The Climate for Workers in the U.S.: Summary of a Study by the Southern Labor Institute. A Special Project of the Southern Regional Council

By Ray Marshall

Vol. 8, No. 4, 1986, pp. 1-2

The challenge facing the South is to create jobs with the income and benefits needed to bring the region's workers above the poverty level - not just new jobs, but jobs that will significantly improve the standard of living for people who work full-time, year-round.

"THE 'BUSINESS climate' and 'ideal places to live' are regularly assessed, but there have rarely been indexes of good places to work. Indeed, the criteria used by most business climate reports assume that low wages, limited unemployment compensation and worker protection, and weak unions, are good


Page 2

for business. This is a strange assumption for people who also profess to believe that people are our most important asset. The Climate for Workers report demonstrates the error in this traditional assumption.

"To attract business by maintaining and encouraging low wages and weak worker protection was always shortsighted, but in an internationalized information world it is ludicrous. American companies cannot compete in the international arena on the basis of low wages. Workers in many developing countries earn less than one-fifth as much as their American counterparts. Competitiveness therefore requires greater attention to productivity, technological innovation, and world class management systems, and these factors are not likely to be highly correlated with low wages and weak worker protections. However, international competitiveness and high and rising standards of living are likely to be highly correlated with a high quality workforce and strong worker development programs. The Climate for Workers is therefore a good indicator of those places that are likely to have long-run development potential. Fortunately, far-sighted leader in these states realize the connection between economic and human resource development and have made strong efforts to improve their education systems. These leaders recognize the futility of the all-too-frequent strategy of attempting to compete by depressing wages. Attention must be focused on other aspects of human resource development, that also are important in improving workers' welfare and therefore the quality of life in any state.

"This report puts job growth in the Southeast into proper perspective and evaluates the overall benefits of work. The climate for workers in the sunny South is rather chilly. Those who believe that 'the Southern economy no longer exists' or that 'the South has thrown off its history,' should consider the findings of The Climate for Workers.

"As with any new indexing undertaking, The Climate for Workers has technical weaknesses. However, its thrust is sound and it should initiate discussion to improve technical quality in future reports."

Dr. Ray Marshall, former U. S. Secretary of Labor, holds the Audre and Bernard Rapoport Chair in Economics and Public Affairs at the LBJ School of Public Affairs, University of Texas at Austin; is Board Chairman of the Southern Labor Institute; and Vice President of the Southern Regional Council.