The Climate for Workers: Where Does the South Stand?By Kenny Johnson and Marilyn Scurlock
Vol. 8, No. 4, 1986, pp. 3-15
We believe the true test of economic conditions is how working people--the vast majority of citizens--fare in these times of economic change. This report examines how the economic climates in the states affect most workers.
Although it experienced extraordinary job growth during the past ten years, the Southeast remains the least favorable region of the nation when considered from the perspective of working people and their families. More than in any other region, workers in the twelve states of the Southeast fail to enjoy the full fruits of their labors.
During a major restructuring away from traditional manufacturing jobs (furniture, textiles, apparel) and toward service jobs (especially business and health services), manufacturing growth where it does occur is generally in machinery, electronic equipment, and related fields. Yet in the Southeast, state governments and chambers of commerce have clung to the refrain of cheap land and cheap labor that produced the region's heavy dependence on-low wage, traditional manufacturing jobs and the largest proportion of working poor in the country. Even the new service jobs in the region have wages at the low end of the pay scale. In the final analysis it must be realized that recent and phenomenal job growth in the Southeast has occurred in large part at the bottom end of the wage scale, and has not improved significantly the conditions and prospects for the wage earners of the region. As the Southeast's economy follows the national trend of fewer manufacturing and more service sector jobs, the region's employed and unemployed workers are unlikely to see much change in their personal conditions.
Southern states fill the bottom rungs of nearly all of the more than two dozen indicators considered in this study of the nation's labor climate. This situation is graphically depicted in the map on the next page. The top five states, meanwhile, are Massachusetts, Connecticut, Minnesota, California, and New York.1
The Southeast's extraordinary growth in jobs during the past ten years has been accompanied by the least change in personal income of any U.S. region. While four Southeastern states rank among the top nine in job growth for this ten year period, eight Southeastern states fall among the bottom eleven in personal income growth during the same years. Table VI shows the correlation in each geographic region between job growth, income and wage growth.
More and more people are working full-time year-round yet have incomes below the poverty level. These are the working poor. Working people are much more likely to be poor in the Southeast than in any other U.S. region. Of the ten worst states, eight are in the Southeast--ranging from Tennessee, with 8.2 percent of its workers below poverty level, to Mississippi at 12.7 percent (the highest proportion in the nation).
Similarly, Southeastern states today have the lowest per capita incomes in the U.S., and nine of the twelve Southeastern states are among the bottom thirteen in manufacturing wages, averaging less than $8 per hour. The range in these states extends from $7.97 in Alabama to the national low of $6.95 per hour in Mississippi.
The Southeast region can rank high in job growth, and yet rank low in wages and income, because in eight of the Southeastern states, more than 40 percent of the manufacturing jobs are in low-wage industries (those with national average wages of less than $8 per hour). These include lumber and wood products, furniture and fixtures, food and related products, textiles and apparel, rubber and plastics, leather and tanning, and miscellaneous manufacturing jobs.
Not surprisingly, the eight states with the least worker protection are in the Southeast. When it comes to state statutes and labor department policies governing the workplace, protecting workers' rights and safety, and providing compensation for disability and unemployment, the South falls considerably below all other U.S. regions. At the bottom of the benefit scale, five of the six states that pay the least for permanent total disability--under $200 per week--are in the Southeast. In the nation's twelve worst states, the weekly unemployment benefit is $140 or less. Eight of these twelve are in the Southeast. At the bottom in the South and in the country is Mississippi ($105).
Until recently, blacks and women have been
Page 4excluded from traditionally white male occupations: officials/administrators, professionals, technicians, and craft workers. Southeastern states rank on the bottom in the percent of working blacks and women employed in these jobs.
Findings related to the quality of life in the states also echo some historically familiar refrains.
* The Northeastern states report the lowest rates of poverty, ranging from 8 percent in Connecticut to 13 percent in New York.
* The Southeast remains the nation's poorest region and Mississippi (with 24 percent of its population impoverished) ranks at the bottom of the South.
* Blacks are most likely to be poor in the Southeast. The nine states with the highest proportions of black poor are in the Southeast. Rates of poverty for blacks in the South range from Virginia's 25 percent to Mississippi's 44 percent (highest in the nation).
* A baby is less likely to survive its first year of life in the Southeast. The two states with the worst infant mortality rates--over fifteen deaths for every one thousand successful births--are Mississippi and South Carolina. The eleven worst states, all with death rates of thirteen or higher, include six more states from the Southeast.
These and other study results are detailed in this report.
Sidebar: FINDINGS:Jobs and Income
The relationship between job growth and personal income is perhaps the best of all signs of the economic health of a state, addressing work opportunity as it increases or decreases over time, and the degree to which those jobs provide workers with an adequate standard of living. This section of the report examines employment change--the increase or decrease in the actual number of employees--in the top five states, the bottom five states, and the Southeast region, and then looks at income change in the Southeast and in the nation.2
Top Five States
During the ten-year period from 1975 to 1984, three states gained more than one million jobs: 2.7 million in California; 2 million in Texas; and 1.5 million in Florida. Other top ten states gained over 450,000 employees: New York, New Jersey, Georgia, North Carolina,
Page 5Virginia, Massachusetts, and Arizona.
Based on the index and ranking system, the five states with the highest level of job growth over the long-term period (1975-1984) were California, Texas, Florida, New York, and Georgia. During these ten years, 17.4 million new jobs were created in the United States. Of this number, 7.6 million or 43.5 percent were created in the top five states (see Table I, next page).
For the intermediate length period (1980-1984), the same five states were again the top job growth performers, this time accounting for 2.6 million or 65 percent of the 3.9 million new jobs in the United States.
Analysis of the short-term period (1984-1985) shows that California, Florida, Texas and New York retained positions in the top five states in producing new jobs. Michigan rebounded from the loss of 100,000 jobs and 48th ranking for the 1980-1984 period to edge out Georgia for the number five position. Over the short term, 2.75 million new jobs were created and 40 percent were created in the top five states.
The economies of these top five states are similar. In the 1970s, the national economy was dominated by manufacturing, as were the economies of the top five job creation states. In the 1980s, the rate of job growth in the manufacturing sector has been steadily declining with a corresponding rise in the rate of job creation in the service sector. During the recession years (1980-1983), the top five states lost 430,243 manufacturing jobs and gained 346,923 new service jobs. The intermediate period (1980-1984) saw only a one percent increase in manufacturing jobs (56,800), but a 22 percent increase in the service sector (1,331,900 new jobs) for the top five I performers in job growth.
The economy of the Deep South state of Georgia, like other Southern states, continues to be dominated by the apparel and textiles industries. The service sector, which still ranks third behind trade and manufacturing, accounted for 29 percent of the job growth in the three primary sectors and 30.6 percent of the total job growth for the 1980-84 period. Georgia, like California and Florida, did not lose jobs in the manufacturing sector; however, the rate of job growth in manufacturing declined (7.39 percent of total job growth) in the state for the 1980-1984 period.
A much clearer picture of the similarities in the economies of the top five job producing states and the U.S. economy can be seen through a comparison over the 1980-1984 period. The U.S. experienced a very slight increase in jobs (4.14 percent) as it moved from an employment base of 90.4 million in 1980 to 94.2 million in 1984. The increase in the number of service sector jobs was almost three-fourths of the net increase in jobs in the U.S. for these five years.
In 1980, the three leading industry sectors for job growth in the U.S. economy were manufacturing, services and retail trade. Manufacturing accounted for 22.4 percent of the total jobs, services for 19.8 percent, and retail trade for 16.6 percent. These three sectors accounted for almost 60 percent of the jobs created in the nation. By 1984, the service sector had moved to number one and accounted for 22 percent of total U.S. jobs. Manufacturing was second at 21 percent and retail was third at 17.3 percent. Over the five-year period, this represented a 3.4 percent decrease in manufacturing jobs, an 8.1 percent increase in retail jobs, and a 15.5 percent increase in jobs in the service sector.
In comparing job growth in the top five states to the U.S. job growth performance for the 19801984 period in the manufacturing, trade, and service sectors, the decline in manufacturing is seen in all of the top five states. Indeed, there has been a loss of jobs in this sector in New York and Texas and only modest increases in California (2 percent) and Georgia (6 percent).
In all of the top five states, the service sector is producing jobs at an increasing rate (37 percent and 33 percent in Florida and Georgia, and 25 percent and 18 percent in Texas and California). The relatively low growth rate for service jobs in New York is somewhat misleading since that has long been the dominant sector in its economy.
The net effect over the five-year period in the top five states was a 1.9 percent decrease in manufacturing jobs and a 43.5 percent increase in service sector jobs (see Table I).
Bottom Five States
In ranking states according to job growth, the top five states performed consistently. The bottom five states, however, had no discernible job growth patterns over the long, intermediate, and short-term time periods.
From 1975-1984, the bottom five states in job growth were North Dakota, Montana, South Dakota, District of Columbia, and West Virginia. During the 1975-1984 period, these five states added only 183,000 new jobs, representing 1.05 percent of total job growth in the U.S. for the period.
The states in the bottom five for the 1980-1984 period; by rank, were West Virginia, Michigan, Pennsylvania, Ohio and Illinois. Job growth was negative for these states, with a loss of 599,000 jobs, a decline-of 15.3 percent.
For the short-term period (1984-1985), the bottom five job growth states were Oklahoma, West Virginia, North Dakota, Montana and Louisiana. The job loss total for this period was 8,700, a decline of 0.3 percent.
For the intermediate period (1980-1984), the manufacturing sector lost 673,600 jobs in these five states while services added 375,400. In every state, however, the increase in services was insufficient to keep the net job growth from being negative.
In Table II, the percentage of jobs in manufacturing, wholesale and retail trade, and services are shown in 1980 and 1984 for the bottom five states. In 1980 manufacturing is clearly the dominant job sector in all except West Virginia. In 1984, manufacturing is still dominant in Michigan and Ohio, though less so. In every bottom five state, the percentage of services jobs i had increased.
Each of the bottom five states experienced job loss): levels significantly worse than the U.S. as a whole dur-
Page 6ing this period. Indeed, as a group they account for 36 percent of the U.S. total loss of 1,864,207 jobs. On an individual state basis, this represented a loss of 257,200 jobs or -5.3 percent for Illinois; Michigan declined by 93,400 jobs (-2.91 percent); Ohio lost 126,300 jobs (-2.89 percent); Pennsylvania lost 128,000 jobs (-2.67 percent); and West Virginia lost 62,700 jobs (-9.71 percent).
Despite its overall bottom national rank in The Climate for U.S. Workers, employment change is one category where the Southeastern United States did exceedingly well. In fact, for each of the three time periods surveyed, the Southeast ranked number one as a region in job growth, both in absolute numbers and percentage change.
Between 1975 and 1984, the Southeast gained 5.2 million jobs, a 32 percent increase over the ten years. Florida had the largest gain, 58.9 percent, while the smallest gain was made by West Virginia at 1.48 percent. After Kentucky's modest gain of almost 15 percent, the rest of the Southeastern states gained at least 20 percent. Four states in the region had employment increases greater than 500,000, and seven states gained between 100,000 and 300,000 jobs. West Virginia was the only state gaining less than 30,000 jobs for the ten years.
When examined by sectors of the Southeast's economy, job growth shows greater variation,withl3.5 million jobs, or 63 percent of the total employment in 1984, in manufacturing, retail and services. The 1984 employment was distributed relatively evenly among the three sectors in absolute and percentage terms. Manufacturing was second in relation to the three leading sectors, encompassing 33 percent of the employment in the three sectors, and 21 percent of the total for all sectors.
The substantial and sustained performance of the Southeast in job growth is undercut by its personal income statistics. Here, the region is at the bottom of the scale (see Table III).
In 1985, personal income per capita for the region was $11,169, last among all regions of the nation. When measured in absolute change for 1984-1985, the region does only slightly better, moving from the bottom rank of eighth to seventh, an absolute change of $537.
During the 1975-1984 period, personal income per capita for the Southeast more than doubled, gaining $6,114, a 121 percent increase. Over the ten-year period, however, the region does not climb from its bottom rank. In fact, the picture is even bleaker. Among the twelve states of the Southeast, eight are ranked at fortieth or below in personal income per capita. Only Virginia, (number 11) and Florida (ranked 14) are above the bottom grouping. The deviation of these two states from the regional pattern is perhaps because, unlike most Southern states, Virginia and Florida have the largest share of their jobs in trade, government and services, not manufacturing.
The performance of the Southeast during 1980-1984 was a slight improvement. For this period, the region had an absolute gain in personal income of $3,020 and a regional rank of five (out of nine). This represented a 37 percent gain, exceeded only by New England at 44 percent and the Mideast at 38 percent. As mentioned earlier, however, this rate of growth was insufficient to move the region's personal income off the bottom of the scale at $11,168.
Analysts and state development officials have long argued that industry is attracted to the South by its low wages and low income. Certainly this correlation appears
Page 7to hold for the ten years between 1975-1984 (see Table III), when the region ranked number one in job growth, eighth in personal income and seventh in hourly wages for production workers in manufacturing.
As Table III reveals, however, this relationship does not hold true for all regions of the country. For example, the Far West region is ranked number two in job growth and number three in personal income. With a rank of four in wages, there is a correlation between wages and income. Another example at the other end of the employment change scale is the Rocky Mountain region, which is eighth in job growth and seventh in personal income, yet comes in second among the regions in wage growth.
These variations are perhaps attributable to the job mix in each region's economy and, to a much larger degree, the incidence of low-wage manufacturing as a percent of the job total. For example, in the Far West, low-wage manufacturing represents 26 percent of the employment total, and in the Rocky Mountain region, 29 percent. In the Southeast, however, almost half (42 percent) of all jobs are classified as low-wage manufacturing for the ten-year period.
In the final analysis, the significant job growth in the Southeast region, due in large measure to its reliance upon an industries with jobs at the lower end of the wage scale, has not led to an adequate standard of living for a sizeable portion of its population. More specifically, personal income change has not kept pace with the changes in employment. The situation is one in which more and more people work full-time year-round and still have incomes below the poverty level. Indeed, the Southeast ranked worst of all regions when measured in terms of the incidence of working poor as well as income distribution, i.e., the proportion of families earning less than an adequate income.
The Nation: Low-Wage Jobs, the Working Poor, Unemployment, and Incidence of Low-Wage Manufacturing
One way to understand differences between states in wages and income is to look at the number of low-wage jobs in the state economy. Low-wage industries--those with national average wages of less than $8 per hour--include lumber and wood products, furniture and fixtures, food and related products, textiles and apparel, rubber and plastics, leather and tanning, and miscellaneous manufacturing jobs. We looked at these low-wage jobs as a percent of all the manufacturing jobs in each state in 1982, and the results show why the Southeast can rank high in job growth and yet low in wages and income.
Only four of the twelve Southeastern states have less than 40 percent low-wage jobs (Kentucky, West Virginia, Louisiana and Florida). The other eight range from 40 percent in Virginia to 62 percent low-wage jobs in North Carolina. Also at the bottom in this category are Oregon in the Far West, Maine in New England, and Idaho in the Rocky Mountain region. Only the two Pacific states have a greater dependence on low-wage jobs: Hawaii with 66 percent; and Alaska with 77 percent of its manufacturing jobs in low-wage industries.
Jobs in these low-wage industry groups are too few to be counted by our source, the Bureau of Labor Statistics, in the Plains states of North Dakota and South Dakota and the Rocky Mountain state of Wyoming. The remaining seven states in the top ten--those having less than 18 percent low-wage manufacturing jobs--range from 6 percent in the District of Columbia in the Mideast to 18 percent in the Southeastern state of West Virginia. Included in this top group are Nevada in the Far West, Arizona in the Southwest, Michigan in the Great Lakes, Kansas in the Plains, and Utah in the rocky Mountain Region.
Incidence of Working Poor
Due in large part to the shift from manufacturing to services jobs and to the inadequacy of the minimum wage, more and more people work full-time year-round and still have income below the poverty level. These are the working poor, and they are measured here as a percent of all householders who worked in 1979. Only three regions are represented in the ten states with the lowest proportion of working poor: New England with three states, the Mideast with four states, and the Great Lakes with three states.
States with less than 4 percent working poor are Connecticut, Massachusetts, New York, and New Jersey. States with 4 to 4.5 percent working poor are Maryland, Pennsylvania, Michigan, Wisconsin, Illinois, and New Hampshire.
A person is much more likely to be poor despite working if they live in the Southeast: of the ten worst states, eight are in the Southeast. These range from Tennessee, with 8.2 percent of its workers below poverty level, to Mississippi, with 12.7 percent, the highest proportion of working poor in the nation. The only states to join the Southeast at the bottom in this category are New Mexico and South Dakota. The only Southeastern states with lower percentages of working poor are North Carolina (7.7 percent), West Virginia (7.2 percent), Florida (7.1 percent), and Virginia (5.8 percent).
There is considerably more controversy about the accuracy of measures of joblessness and the connection between unemployment and economic hardship. It is generally conceded that the rate of long-term unemployed, if considered separately, would be lower; and
Page 8that the rate for short-term unemployment would be considerably higher if there were more adequate measurement of economic distress in rural areas and of blacks and many other urban residents.
Unemployment compensation, for example, is often used to supplement survey information in determining rates, yet many rural people traditionally do not apply for unemployment, and many are not eligible in the first place. Further, since labor on a family farm is counted as employed whether paid or not, even farmers facing foreclosure would not be reflected in the statistics. In urban areas the count misses many in distress--black youth and black men, the homeless, migrant workers and illegal immigrants--who distrust the system and evade attempts to measure them.
The unemployment rate ignores the underground economy, unemployment compensation and multiple incomes within the same family. Yet it also misses the many people who work full-time at low incomes--an issue we discuss in connection with low-wage jobs and the working poor. The rate would also be a great deal higher if it measured workers who have become so discouraged about finding a job that they have stopped looking for one, or workers forced into part-time jobs because full-time jobs are not available. The discouraged worker is not counted in the survey at all; the part-time worker is counted as employed. We must recognize, then, that the unemployment rates we discuss are but indications of the true depth of economic distress.
We looked at the percent of the civilian labor force that was unemployed for both 1984 and 1985, and the percent of the youth labor force that was unemployed for 1984.
Unemployment rates for 1984 for the civilian labor force varied from a low of 4.3 percent in South Dakota to the national high of 15.0 percent in West Virginia. For youth the lowest rate was 9.1 percent, also in South Dakota; the highest was in Mississippi at 32.7 percent.
Looking at civilian unemployment alone for 1984, the rates were lowest in the six states with 5 percent or less of their labor force without a job: South Dakota, Nebraska, New Hampshire, Connecticut, Massachusetts, Virginia, and Arizona. Six states had double-digit rates: Alaska in the Pacific; Louisiana, Mississippi, Alabama and West Virginia in the Southeast; and Michigan in the Great Lakes region.
Youth unemployment, on the other hand, was at double-digit rates in 1984 in all but three states: South Dakota (9.1 percent unemployment); New Hampshire (9.6 percent); and Massachusetts (9.6 percent). The five worst states for young workers that year were all in the Southeast. In Mississippi youth unemployment was higher than 30 percent; in four other Southeastern states the rate exceeded 25 percent: Tennessee (25.8 percent); West Virginia (28.3 percent); and Alabama (29.5 percent.)
For the civilian labor force in 1985 unemployment rates ranged from a low of 3.9 percent in Massachusetts to a high of 13.0 percent in West Virginia. Of the seven states with rates below 5.0 percent, five are in New England: Massachusetts, New Hampshire, Vermont, Connecticut and Rhode Island. Maryland is in the Mideast; and the lone state outside the northeastern U.S. in the top group is the Plains state of Kansas.
Unemployment was worst in the three states with rates exceeding 10 percent, all in the Southeast:
Page 9Mississippi (10.3 percent); Lousiana (11.5 percent); and West Virginia, which once again had the highest unemployment rate in the country (13.0 percent). Rounding out the bottom seven, the four other states with unemployment rates at 9.0 percent or higher were Illinois, Michigan, Alaska, and Kentucky, another Southeastern state.
Sharp regional differences emerge when we look at the change in the unemployment rates from 1984 to 1985. Of the seventeen states from New England to the Mideast and across to the Great Lakes region, only Connecticut had an increase in unemployment (0.3%). On the opposite coast, only one of the four states in the Far West and neither of the two Pacific states showed an increase in unemployment. Yet in all four states in the Southwest and four of five states in the Rocky Mountain region unemployment grew worse. There were similar increases from 1984 to 1985 in four of seven Plains states and four of the twelve states in the Southeast.
Measures of Income
Change in Personal Income
Personal income figures tell how well the people of a state have actually benefited from its jobs--whether those jobs provide workers with an adequate standard of living. We looked at each state's long- and short-term change in personal income per capita--the actual dollar amount gained--over the same periods we used to examine job growth: 1975 to 1984; 1980 to 1984; and 1984 to 1985.
During the most recent period, income rose over $1,000 in four states. The greatest increase—$1,127— was in Nebraska, followed by Connecticut with $1,080, the District of Columbia with $1,039, and Massachusetts with $1,035 gained. New Jersey, New Hampshire and Maryland had gains for the year of over $900 in personal income per capita. The remaining states in the top ten--New York, Virginia and Minnesota--had increases over $800. The greatest gains, then, occurred in the northeastern part of the nation: three of the top ten states are in New England and four are in the Mideast, while two are Plains states and one is in the Southeast.
The bottom fourteen states showed gains of less than $500 in personal income per capita over the 1984-85 period. Seven of the twelve Southeastern states make up half of this group: North Carolina ($462), Arkansas ($446), West Virginia ($404), South Carolina ($403), Kentucky ($353), Mississippi ($351), and Louisiana ($274). The remaining seven include two Southwest states, New Mexico ($485) and Oklahoma ($474); three in the Rocky Mountain region, Idaho ($459), Utah ($451), and Montana ($121); South Dakota ($303) in the Plains; and Alaska ($206) in the Pacific. Montana is the only state with a gain for the year of less than $200; Alaska and Louisiana are next to last.
The dollar change in personal income per capita for the preceding five years, from 1980 to 1984, was greatest in eight states showing gains over $4,000. Connecticut topped the nation with an increase of $4,988, followed by the District of Columbia and Massachusetts. Alaska in the Pacific region is the only state in the top eight not in the northeastern U.S.; the others are in New England or the Mideast region, including New Jersey, New Hampshire, New York and Maryland.
Dollar gains over the five-year period were less than $2,000 in only two states, West Virginia and, lowest in the country, Wyoming with an increase of only $1,229. Eight other states in the bottom ten showed dollar gains less than $2,500: Nevada, Oregon, Louisiana, Mississippi, New Mexico, Montana, Idaho and Utah.
Over the ten-year period from 1975 to 1984, the largest long-term dollar gains in personal income per capita were in the top eleven states. In two of these states the gains were over $9,000: Connecticut, with a ten-year income increase of $9,582, was followed by the District of Columbia, with $9,118. In four states increases were greater than $8,000: Massachusetts, New Hampshire, New Jersey, and Alaska. The remaining five, where increases exceeded $7,500, are Maryland, New York, California, Colorado, and Virginia.
The smallest long-term increases in personal income occurred in the four states where gains were under $5,000: Idaho and Utah in the Rockies; and West Virginia and Mississippi--lowest in the nation--in the Southeast. Another five Southeastern states are among the eleven where dollar gains were lower than $5,500: South Carolina, Tennessee, Kentucky, Alabama and Arkansas. Also in this group are New Mexico in the Southwest and Montana in the Rocky Mountain region.
We looked at median family income for 1979, the midpoint of our period for long-term income change, and learned that families were struggling hardest to make ends meet in the Southeast. In ten of the twelve states in the region--excluding Virginia and Louisiana--over 70 percent of families with income earned less than $25,000. Also in this bottom group are Montana, Idaho, Oklahoma, New Mexico, North Dakota, South Dakota, Vermont and Maine; in this category the proportion of families earning less than an adequate income ranges from 70.8 percent in Montana to the worst in the nationߞ79.6 percent—in Arkansas.
No Southwestern or Southeastern state, however, is among the top ten, where less than 60 percent of working families earned under $25,000. The state with the lowest proportion is Alaska, with 43.6 percent. The other Pacific state, Hawaii, is also in the top ten. In the Far West are California and Washington; in New England, Connecticut. Maryland and New Jersey from the Mideast, Illinois and Michigan from the Great Lakes, and Wyoming from the Rocky Mountain region are also among the top states with the lowest proportion of families earning less than $25,000 in 1979.
Average Annual Pay
Average annual salaries of most workers in 1983, the midpoint of our time frame for short-term income change, were examined to fill out the national income picture. The eight states where annual pay was less than $15,000 include four from the Southeast: North Carolina, South Carolina, Arkansas, and Mississippi. Also at the
Page 10bottom in this category are Vermont and Maine from New England, and Nebraska and South Dakota from the Plains states.
The twelve states where workers made the most in 1983 include no Southeastern state and only one-Texas--from the Southwest. Again Alaska tops the nation, paying an average $23,844. The other ten states in the top twelve averaged annual pay between $18,000 and $20,000. Joining D.C. from the Mideast region are New York, New Jersey, and Delaware. In this category from the Great Lakes region are Michigan and Illinois, and from the Far West, California and Washington. One state in each of three other regions averaged over $18,000 in 1983: Connecticut in New England; Texas in the Southwest; and Colorado in the Rocky Mountain region.
Cost of Living
Income does not always keep pace with the cost of living, however. In the second quarter of 1985, the American Chamber of Commerce Researchers Association (ACCRA) measured the cost of living for the largest available city in 45 states. These measures and the ranking we derived from them--while limited by the considerations detailed in Appendix I--show that in some relatively high-income states such as Alaska, New York and New Jersey, there is also a relatively higher cost of living. The nine measured cities with a cost of living higher than the national average (indexed by ACCRA at 100) are topped by Anchorage, Alas., at 139.2, followed by New York City at 137.3, and the Newark, N.J., metro area at 122.7.
Lower wages, on the other hand, are not always accompanied by a lower cost of living. Of the twelve Southeastern cities measured, five are higher than the national average and seven are lower. The fifteen cities with a cost of living lower than the national average are led by Fort Smith, Ark., with the lowest ACCRA index, 92.3. The most expensive Southeastern city, Atlanta, Gal, is indexed at 106.1. Other measured cities in the region with a cost of living higher than the national average are Birmingham, Ala.; Columbia, S.C.; Jacksonville, Fla.; and Hampton Roads, Va., which includes the metro area encompassing Norfolk, Virginia Beach and Newport News.
Wages of Manufacturing Workers
To discover state and regional differences in manufacturing wages, we looked at average hourly earnings of production workers in 1984, the starting point of our one-year period for income change. Nine of the twelve Southeastern states--excluding Louisiana, West Virginia and Kentucky--are among the bottom thirteen states, where these workers average less than $8 per hour. (This figure is also the measure of a low-wage job.) The range in the states averaging the lowest hourly wage is from $7.97 in Alabama to the national low of $6.95 per hour in Mississippi. Joining the Southeast at the bottom in this category are Maine, Vermont, New Hampshire and Rhode Island from New England; New Mexico from the Southwest; and North Dakota and South Dakota from the
Page 11Plains region.
The top eleven states--where production workers in manufacturing averaged over $10 per hour in 1984--include no Southwestern state and only Louisiana from the Southeast. The range here is from the highest average hourly wage in the nation, $12.25 in the Pacific state of Alaska, to $10.03 in Wisconsin in the Great Lakes region. Also in the top eleven from the Great Lakes are Michigan, Ohio, Indiana and Illinois; the Rocky Mountain state of Montana; Oregon from the Far West, Iowa among the Plains states, and from the Mideast region, the District of Columbia.
Wage Growth 1980-1984
There are also differences between states in changes in pay over time. We looked at the gain in average hourly wages of production workers in manufacturing from 1980 to 1984, the same time frame for our examination of short-term income change. Only production workers in South Dakota gained less than one dollar per hour, posting a sixty-five cents gain over the entire five-year period. Other states where workers gained less than $1.50 are North Dakota ($1.30), Nevada ($1.40), and Alabama ($1.48). Rounding out the bottom ten are Mississippi, Arkansas, Iowa, Nebraska, Colorado, and Hawaii.
Production workers in manufacturing gained more than $2.50 per hour from 1980 to 1984 in only one state, Michigan, where wages increased by $2.66. Other states where workers gained more than $2.25 are Ohio ($2.39), Louisiana ($2.32), and Oklahoma ($2.28). Additional states where the gain in hourly wages exceeded $2 over these five years are New Jersey, New Mexico, Kansas, Minnesota, Missouri, Connecticut, Maine, California, Illinois, and Alaska.Poverty
Persons in Poverty
Six of the ten states with the largest proportion of poor people in 1979 are in the Southeast. All but one Southeastern state-Virginia--are in the bottom sixteen. These range from Florida with 13.5 percent poor persons to Mississippi with 23.9 percent. Joining the Southeast in the bottom ten are South Dakota, 16.9 percent poor persons; New Mexico, 17.6 percent; and the District of Columbia, 18.6 percent. Texas,14.7 percent, joins the bottom sixteen.
Wyoming has the lowest proportion of poor, 7.9 percent. Other states in the top ten--with less than 10 percent poor in their populations--are Connecticut, New Hampshire, Massachusetts, Wisconsin, Indiana, Nevada, Washington, New Jersey, Maryland, end Minnesota.
Black Persons in Poverty
In 1979, a black person was most likely to be poor in the Southeast: all of the nine states with the highest proportion of black poor persons are in the Southeast; ten of the eleven worst states are in the Southeast. The only state with a similarly high proportion of black poor is Rhode Island. The range in the bottom eleven is from 30 percent in North Carolina to 44 percent of the black population living in poverty in Mississippi. The only Southeastern states not ranked near the bottom still have over a quarter black poor: Virginia (26 percent), and West Virginia (27 percent).
The top ten states--where blacks are least likely to be poor--range from 21.3 percent in Idaho to 10.9 percent black poor in Alaska. Other states with the lowest proportion of the black population living below the poverty level are North and South Dakota in the Plains; Maine, Vermont and New Hampshire in New England; Hawaii in the Pacific; and Nevada and Washington in the Far West.State Actions
Statutory Protection of Workers
We examined the states to see how many of fourteen common state statutes protecting workers were in effect, and whether or not their provisions made them meaningful. State statutes are not counted if they do not meet certain criteria; for example, state anti-discrimination acts covering employment practices of the state but not private employers. State laws which are counted meet the minimum standards.3
Briefly, these are laws prohibiting sexual harassment, electronic surveillance, and discrimination on the basis of race, religion, color, sex or physical handicap; laws providing whistleblower protection, access to personnel files, maternity leave, and time off to vote; laws establishing minimum wages, maximum hours, mandatory pay for overtime, timely payment of wages, and equal pay by sex; and laws guaranteeing employees' right to know about exposure to hazardous materials on the job and to obtain information about their welfare fund.
The eight states with the least worker protection are all in the Southeast. In Alabama and Mississippi, not one of the fourteen laws had been enacted; in South Carolina only one; in Virginia and Louisiana only two; in Tenn-
Page 12essee, Florida and North Carolina only three. The other two states in the bottom ten are the Plains states of Iowa and North Dakota.
The state which comes within one law of having all fourteen is California, which lacks only legislation prohibiting electronic surveillance. The other states in the top ten--those providing the most protection to workers through state statutes--are Connecticut, Rhode Island, Massachusetts, Illinois, Ohio, Alaska, West Virginia, Kentucky, and Maryland.
State Minimum Wages
At the end of 1985--when the federal minimum wage, which has not been adjusted for inflation since 1981, remained at $3.35--state minimum wages in non-farm employment ranged from a high of $3.90 in the District of Columbia to a low of $1.40 in Texas. That is among states having minimum wage standards for at least some of their workers; nine states have none at all, including six states in the Southeast: Alabama, Florida, Louisiana, Mississippi, South Carolina and Tennessee. Two of the bottom nine are Plains states, Iowa and Missouri; and one, Arizona, is in the Southwest.
Of the forty-two states with minimum wage statutes, twenty-two set a rate even lower than the federal minimum. There are many gaps and inconsistencies in coverage even where minimum standards do exist. For example, the state maximum of $3.10 in North Dakota affects only professional, technical, clerical and mercantile workers. The minimum for manufacturing workers is lower at $2.95, and for public housekeeping workers lower still at $2.80. In Utah the maximum of $2.75 applies only in the Salt Lake City area; elsewhere it is $2.50.
Three states besides the District of Columbia have a minimum wage higher than the federal minimum: Alaska, Maine, and Connecticut. Sixteen states equal the federal minimum of $3.35: Hawaii, California, Maryland, New Jersey, New York, Pennsylvania, Michigan, Illinois, Massachusetts, New Hampshire, Rhode Island, Vemlont, Minnesota, New Mexico, Oklahoma, and North Carolina.
Maximum Benefits for Disability
While all states provide disability benefits for job-related injury, there is considerable variation in the maximum weekly benefit. The maximum weekly benefit for permanent total disability of $1,114 in Alaska in the Pacific region was almost two times the next highest payment, $580 in Iowa. The top nine states, which paid over $350 per week as of January, 1985, also included Illinois, Michigan, Ohio, Maine, New Hampshire, Connecticut, and the District of Columbia.
At the bottom of the benefit scale, five of the six states that pay the least for permanent total disability--under $200 per week--are in the Southeast region: Alabama, Arkansas, Tennessee, Georgia and Mississippi. Indiana in the Great Lakes region is also in this group. Joining them in the bottom ten--where states pay less than $220 per week for job-related injury--are the Plains state of Nebraska and three Southwestern states: Oklahoma, Arizona and Texas.
Maximum Unemployment Benefits
As of January 1984, weekly unemployment benefits varied from a high in Massachusetts of $278 (where the range is from $185 to $278) to the national lows of $105 in Mississippi and Missouri. In nine states the top range of the weekly unemployment check exceeds $200: Massachusetts, Connecticut, Ohio, Illinois, Alaska, West Virginia, Louisiana, Pennsylvania, and the District of Columbia.
In the twelve worst states, the weekly unemployment benefit is $140 or less. Eight of these twelve are in the Southeast: Kentucky, Virginia, Arkansas, Georgia, Alabama, South Carolina, Tennessee, and Mississippi. The Plains states at the bottom are Missouri, Nebraska, and South Dakota; the lone Southwestern state is Arizona.
State Per Capita Expenditure
One measure of a state's investment in its citizens is its per capita expenditures--the money spent per person (based on 1980 population) by state government in all categories. The eight states investing $1,500 or more per capita are led by Alaska ($2,548) and Wyoming ($2,132). Other states with high per capita expenditures are Hawaii, New Mexico, North Dakota, Minnesota, and Delaware.
Eight states spend less than $1,000 per capita: Ohio, Indiana, Arkansas, Florida, Tennessee, Texas, New Hampshire, and Missouri, which spends the least, $807 per person.
State Aid to Schools
As an indication of state investment in education, we looked at state revenue contributions per elementary and secondary school pupil for the 1980-81 school year. This figure was chosen to reflect state effort because the more
Page 13familiar measure, per pupil expenditures, includes federal and local funds. It should be noted, however, that in some states, by law, localities bear the heavier proportion of costs, and this is not reflected here.
State revenue contributions per pupil are lowest in New Hampshire ($143.04) and second lowest in Nebraska ($688.77) The other nine states contributing less than $1,000 per pupil are Mississippi, Arkansas, South Carolina, Tennessee, Rhode Island, Connecticut, Vermont, Missouri, and South Dakota.
The state contribution is highest in Alaska ($4,210.66), and second highest in Washington ($2,366.89). Other states in the top ten, where revenue contributions per pupil exceed $1,500, are Hawaii, Delaware, New York, Georgia, Florida, Minnesota, California, and New Mexico.Hazardous Jobs
Job-Related Death Rates
The two industry sectors with the highest job-related death rates (excluding agriculture) are construction, with a death rate of 37 per 1,000 workers from 1945 to 1983, and mining/quarrying, with a death rate for the same period of 50 per 1,000 workers. Employment in these two hazardous job sectors is measured here as a percent of all nonagricultural employment in the states for 1982. Since this was a recession year, the figures are lower than would normally be the case.
The eight states with the lowest proportion of these jobs--3.5 percent or less--are the District of Columbia, New York, Wisconsin, Michigan, Rhode Island, Massachusetts, Connecticut, and Oregon.
The seven states with the greatest dependence on these jobs--in excess of 10 percent of total employment--are Texas, New Mexico, Oklahoma, Alaska, Louisiana, West Virginia, and Wyoming, which at 25.6 percent has a proportion of hazardous jobs almost twice as large as the second worst state, 14.6 percent in West Virginia.
Rates of Occupational Disease
The U.S. Occupational Safety and Health Administration has identified six industry groups (excluding agriculture) generally considered to have unusually high rates of occupational disease. These are jobs in mining, cotton weaving mills and other cotton products industries, chemicals and allied products, rubber and miscellaneous products, and leather and tanning. Here we are looking at employment in these groups as a percent of all nonagricultural employment in the states for 1982. Again, during this recession year, the figures are lower than normal.
The states with the lowest proportion of jobs having high rates of occupational disease--less than one percent--are Oregon, Washington, and Nebraska. States with 1.5 percent or less of these jobs are South Dakota, Minnesota, Vermont, Maryland, and Florida.
The states with the most jobs having high occupational disease rates--in excess of 10 percent of all nonagricultural jobs--are Delaware, West Virginia, and Wyoming. Other states with 7 percent or higher are Kentucky, South Carolina, Louisiana, New Hampshire, and Oklahoma.Commuting Time
Travel Time to Work
Time spent commuting to and from work is more than a measure of inconvenience, in this case, a one-way travel time of 45 minutes or more. It also reflects the geographic distribution of jobs within a state and the degree of job concentration in congested urban areas.
In the top ten states, less than 6 percent of all workers have a one-way commute of 45 minutes or more. This group is dominated by the Plains region: Nebraska, South Dakota, North Dakota, Iowa--all in the top five, with less than 5 percent of all workers--and Kansas. Also in the top five is the Rocky Mountain state of Montana. The remaining states in the top ten are Alaska, Wisconsin, Nevada, and Rhode Island.
Four of the worst five, where over 15 percent of all workers have a one-way commute of 45 minutes or more, are in the Mideast: New York with 25.3 percent of all workers, the District of Columbia (21 percent), Maryland (18 percent), and New Jersey (16 percent). Illinois (17 percent) is also in this group. Other states in the bottom ten are Louisiana, Virginia and West Virginia, Pennsylvania and California.Health Care
Number of Physicians
As one indication of the availability of health care, we looked at the number of physicians per 100,000 people, based on the 1980 population. The rate is highest in the District of Columbia, with 511 physicians per 100,000.
Page 14The top eight states in this category have a rate over 200 and except for California, all are in the Northeast: Maryland, New York, Massachusetts, Connecticut, Vermont and Rhode Island.
Six of the thirteen states with the fewest physicians are in the Southeast. Their rates range from 127 per 100,000 in West Virginia to Mississippi, where the rate is the lowest in the nation at 102. Other Southeastern states in the bottom thirteen are Kentucky, South Carolina, Alabama and Arkansas, joined by Indiana, Oklahoma, Iowa, South Dakota, Alaska, Wyoming, and Idaho.
A telling indication of the quality of health care in a state is its infant mortality rate, the number of infant deaths before age one, per thousand live births. The two states with the worst infant mortality rates--over 15 deaths for every thousand births--are Mississippi and South Carolina. The eleven worst states, all with death rates of 13 or higher, include West Virginia, Alabama, North Carolina, Florida, Louisiana and Georgia, and, from outside the Southeast, Michigan, Illinois, and Delaware.
A baby has its best chance of surviving its first year in Vermont, with 7.7 infant deaths per thousand, and in nine other states with infant mortality rates of 10 or below: New Hampshire, Massachusetts, Idaho, Utah, Colorado, Nebraska, Iowa, Hawaii and New Mexico.Equal Employment
Traditionally White Male Jobs
Until recently, blacks and women have been excluded from traditionally white male (TWM) occupations, which are defined here as officials/administrators, professionals, technicians, and craft workers. What is being measured here is the number of blacks and women who were employed in these jobs as a percent of all blacks and women who were employed in private industry in 1981. Black men, black women, and white women are ranked separately.
The six states with the highest proportion of working black women holding TWM jobs--over 20 percent--are Montana, Idaho, Washington, California, New Hampshire and Vermont. Vermont at 32 percent outdistances second place Idaho at 24 percent.
Ten of the fourteen states where black women are more likely to be excluded from these occupations--less than 13 percent of working black women in TWM jobs--are in the Southeast. Only Virginia and West Virginia in the region have slightly higher rates. The bottom fourteen range from 12.9 percent in Alabama to 9.3 percent in South Carolina. Only Wisconsin at 9.0 percent has a lower proportion of working black women in these occupations; and only Wyoming, South Dakota and Nevada join the Southeast from other regions at the bottom in this category.
The thirteen states with the highest proportion of working black men in TWM jobs--over 30 percent--are Idaho, Montana, Utah, New Mexico, Vermont, New Hampshire, Massachusetts, Connecticut, and California.
The thirteen states where black men are still likely to be excluded from these occupations--less than 25 percent of working black men in TWM jobs--include eight of the Southeastern states: South Carolina, Kentucky, Arkansas, North Carolina, Georgia, Tennessee, Florida, and Alabama. The three states with the lowest proportions, however, are North and South Dakota and Wisconsin. North Dakota at 7 percent is significantly more exclusionary than next worst Wisconsin, where 19 percent of working black men hold jobs traditionally denied to them.
In fourteen states more than 26 percent of the working white women are employed in TWM jobs. The proportion is far higher in the District of Columbia (43 percent) than in second place New Mexico (29.3 percent). New York, Maryland, Delaware, North Dakota, Washington, California, Colorado, Montana, Massachusetts, Connecticut, Alaska, Virginia and Texas also have a high proportion of working white women in TWM jobs.
In the bottom ten states, the proportion of working white women holding TWM jobs is 21.4 percent or less. Eight of the ten are in the Southeast, from Alabama at 21.4 percent to the national low of 17.0 percent in Arkansas. The remaining bottom ten states are Mississippi, Kentucky, Tennessee, North Carolina, South Carolina and Georgia from the Southeast, and Utah and Indiana.Labor Membership
Participation in Unions
As an indication of freedom to organize bargaining units in the workplace, we looked at labor organization membership as a percent of non-agricultural employment in 1980. States with the greatest proportion of workers affililiated with labor or membership organizations--over 30 percent--are New York, Pennsylvania, Michigan, Ohio, Illinois, Indiaian, Washington, West Virginia, and Alaska.
Sixteen states have the lowest labor organization membership in their workforces, less than 18 percent, and eight of the sixteen are in the Southeast: Lousiana, Mississipppi, Arkansas, Georgia, Virginia, Florida and North and South Carolina, which at 9.6 and 7.8 percents, respectively, have the lowest proportion in the country. Three of the remaining states are in the Plains region: North and South Dakota and Kansas. The others are Arizona, Oklahoma, Texas, New Hampshire and Utah.
While this report began with a number of conclusions to be drawn from some thirty-three indicators of the quality of working life, the heart of the issue--the overall climate for workers in the U.S.--lies within the realm of jobs and income. From this perspective, several key points are clear:
* The U.S. economy is undergoing a major restructuring away from traditional manufacturing jobs and toward a technology-driven economy dominated by
Page 15service jobs.
* Contraction in manufacturing and expansion in services and high-tech industries is uneven. The Southeast in particular lags behind the national trend, and rural areas across the nation are suffering the most, with the slowest job growth and the lowest incomes for workers.
* This unevenness in job and income growth has been exacerbated in the farm states and the energy states--notably Alaska--where conditions have deteriorated during the past two years. This time period is not covered here in the same depth as the preceding ten years, and this report may have captured a high point in their economic well-being to which they may not return for some time to come.
* The transition to the new national job mix and away from traditional manufacturing jobs is causing serious dislocations of workers which, in the absence of a human resource development policy, threaten to become longterm. The new poverty figures released August 1986, too late for consideration in this study, show a new and growing class of working poor.
* The thousands of new jobs that are being created are seldom filled by these dislocated workers, whose education and skills do not match the qualifications for high-tech manufacturing and service jobs.
* Even those dislocated workers who can make the leap from traditional manufacturing to the new kinds of jobs are earning substantially less money now. Fast food chains are not paying steelworker wages.
* These changes in the U.S. economy and the consequences for workers caught in shrinking job areas have profound implications for the Southeast. Despite numerical gains in job growth that lead the nation and recent improvements in state financing of education, the region has failed to meet the standards set by the rest of the nation in almost every other way: the smallest gains in wages and per capita personal income, the largest proportion of working poor, the highest incidences of poverty, and so on.
* The challenge and the task that face the Southeast today and in the future is to create jobs with the income and benefits needed to bring the region's workers above the poverty level--not just new jobs as in the past, but jobs that will significantly improve the standard of living for people who work full-time, year-round.
* The reality is that in order to attract these better jobs, the Southeast must improve the quality of education. Recent steps in a number of states in the region to set higher standards and increase the state share of financing elementary and secondary schools are keys to a long-term strategy. Until it begins to take effect, another generation will leave the schools and enter the job market with skills and abilities well below those of workers in other regions, and in too many instances functionally illiterate.
* States that have been successful in attracting better jobs, as in Massachusetts, have invested in education. States that have been able to counter the shock of the structual changes in the economy, as is beginning to happen in the Great Lakes states, have successfully diversified their job mix. Not coincidentally, these are also the states and regions that provide the greatest degree of worker protection and the most consideration for workers who become disabled or unemployed. They have higher wages and lower rates of poverty, and a better chance of rebounding from periods of unemployment.
* One of the most striking and consistent regional performances is the grouping of the Southeastern states at the very bottom of the rankings for equal employment opportunity. The glaring maldistribution of the benefits of employment away from the large population of minorities and women damages the entire region.
* There are in effect two Souths: one where jobs and income are available, and one where they are not. Moreover, the effects are even more severe for blacks and women in the rural areas of the region.
* Regardless of improvements that may be made in job creation, human resource development, and education, unless these improvements are available to black and white Southerners alike, the region will remain the worst in the nation for wage-earners and their families.
* The poor, the working poor, minorities and women--especially in the rural South--have formed a permanent underclass in the region, one that has been called "disadvantaged" and "structurally unemployed" for more than twenty years. With recent changes in federal policies and programs, their lot has deteriorated below even the poverty levels of the early 1960s. Given the climate for workers in the region, there are few chances indeed for these groups to help themselves. In the absence of policies and programs that directly address their needs, there is little hope for help from other sources.
Kenny Johnson is the director of the Southern Labor Institute, a project of the Southern Regional Council. A native of Louisiana, he is a former regional director of the National Rural Center. Johnson joined the Council after having served as field director of the Voter Education Project. Marilyn Scurlock is a staff member of the Southern Labor Institute and a former staffer of the Southern Office of the National Rural Center.
The national ranking for each state is n
composite score based on a weighted total (called the worker climate
index) that is derived from thirty-three indicators. The fifty states
and the District of Columbia were examined across the spectrum of
working and living conditions: job and income growth and distribution,
hazardous and low wage jobs, poverty and the working poor, statutory
protection and state labor department policies, equal employment
opportunity and labor organization membership, among other
indicators. A rank of one is beat fifty-one is worst. The nine
regional divisions used in this report are based on those used by the
U.S. Department of Commerce, Bureau of Economic Analysis; see map,
. To compare changes in both employment and personal income we looked at the same three time periods: "long term" change during the ten years from 1975 to 1984; "short term" change from 1980 to 1984, and the most recent one year period for which data is available, from 1984 to 1985.
3. The minimum standards are described in Appendix II, along with the table showing which statutes were in force in each state a8 of Summer 1985. These are not included here but are available with the full text of the report. See Order Info, page 2.