Article Title: How the American South Drives the Low-Wage Economy:
Author Name: Harold Myerson
Published Date: In the summer 2015
The American south is commonly known as Southern United States or simply the South. It constitutes a large region in the South central (united State) and Southeastern. The south developed its culture own, literature, customs, varied cuisines and musical styles. After civil war, South was largely distressed or devastated in term of its infrastructure, economy and population. It shifted from tobacco and cotton to corn, soybeans, and other foods.
In 1980-1990, this growth accelerated, and many large (urban) areas rose in Georgia, Texas and Florida. The rapid expansion in the industries such as, telecommunications, technology, textiles and banking and became the large state. By 2000, American South was leading nation in the population growth.
In this article, the author described how the South drives low wage economy. In the past, the conflict that rose between south and north that led to civil war. This conflict had left its affects; still the world is facing its after effects. The current drive of South is to impose its opposition on rest of nation to minority rights and workers by the power of a Southern zed Republican Party. The leaders of Southern are doing efforts to change the labor system.
Due to recent action of Northeastern, West Coast, cities and states protect the minority rights and to rise the standard of labor, the echoes of the pre civil war exist there that caused frustrations. At this response, many Northerners left due to failure of federal government to promote and defend a free and liberal labor system, frustration that have ironically effects, guided them to find out the Republican Party.
The resilience of the south and similarities between the new and old order of south are most surprising. Until the world, disenthrall itself from the sanitized or sterile understanding of the Old South. It is about 100 years ago, when South became less productive and subject to racist falsifications in long run, it had shaped. The civil war shaped the labor system of South and culture. This war has deep roots in the culture of South.
The exceptionalism has extended their views about South, they said that American south is a place in or more precisely, it is purported or supposed its absence from the development or growth of modern economy of America. The system in South is very old they did not do any efforts to change the system. Even the political environment of South is not very strong. The labor system is weak.
The factories and finance rose only in the north of Mason– Dixon Line. The railroads spanned in the Northern states, and the South was considered as an island. Only a few banks are in south, no proper rails system and the no of factories are very low in south, it shows that south largely detached or separate from the industrial capitalism’s climb or rise. A significant change is seemed in the literature or history of South due to a wave of revisionist histories that clearly or persuasively dispels its image.
It displays a good sign for the future of south. It can improve the banks, trains and can increase the number of factories in south. As, south was short in banks, trains and factories but this wave leave its effect; south is started the textile mills such as Massachusetts and Manchester, England; it shows the industrial ear of South, and the start of the development. With this industrial age south also made its first rails to transfer goods from one place to other.
Theses pioneers industries also became the key of modern finance and such as, Brown Brothers in New York and Baring Brothers in Britain. They won many prizes from the Harvard University because they base the new and modern finance. They emerge the finance 19th century and financial capitalism. It was a good start of South and they started to show their interest to change its economy. After the industrial age, they had specialized in the cotton. This increased the demand of banks. It was a good time for business people.
The businesses started to do their transaction through banks and it spread the business of banks. Before civil war, the South has low or no wage, faster the first global chain of production. Today, aerospace and the auto manufacturers of East Asia and Europe open the low wage (assembly) plants in Alabama, Tennessee, Mississippi, and South Carolina; the south assumed to play its comparable and key role one again.
Today, South shares its more features with the antebellum ancestor as it did in the past years. Now Southern is trying to expand its business, the reaming powerful alliance of South also doing this. The alliance of South and South itself are building relation with the non-southerners to expand and increase the business activities. The low wage system of South can provide the cost benefits to the other countries who wanted to start their business in south.
When the foreign investment will increase in South, it will increase the employment opportunity in South.
However, the American south doing its efforts to change the policies that related to low wage system because low wage is not good for the development of South. It can give the benefits to the foreign investors but do the employees of the South. South is now doing efforts to increase its value across the America, because America is an advancing country and relation or strong bond with America can give the competitive benefits to the South.
The Southern antipathy of counterparts had adapted by Northern Republicans to support and unions for the voter suppression, as this response the earning of workers fall in the north at the level of South. Against this low wage, a sectional backlash rose and emerged towards the norms of Southern, it again emerged two nations in one.
America is getting benefits from the low labor of china. The off shoring of America gives it many advantages. The American companies assembled their products in China and sold these products across the world at high costs. Due to low labor costs and manufacturing cost in China, America has increased its manufacturing again.
The wages differences between the china and America reduced and in 2000, it was just 23 %. This figure increased in 2010 and became 31 %, it is estimated that at the end of 2015 this figure will be 44 %. The worker that were worked in the factory of china compared to the workers that worked in the factory of America, in 2000, the wage difference was 36 %, in 2010 this figure was rose and became 48 % and at the end of 2015 it is estimated it will be 69 %.
America is continuously taking the advantage from the labor market of China. The economy of U.S grows in a way that people do not believe on it.
The economy of U.S had flexed as said by the author, the manufacturing has to continue in South, the wage of workers has grown in the south as well. It was reported in 2013, in Wall Street Journal that the job fell by 33 % in the Midwest, on the other hand in south it increased by 52 5. There was 196 % increased in the jobs of Alabama, 121 % in South Caroline and 103 % in Tennessee. There was a decline of 36 % in the jobs of Ohio, 43 % in Wisconsin, and 49 % in Michigan.
In south, the auto manufacturing companies were opened, but the earning of autoworkers fell. The autoworkers start their business in Alabama, this state has high growth rate as compare to other states but its earnings decline by 24 %, and those were in Mississippi had experienced a decline of 13.6 %. In 2013, the industries were recovering and the South was booming.
The industries started new hire. The new hired were paid 24 % that was lower than all the autoworkers in the South Carolina and 17 % lower in the Alabama.
What are the reasons that wages were continuously falling despite of newer hire? It was due the reasons that the country has lack of institutions and legislation that worked according to the interest of workers and protected their interest. In the five states, there was no minimum wage law. All the industries set their own wages. There was no control of government and no one listen the voice of workers due to the weak political system.
These five states were Alabama, Mississippi, Louisiana, South Carolina and Tennessee.
In the recent year, many factories have arisen in south that belong to Asia and European firms’ these firms in their home countries pay high wages to the workers and are harmoniously unionized.
American south is now focusing to grow its economy. However, for the America the South is became an alternative to china, America get competitive advantage and economies of scale by manufacturing in china, now it had found another state that can make gods in low production costs that is American south.
The general Electric in 2012, re-shored the production of refrigerators of its company, water heaters from china and Mexico by doubling the workforce in this process. The staring pay they were offering was 13.50 dollar; it was 8 dollar less than the seniors of the company were received.
In 21th century, the American south has become the lower wage country at global production level, as just it was before the time of civil war.
In south, the industrial revolution was first emerged by the cotton mills of Manchester. In the south two economies were rose hand-by-hand “industrial and slave”. It emerged the technological advancement in the South.
The economy of South was not in good position; the government should take the effective measures to improve and flourish the economy of south. For this purpose, government should make new policies that are related to labor system. Implement the minimum wage law so that an improvement in thy economy of South can be seen in future. (Meyerson, 2015)
Meyerson, H. (2015). How the American South Drives the Low-Wage Economy. Retrieved December 8 , 2015, from http://prospect.org/article/how-american-south-drives-low-wage-economy