives must focus on two fronts simultaneously...
...The Southern economy indeed has grown dramatically since the 1950s...
...Further, many business executives argue that unions tend to complicate the production process, slowing the decision-making process and causing management to retain a higher percentage of inefficient and lackadaisical workers...
...The South entered the Great Depression as little more than a domestic colony for Northern industrialists...
...Man for man, using the same ratio of economic resources and with equally good management, southern labor can produce approximately as efficiently as non-southern labor...
...During the 1920s the legally established limit on working hours was 55 hours in South Carolina, 60 hours in Georgia and North Carolina, and in Alabama no legal maximum had been established...
...What weapons do they employ...
...n the intervening years since those earlier studies were published, new manufacturing facilities have blossomed in the South while investment has lagged in the North...
...Eight years later, John Gunther characterized Texas as "New York's most valuable foreign possession...
...A substantial body of economic research shows that unions are responsible for wages being anywhere from 5 to 25 percent higher in unionized shops than in nonunionized shops...
...Houston and Atlanta, by comparison, more than doubled the U.S...
...This makes union organizing extremely difficult and, consequently, increases the percentage of the labor force that has no union affiliation...
...Louis, Newark, Chicago, Boston, Philadelphia, Pittsburgh, and New York metropolitan areas lagged behind the national average...
...According to figures released by the Texas Department of Public Welfare, in 1975 only 18 percent of the state's eligible families received any aid...
...They must be supplemented by financial penalties on corporate mobility and by greater public control over all corporate decisions...
...Texas 13 percent...
...Second, business leaders intervened actively and forcefully in the political and financial affairs of New York City...
...In view of corporate preconditions for reinvestment in the North and Rohatyn's veiled call for a bloodless corporate coup d'etat, it is essential to forge a series of alternative policies designed to rebuild the economic base in the North without sacrificing either democracy, labor standards, or social programs...
...That act was subsequently thrown out by the Supreme Court in a case brought...
...However, in the three decades since that congressional report was published, the Southern economy has changed dramatically...
...A massive effort by unions to organize both public- and private-sector employees in the South...
...In a 1949 report, entitled Why Industry Moves South, commissioned by the National Planning Association, Glenn McLaughlin and Stefan Robock had reached similar conclusions...
...Their opposition was based on the belief that...
...Virginia 13.8 percent...
...Because of these conditions in the South, corporate leaders believe they can use the rhetoric of regional confrontation against union militancy and public-sector generosity in the North...
...The correlation between union membership and economic growth has become especially strong in the past few years...
...High on the list of factors favoring this "good business climate" is the absence of unions...
...While 19 percent of all Texans were living in poverty in 1970, the governor's office estimated that 2.5 million Texans, or 21 percent of the state's population, live at or below the poverty level in 1975...
...The "good business climate" produced by these lenient and often unenforced labor laws succeeded in attracting some Northern industrialists...
...Figures released by the U.S...
...New York City's welfare budget, in comparison, amounted to $159 per capita, Chicago and Philadelphia residents paid $170 each, and in Detroit welfare spending totaled $222 per capita...
...Despite the headlines, the real war is not between regional public officials, chambers of commerce, or corporations...
...In 1877, for example, the Raleigh Observer (August 8, 1877) commented that...
...Because of the promise of more jobs, Felix Rohatyn, the head of New York's Municipal Assistance Corporation, believes that Northern workers will allow their political leaders to make the concessions that business demands...
...By keeping trade unions out, by undercutting security benefits, by imposing taxes excessively 482 on consumers and sparing business, by offering subsidies to new firms coming in, by tolerating long hours for women and children and shying away from reasonable minimum wage laws, a state or region can attract industries...
...In addition, it would prevent Southern labor from serving as unwitting accomplices to the destruction of Northern wage and benefit standards...
...He did not begrudge the South this advantage, nor did he object to that region's economic development and industrial modernization, even if it produced slow growth in New England...
...The old economic foundation of cotton, tobacco, textiles, and lumber was replaced by oil, aerospace, electronics, and agribusiness, and the South indeed has become one of the most rapidly growing, technologically sophisticated industrial centers in the nation...
...Northern manufacturers were quick to recognize the lower costs and higher profits available to them in the South...
...But, despite this economic transformation, many significant features of Southern society have not changed during the past century: • Southern workers are still the lowest paid in the nation...
...In my judgment this is a principle that is applicable to a vast array of national problems, for reasons not too dissimilar to the New York experience...
...While the rapid growth and economic transformation of the South has been a fairly recent phenomenon, the attempt to attract new investment with the siren call of a docile, low-wage labor force has been heard for at least a hundred years...
...Involved businessmen .. can have an impact at the grassroots level and provide its political leaders with a platform for action...
...One study completed in 1927 found that the average weekly full-time earnings in five Southern states was $12.94...
...Major job losses also occurred in Baltimore (12.7 percent), Philadelphia (12.1 percent), Washington, D.C...
...A South Carolina survey reported that the primary factor attracting firms to that state is the relatively weak position of the unions...
...But in order to achieve an economic renaissance, they argue that Northern labor must refrain from appealing for more federal aid or demanding that federal contracts be redirected to Northern factories...
...labor troubles practically unknown...
...From the corporate perspective, the South is the perfect arena in which to wage this struggle...
...Business Week corroborated this fact several years ago in an article aptly entitled "No Welcome Mat for Unions in the Sunbelt...
...Bill Clayton, speaker of the Texas House of Representatives, explained the legislature's reluctance to raise benefits by claiming that low benefits increase workers' incentives to take any job they are offered, no matter how low the pay...
...At a minimum this would require: • Repeal of Section 14B of the TaftHartley Act so that the open shop is banished from the nation...
...Why are they fighting...
...One site-selection consultant working with the Gastonia, North Carolina, Chamber of Commerce said, "You tell `em you've got a union, and boom—they'll flat run you out of town on the next plane...
...Kirkpatrick Sale, in a phrase reminiscent of 19th-century European balance-of-power politics, announced that in the recent "power shift" the "rimster cowboys" have wrested control of the nation from their arch foes, the Yankee Eastern establishment...
...Perhaps the most candid statement concerning the economic benefits of racial dissension was expressed in 1886 by John W. Dubose, an Alabama businessman...
...Let's face it...
...The investigators discovered large disparities in the total hourly compensation received by workers in the two regions...
...Immediately after World War I, textile manufacturing grew by leaps and bounds in the South as Northern capital took advantage of the large pools of cheap Southern labor...
...As for the cost-of-living argument, annual data published by the Bureau of Labor Statistics indicate that while the cost of living is indeed lower in the South, the wage-rate differentials exceed the cost-of-living disparities...
...Off the record," however, they often admit that unions or "better labor management relations" (a euphemism for "getting out from under union domination") is a prime reason for their decision to move...
...Louisiana 16.3 percent...
...Both men's assertions were buttressed by a 1947 congressional report entitled The Agricultural and Economic Problems of the South...
...By 1927, 62 percent of the nation's cotton mills, employing 60 percent of all textile workers and contributing 58 percent of the value added in that industry, were located in the South...
...not only have smaller companies by the hundreds escaped unions by moving South, but major companies in the rubber, auto, and electrical equipment industries, among others, also have been spotting plants outside the Northern strongholds...
...Despite these costs, present state and national statutes do not force corporations to include them in their balance sheet...
...Despite these pessimistic trends, many businessmen and politicians believe the decline in most Northern cities can be reversed...
...National welfare reform coupled with substantial benefit improvements for all recipients...
...average employment growth rate...
...Not surprisingly, businessmen have responded eagerly to the South's "good business climate...
...high and uniform minimum wage and industry-wide collective bargaining will greatly increase the difficulty of closing the present enormous gap between levels of living in the South and in other parts of the country...
...It excites a sentiment of sympathy and equality on their part with the classes above them...
...Tennessee 18.7 percent...
...Quoted in Michael J. McManus and Frank A. Weill, "No One Is in Charge," Empire State Report, October-November 1976, p. 336.] hree years later, in a keynote address in Aultin, Texas, Rohatyn spelled out in greater detail the precise concessions that were 483 needed to restore investor confidence in New York City...
...The number of jobs in Detroit declined by 18.5 percent and in St...
...It finally consented to a 10¢ increase, the first since 1969...
...As a result, decisions to relocate are made on the basis of private costs, not on the basis of the full social cost...
...In 1916, Congress passed the Keating-Owen Child Labor Act, which excluded from interstate commerce all goods manufactured by children under fourteen...
...The issue turns on the question whether these differentials are the inevitable price the South must pay to secure the extra regional capital needed to increase the productivity of the Southern economy...
...According to a Wall Street Journal article, entitled "Sick Cities: Many Municipalities Lag Behind the Rest of the Nation in Recovering From Economic Downturn," the principal reason for shorter layoffs in the South is that region's higher labor productivity...
...Mississippi 12.0 percent...
...Those who don't can get a better deal in New York or St...
...The South is fortunate in having a supply of native American labor which is still satisfied to work at a low wage...
...Thus, for Northern workers, all the journalistic hype concerning the "rise of the Sunbelt" and the "second war between the states" boils down to one ominous message: Accept fewer social benefits and lower wages, forsake the foolishness of union militancy—in short, emulate your Southern brethren and establish "a good business climate" in the Northeast—and you, too, can live in a rapidly growing, "prosperous" region...
...They also will find a political environment that inhibits union organizers and enhances the region's "good business climate...
...What we are creating is a way to give politicians the excuse to do what they know ought to be done anyway...
...In 1894, the Atlanta Constitution conveniently ignored the Populist frenzy that was then sweeping the South...
...Testimony by J. V. Van Sickle, concerning the Fair Labor Standards Act of 1938, "Study of the Agricultural and Economic Problems of the Cotton Belt," Hearings Before the Special Subcommittee on Cotton of the Committee on Agriculture, 80th Cong., 1st Sess., July 7 and July 8 1947, p. 688.] Apart from the issue of whether lower wages were essential for attracting industry, Southern businessmen were quick to add that many Southerners were so destitute that almost any wage, no matter how low, would be eagerly accepted...
...In the South, the percentages were: Alabama 19.1 percent...
...The corporations are fighting for the restoration of a "good business climate" in the Northeast—a code word for less union militancy, the "right" to pay lower wages, and a political environment that views most taxation, social services, and corporate regulations as unwarranted intrusions on the rights of private property...
...Thus, in the South, such groups as farm workers and public-sector employees are forbidden to bargain collectively, and welfare benefits and other publicly supported social services are kept below the poverty line...
...in manufacturing, the available evidence indicates that low labor productivity is not an innate characteristic of southern labor...
...This belief, he declared, "help[ed] to create a public climate which permit[ted] political leaders to make unpopular decisions without committing HaraKiri...
...The direction and philosophy of a large unit of government was fundamentally and permanently changed as a result of the involvement, some would say intrusion, of the private sector in government...
...We will have an entity which could say to four Governors, "We have $2 billion to invest which we might make...
...More than any other region, it offers a vivid illustration of the supposed benefits associated with a "good business climate...
...Data published by the Bureau of Labor Statistics suggest that Northern businessmen have not been making idle threats...
...Instead, the newspaper remarked (August 26,1894), "how comforting, sustaining and inspiring is the 477 reflection that while these industrial and social storms have been raging around us, we in the South have been resting in peace, in safety, and in comparative comfort...
...In New England, the corresponding figure was $19.12, or 48 percent higher...
...These facts, figures, and political attitudes have not gone unnoticed by the business community...
...His analysis recognized that to a certain extent surplus labor resulting from displaced agricultural workers gave the South a natural cost advantage...
...If so, "a change in political climate is needed to cope with political paralysis...
...48th in aid to families with dependent children...
...He recommended that Northern businessmen and politicians retaliate by promoting national legislation outlawing some of the most exploitative Southern labor policies...
...In that article, the author noted...
...In short, the absence of unions and the cultural bias against them in the South has given Southern states a competitive advantage...
...In the light of this martial rhetoric, it would appear that the Northeast and the Sunbelt are engaged in a titanic struggle...
...n a 1952 study entitled The Economics of New England, Harvard economist Seymour E. Harris blamed Southern politicians for many of the economic problems plaguing the New England economy...
...Between 1970 and 1974, the number of jobs in the United States increased by 9.3 percent...
...The Municipal Assistance Corporation was given control over $1.25 billion of city tax revenues to repay city bondholders...
...South Carolina 8 percent...
...As a result, Northern businessmen now raise the specter of competition from lower paid, nonunionized Southern labor to demand that their workers accept lower wages and fewer fringe benefits...
...In several instances, these firms have been literally run out of town with all the ferocity usually reserved for union organizers...
...In his 1979 American Enterprise Study, Restrictions on Business Mobility, on page 46, economist Richard B. McKenzie argues forcefully that low unionization is primarily responsible for lower wage rates in the South...
...Welch failed to mention that Houston's "attractiveness" is not based on high wages but on a niggardly welfare system that, in the words of the Wall Street Journal, "is notoriously tightfisted...
...Consequently, Southern workers have the use of the most modern, up-to-date equipment and production techniques while Northern workers are hampered by outmoded, less productive facilities...
...The objection is rather against practices which give the South an unfair advantage by depressing the standard of living of workers through legislation or lack of it...
...The higher productivity of Southern labor becomes especially noticeable during recessions, when firms schedule production cutbacks...
...Massachusetts, which had previously been the leading textile state, slipped to second place, behind North Carolina...
...The white laboring classes," he asserted, "are separated from the Negroes, working all day side by side with them, by an innate consciousness of race superiortiy...
...Workers lose their jobs, unemployment and welfare payments increase, and tax collections decline...
...Compounding the problem, Texas ranks 49th in the level of unemployment compensation payments ($63 per week...
...Now corporate relocations place heavy financial burdens on the communities they leave...
...All of this adds to the costs of production and makes successful competition and a firm's long-run survival uncertain...
...At present, corporations can wrest concessions from labor and local public officials because ultimately business controls the allocation of resources, the creation of jobs, and the size of the tax base...
...North Carolina, where industrial jobs that 479 offer low wages are mushrooming, ranked last among the 50 states in 1974, with only 6.9% of its workforce unionized...
...But first we need to make the following changes in the tax structure or changes are needed in union work rules...
...Instead, they demand that Northern workers emulate their Southern brethren by accepting lower wages, fewer fringe benefits, cuts in social services, reductions in business taxes, and increased local government subsidies to business...
...Instead, Harris directed his attack against those Southern policies and political attitudes that today are considered part and parcel of a "good business climate...
...42nd in per capita operating expenditures for juvenile correction facilities...
...Southern workers are among the least unionized in the nation, and the closed shop is outlawed almost universally throughout the South...
...The average increase found by various studies is about 10 percent...
...According to Rohatyn, two preliminary steps were necessary before these austerity measures could be imposed on New York City's working class...
...Manufacturers shut down their least productive facilities first and concentrate the remaining output in their high-productivity, low unit-cost plants...
...According to Rohatyn, business control over the city's purse strings was merely a prelude to more direct involvement in the city's political affairs: The influence that the private members of NAC and the EFCB exerted was on the political process itself...
...Until this power is removed from corporate boardrooms and vested in public officials who must answer to the electorate, we will witness additional corporate "intrusions" into the affairs of government and the imposition of "good business climates" in all regions...
...Instead, the war pits corporations and their political allies against unions, welfare recipients, the unemployed, and publicly financed socialservice agencies...
...It would destroy a civilization based on the Bible...
...Despite a $2 billion surplus in the state treasury, the legislature found that request exorbitant...
...More important, while the cost-ofliving differentials between the two regions have been narrowing, wage disparities have increased...
...Southern workers still receive fewer fringe benefits and social services than their counterparts in other regions...
...FIRST, wages, fringe benefits, and social services throughout the nation, and especially in the South, must be raised so that corporations no longer have an incentive to relocate...
...Today the South has grown dramatically and replaced its colonial economy with modern, high-technology industries, but Southern businessmen and politicians still advertise the low wages, absence of unions, strong work ethic, and favorable political treatment that corporations can expect to find...
...First, labor leaders and politicians had to believe that without austerity, business would never return and, in all probability, would continue to leave at an accelerating rate...
...In contrast, industry has been moving out of states with high rates of unionization: Michigan (38.4%), New York (38%), and Pennsylvania (37.5...
...Quoted in Broadus Mitchell, The Industrial Revolution (Baltimore: Johns Hopkins University Press, 1930), p. 38.] However, low wages and long hours were all that these "fortunate" Southerners received...
...During 1923, for example, the number of spindles in the South increased by 518,000, while they declined by 107,000 in New England and by 35,000 in Massachusetts alone...
...Each required concessions...
...Business Week, May 17, 1976.] Not only is there no welcome mat for unions in the Sunbelt, there also is none for Northern firms that want to move South while retaining their Northern wage scales and union affiliation...
...During that same period, the number of people at work in cities rated by the Fantus Corporation as having a bad business climate dropped precipitously...
...In the synthetic textile industry, the differential in total conpensation between the two regions was much lower, yet the pattern was the same...
...According to McKenzie: Many businesses understandably want to move away from unions...
...Louis by 18.3 percent...
...Any time you get support payments to a high level," he declared, "you discourage incentives...
...They also would remove the necessity for the poor and unemployed to accept any job they are offered, no matter how low the wage...
...The corporate arsenal includes such weapons as threats of plant closings, the ability to wreak economic havoc on local economies, and a propaganda campaign suggesting that, in some form or other, we are all in the midst of a struggle for regional power...
...My objection is not to subsidies in the South...
...Money invested here is as safe from the rude hand of mob violence as it is in the best United States bond...
...SECOND, these policies alone, however, will 484 not be sufficient...
...North Carolina 6.9 percent...
...the reason a lot of companies come here is because of the labor atmosphere...
...Racial animosity, which inhibited a unified labor movement from opposing Southern capitalism, was often held out as an additional inducement for Northern manufacturers...
...In 1978, the Wall Street Journal (February 10), in a front-page story— headlined "Yankee Go HomeT'—reported that "fearful of unions and competition for local labor, community leaders in many areas have quietly been spurning Northern companies eager to move operations into the Sunbelt...
...In 1928, the Chamber of Commerce in Charlotte, North Carolina, described that city's labor force as "the finest in the country today, native white, sober, industrious...
...Maurice Fulton, chairman of the Fantus Corporation, agreed with the Wall Street Journal's assessment: "We've had a good deal of experience representing companies that pay a national wage," he explained, "and it has been difficult to find [Southern] towns that would accept high wage rates or unions...
...After all, unions will have little bargaining power if they have no one with whom to bargain...
...Tenant farming and sharecropping, so pervasive during the 1920s and 1930s, have all but disappeared...
...Donovan Dennis, a vice-president of the Fantus Corporation, a plant-relocation consulting firm, agrees that unionization is a major consideration when firms decide to relocate: "Labor costs are the big thing, far and away...
...More ominously, the article went on to report that...
...10.2 percent), and Chicago (8.4 percent...
...In discussing the political leverage that a federally financed Urban Bank would give the business community Rohatyn declared: I can't tell you how convinced I am that many of our problems stem from structural weaknesses in our political system...
...Florida 12.5 percent...
...Similar disparities existed in working conditions and labor laws...
...While Philip Coyle, the president of the Gastonia Chamber of Commerce, denied the allegation, calling it "hogwash," he went on to explain how important a nonunion atmosphere is to the economic health of Gastonia: "Some of these companies damn near went out of business in high union areas...
...Unfortunately, Harris's recommendations were not followed...
...Department of Health, Education, and Welfare indicate that only Alabama, South Carolina, and Mississippi offer more "incentives" and pay lower welfare benefits than Texas...
...A constitutional 478 amendment that had the same purpose as the Keating-Owen Act was passed by Congress in 1924 but was never ratified due to the bitter opposition of Southern politicians...
...This last point was underscored by Louis Welch, a former mayor and current president of the Houston Chamber of Commerce, who recently remarked that "Houston is an attractive city for people who want to work...
...When the Fair Labor Standards Act was passed by Congress in 1938, Southerners led a bitter fight against that legislation and later called for its repeal...
...By moving South, businessmen can certainly escape "union domination...
...Georgia 14.5 percent...
...Most important, they would reduce the incentive for corporations to relocate to low-wage, nonunion regions...
...46th in annual expenditures per elementary and secondary student...
...The incentive is the only way we have to break the poverty cycle...
...Southern agriculture was liberated from the ruinous effects of the croplien system and monoculture...
...By casting the conflict in terms of regional competition, corporate executives hope to convince public officials and the working class that offering the corporations greater concessions will either attract new plants and industries or dissuade the ones already there from locating elsewhere...
...A guaranteed annual income that ensures all families an adequate respectable standard of living...
...Between 1925 and 1927, New England lost 30 cotton mills, 9,312 textile jobs, and its share of value added declined by 2.4 percent...
...This sentiment dignifies the character of white labor...
...Texas does not only rank low in welfare payments, it also ranks near the bottom on most social-welfare indicators...
...In fact, recent evidence suggests that today's Southern labor productivity may exceed that of Northern workers...
...Between 1960 and 1970, a period of unprecedented prospertiy and economic growth, employment increases in the Baltimore, Cincinnati, Detroit, Milwaukee, Cleveland, St...
...Except for Louisiana, every state in the South has enacted some form of "right to work" legislation outlawing the closed shop...
...In 1938, for example, President Roosevelt, noting its widespread poverty, disease, illiteracy, and lack of industry, described the South as "the nation's number one economic problem...
...Otherwise, industry will locate elsewhere and you will continue to lose your jobs...
...Cloth that cost 34 cents per pound to manufacture in New England could be produced for 22 cents in Southern factories...
...From an address before the Symposium on Government and Business, in the Lyndon Baines Johnson Library, University of Texas, at Austin, March 1, 1979.] Rohatyn concluded by asserting that democracy may "be a luxury that requires an abundance of resources which may be on the point of running out...
...Nine of 10 times you can hang it on labor costs and unionization...
...On an average, welfare payments total $1.00 per day per person and the annual income of a Texas family subsisting only on welfare and Food Stamps fell 40 percent below the federal poverty level for a nonfarm family of four...
...These policies would have several beneficial effects for the working class and the unemployed...
...They warn against the outbreak of a "bitter and divisive struggle for income, jobs, people, and capital...
...Because of the possibility of economic activity, the Governors will accept political change...
...Data from the 1970 Census place Texas among the nation's 10 poorest states in terms of the proportion of its population living in poverty...
...Clearly, despite their equal or higher productivity, Southerners receive a lower real wage because the political and business leaders in their region equate the "work ethic" and lower wages with economic salvation and prosperity—and back up their moral suasion with legislation that inhibits 481 union organizers...
...As of 1974, the Bureau of Labor Statistics reported that 26.2 percent of all employees in the United States were union members...
...The Fantus Corporation recently ranked the "business climate" in Texas tops in the nation...
...The editors of Business Week, for example, argue that growth in the Southern Rim and economic decline in the Northeast is a prelude to "a second war between the states...
...The United States today in many ways is similar to New York City in 1975...
...Although the differentials in the hourly wages was "only" 52 percent in favor of Northeastern workers, leave time (except sick leave), compensation, and unemployment benefits were approximately 300 percent higher in Northern factories, while life insurance and health benefits were 90 percent greater...
...During the last recgssion, this practice resulted in earlier and longer closings in the North and shorter layoffs in the South...
...Often these disparities are justified by claims that Southern workers are less productive than their Northern counterparts or that the cost of living is lower in the South...
Vol. 27 • September 1980 • No. 4
