Skip to main content

Income Stagnation in the South

Income Stagnation in the South

The New York Times recently explored anew an issue that we at MDC have long been concerned about, particularly in the South: income stagnation. “For the first time since the Great Depression,” David Leonhardt, The Times’  Washington bureau chief, wrote, “median family income has fallen substantially over an entire decade. Income grew slowly through most of the last decade, except at the top of the distribution, before falling sharply when the financial crisis began.”

Even as the South has diversified its job base and added population over the last 30 years, median income has been just as flat—only lower (see charts below). The region’s median income level has been consistently below the national average, hovering in the $40,000 range from the 1970s through the 1990s, while reflecting most of the nation’s slight ups and significant downs. The factors Leonhardt identifies as contributors to the stagnation are ones identified over the years in our State of the South reports—the digital revolution (automation), globalization, and educational deficits.

There’s not much state and regional leaders can do about automation and globalization. Lower paid workers in developing countries and machines that do rote jobs have cost the South tens of thousands of manufacturing positions in textiles, furniture, and other small-scale manufacturing. The jobs that Southerners relied on for decades are not going to come back—and indeed we don’t want to return to an era of low wages and even harsher working conditions.

Which brings us to education. Over the long run, what the South and the nation need to raise families’ median incomes and build a stronger economy are skilled jobs that pay more. But those jobs require education and training. As of 2009, the U.S. ranked 11th in the world in percentage of young adults with a postsecondary degree among industrialized nations, with 40.4 percent, while Southern states (except Virginia) lagged well behind that (Louisiana was tied with Greece at 28.1 percent, and Arkansas lagged all Southern states at 25.9 percent, just ahead of Portugal).  

That’s why MDC is focused on programs such as The Benefit Bank® to help people cope in the short term, and creating community-based coalitions such as in the Partners for Postsecondary Success program to increase the number of students and adults receiving postsecondary degrees and credentials in the long-term. Only with a better trained workforce, as well as the creativity of entrepreneurism, will the South and the nation be able to attract the kinds of businesses, create the kinds of jobs, and build the kind of economies that will end income stagnation. As Leonhardt notes: “If educational attainment rises, more people will be able to get jobs that benefit from technology and global trade, rather than suffer from it.”

By Richard Hart and Max Rose

Median Income in the South (In 2011 Dollars)

Source: U.S. Census Bureau, Current Population Survey, Historical Tables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: U.S. Census Bureau, Current Population Survey, Historical Tables