Anti-worker policies, Crony Capitalism, and Privatization Keep the South locked out of Shared Prosperity

How anti-worker policies, crony capitalism, and privatization keep the South locked out of shared prosperity: Rooted in Racism and Economic Exploitation: Part Five, Economic Policy Institute

EPI’s Nina Mast covers how Southern lawmakers blocked shared prosperity by neglecting basic worker protections and disinvesting in social safety net programs while offering hefty subsidies to corporations, privatizing public goods, and giving the wealthy big tax breaks.

Summary: Southern lawmakers have neglected basic worker protections and disinvested in social safety net programs while offering hefty subsidies to corporations, privatizing public goods, and giving the wealthy big tax breaks.  

Some detail to a much larger report. If you have some time, this report is worthy of a read. Note the comparison of the District of Columbia to various states. D.C. lowest of income pays 4.8% while the top 1% in income pays more than twice of the lowest in income. In Florida, the percentage paid out by the lowest 20% in income is ~5 times (in percentage) what the top 1% in income pays.

The chart below says more than my words.

ITEP-Who-Pays, “A Distributional Analysis of the Tax Systems in All 50 States“

• Many states across the South use an economic development model that prioritizes the wealthy and corporations at the expense of workers and their families and fosters precarity to maintain racial and class-based hierarchies.

• Southern families face high rates of economic insecurity, and underinvestment in health, child care, and transportation infrastructure blocks working families from full participation in the economy.

• Southern states have some of the weakest wage theft and paid sick leave laws in the country and are less likely than other states to enforce laws that do exist to protect workers.

• The racist attitudes that inspired discriminatory social welfare programs 90 years ago persist today. These dynamics are especially acute in the South, where the programs are less generous and reach fewer eligible families.

• Many Southern lawmakers have repeatedly rejected efforts to expand Medicaid in their states, which has led to thousands of premature deaths and other health and economic consequences. And Southern states account for six of the 10 states nationwide with the highest uninsured rates.

• In 11 Southern states, the poorest 20% of residents pay more in sales taxes alone than the top 1% of residents pay in all state and local taxes combined. 

• High poverty rates, regressive tax structures, and a failure to tax corporate income means that Southern states collect much less revenue than other states and are highly dependent on the federal government.

• In recent years, Southern states have given away billions of dollars in public revenue in the form of direct subsidies and tax breaks to corporations for projects that often do not benefit communities.

It Matters, why?

Policies in the South fail to raise adequate revenue to pay for public goods and services. Politicians are selling these harmful policies as “the cure.” Such creates a vicious cycle keeping millions of Southerners in a state of poverty and out of the benefits from economic growth.

A Fix for the Issues

The Southern economic development model is the result of policy choices that can and must be undone for the South to thrive. The racism and anti-worker sentiments that have influenced economic policy making in the South for generations must be uprooted and replaced by new policies centered on empowering and investing in workers, families, and communities.