Globalization Drives Persistent Inequality The Climate for Workers in the U.S. 1997
By Preston Quesenberry
Vol. 19, No. 3-4, 1997 pp. 3-20
As we go to press with our fourth edition of the Southern Regional Council’s Climate for Workers survey, recent reports tell us the nation’s economy couldn’t be better. Unemployment is at generational lows. The stock market is still near record highs, despite recent volatility. Inflation is in check, and profits are rising. This, a business climate report might say, is as good as the “free market” gets.
But low unemployment rates have not given workers enough bargaining power to make any significant in-crease in wages–or even to fend off their real decline. The record numbers in the Dow have little relevance for the 71 percent of the population who own no stock or less than $2,000 worth (even in pension and mutual funds). And while most people like low inflation, the top one percent of the income scale (who make 40 percent of their income off investments) benefits far more than those at the middle and bottom.
Assessing the current U. S. economy from the perspective of a business climate report, high marks go to low inflation, stagnant (or falling) wages, low benefit costs, low union densities, strategies that maximize temporary and part-time work, “deregulatory” legislation, and regressive tax policies. The Climate for Workers, however, looks for states with stable employment, ad-equate pay checks, fair and safe workplaces, good places to live, and solid worker protections.
So far in the 1990s, state legislatures continue to erode statutory protection for workers, particularly unemployment and workers compensation. In 1996, the U.S. Congress passed and President Clinton signed a welfare “reform” act that will push millions of workers (often paid sub-minimum wages) into the low-wage labor market and put a downward pressure on wages for the bottom 30 percent of the income scale. The “balanced budget” agreement of 1997 gave about 50 percent of the plan’s tax cuts to the top 5 percent of the income scale.
Meanwhile, the much-advertised economic recovery of the 1990s has done nothing to lessen the country’s historically high rate of poverty and has brought the inequality of income and wealth to record highs. The real income of the median household–the household exactly in the middle of the income scale–has increased modestly over the last three years, but it still has not recovered from sharp declines in the early 1990s and remains almost $1,000 below its 1989 level. Even worse, the real median hourly wage has actually declined from $6.96 in 1989 to $6.37 in 1995 (in 1995 dollars) and declined another .9 percent between 1995 and 1996. During these years, the bottom 80 percent of men and 60 percent of women experienced some deterioration in wages. Workers have compensated for the decline in wages by working more hours, holding more jobs, or sending more household members into the workforce.
Part of the reason for falling wages has been trade agreements like GATT and NAFTA, which have increased the ease of international investment flows at the expense of domestic investment in manufacturing; helped exacerbate chronic trade deficits; enabled the outsourcing of intermediate production work to low-wage countries; and increased the leverage of employers with both workers and governments.
“Almost everybody agrees international trade has had a negative impact on the wages of low and middle income people,” says Ray Marshall, former Secretary of Labor and now professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas. “To change this trend, we need to get international economic policy right, and that means having international labor standards as part of the trade agreements with all countries. We know that as global economies become integrated, there will be a convergence of wages between the U.S. and other countries. The real question is, Which way do you want the convergence to take place? My view is, we’d be a lot better off if we raise their wages rather than lower ours. But we’re going in the opposite direction with NAFTA.”
The “right direction” for the U.S. and the rest of the world, Marshall says, is to “stop competing with wages, and start competing with rising productivity and quality.” But if the U.S. is ever to begin pushing policies that raise the world’s living standards rather than corporate profits, it will need to put an end to the destructive “race to the bottom” that exists within our own borders–between the states.
States currently compete with each other for business investment by offering the lowest wages, the least protective labor laws, the lowest taxes, and the slackest
environmental regulation. Currently, the states with the by the winter of 1997, it had fallen to below 5 percent. At best labor climates–mostly in New England, the Mid- the same time, employment has grown, but sluggishly. Atlantic, the Great Lakes, and the Far West regions–are Indeed, no post-war upturn in the economic cycle has often handicapped rather than rewarded for their higher seen slower job growth. The 11.6 million net new jobs standards. As the Climate for Workers shows, the states with the highest incomes, the best protection for workers, the strongest unions, and the best public provisions have not been among the high growth states. Indeed, many of them had fewer jobs in 1996 than they did in 1989.
As a result, even moderate legislators in these states and elsewhere are calling for “business-friendly” provisions to make their states more “competitive”–tax breaks for businesses, dramatic reductions in workers compensation and unemployment insurance benefits, “right-to-work” laws and other anti-union measures, the weakening of overtime and prevailing wage provisions, public spending cuts, and privatization.
The push to end this absurd “race to the bottom” must begin by setting national standards at least at the level of those states with the best climate for workers. This report highlights those states by looking at five general categories, each of which is composed of five to eleven indicators: labor market opportunity, earnings and income, workplace conditions, state protection of workers, and quality of life.
Combining job-growth and unemployment statistics, “labor market opportunity” includes measures commonly used by business climate reports to gauge the health of a state’s economy. However, the business press and the financial community begin to worry when unemployment rates get too low and labor “shortages” begin to emerge, because this gives workers a better bargaining position and, theoretically, drives wages up. The Climate for Workers, how-ever, celebrates a tight labor market for these very reasons. If the overwhelming majority of people must be sellers on the labor market, better to have the advantage with the seller than the buyer. And the closer a society comes to gainfully employing all of its members in productive activity, the better.
Nationally, unemployment is lower than it has been in decades. The average annual unemployment rate for 1996 was 5.4 percent and by the winter of 1997, it had fallen to below 5 percent. At the same time, employment has grown, but sluggishly. Indeed, no post-war upturn in the economic cycle has seen slower job growth. The 11.6 million net new jobs
added to the economy between 1989 and 1996 represent a growth rate of just 1.5 percent a year, compared to 2.6 percent a year between 1967-79 and 1.9 percent between 1979-89.
“Unemployment could and should have been lower sooner,” argues Jared Bernstein, a labor economist with the Economic Policy Institute (EPI). “But those who control macropolicy have consistently favored anti-inflationary policy over low-unemployment policy. That’s created a climate of slow employment growth where it’s difficult for workers to seek wage gains.”
|State||Region||Net Long-term Change in Employment (thousands)||Rank||Net Intermediate Change in Employment (thousands)||Rank||% Long-term Change in Employment 1979-1996 (thousands)||Rank||% Intermed Term Change in Employment||Rank||% Short-term Change in Employment 1995-1996||Rank||Unemployment Rate 1996||Rank||Youth Unemployment Rate 1994||Rank||Employed as % of Civilian Labor Force 1996||Rank||Age Rank||State Rank|
|New Hampshire||New Eng||181.2||38||30.6||41||47.9||12||5.8||39||3.7||5||4.2||11||11.8||9||67.34||14||19.2||12|
|New Jersey||Mid Atl||612.8||17||-49.8||47||20.2||39||-1.3||46||1.1||41||6.2||42||18.4||34||63.05||33||37.4||47|
|New York||Mid Atl||737.7||12||-329.7||51||10.3||48||-4||48||0.6||46||6.2||43||19.8||39||57.80||50||42.8||49|
|Rhode Island||New Eng||41.8||48||-20.1||46||10.5||46||-4.4||49||0.4||48||5.1||26||19.1||37||62.25||37||39.3||48|
Note: Average rank is computed using the individual ranks from each indicator. State rank shows overall ranking for the category.
On a regional level, EPI’s most recent edition of The State of Working America (1997) shows that the labor market trends of the 1980s reversed themselves in the 1990s. In the 80s, the states in New England and the Mid-Atlantic had the lowest unemployment in the nation, as “growth accelerated and the service sector expanded.” Correspondingly, the Mid-Atlantic and New England ranked first and third in labor market opportunity in SRC’s 1990 Climate for Workers. California experienced good job growth and low unemployment as well, (it was ranked eighth in labor market opportunity in the 1990 report), but growth was decelerating there as in the rest of the West.
But “the Northeast suffered badly in the recession,” says Neil Upmeyer, the president of the Center for the Analysis of Public Issues in New Jersey. “The recession started earlier here,” argues Upmeyer. “It lasted longer here. And it was deeper here than anywhere else in the country. The job recovery rate was just extremely slow compared to everywhere else.”
By 1996, only five of the twelve states in the Mid-Atlantic and New England had even re-gained the number of jobs they had in 1989, and those five states had among the slowest growth rates in the country. In addition, the unemployment rates in Connecticut, New York, New Jersey, and D.C. were all well above the national average, not below it as they were in 1989. As a result, New England and the Mid-Atlantic rank seventh and ninth in labor market opportunity this year.
California also experienced a fall from grace, dropping from 8 to 32 in rank, primarily because it had the third worst unemployment rate in the nation in 1996, as well as the ninth slowest job growth rate between 1989 and 1996.
“Over the 1980s, the Northeast and California did pretty well,” Bernstein said. “But those patterns reversed in the 1990s. The coasts pretty
much got slammed in the most recent recession and early recovery, while the middle of the country did a lot better.”
Indeed, eight of the top ten states in this year’s labor market opportunity rankings are in what one could call “the middle of the country.” The first and second ranked states–Utah and Colorado–are in the Rocky Mountain region. Both had very strong job growth as well as particularly tight labor markets. Utah added 263,500 jobs to its economy between 1989 and 1996, the second highest growth rate in the country (38.1 percent). At the same time, the state had a 1996 unemployment rate of 3.5 percent (fourth lowest) and a labor force participation rate of nearly 70 percent (eighth highest). By 1997, the unemployment rate was slightly below 3 percent in the urban areas and slightly above 3 percent in the rural.
Colorado had a slightly higher labor force participation rate, but a slightly higher unemployment rate as well (4.2 percent); its growth rate of 28 percent (414,600 jobs) between 1989 and 1996 was the fifth best in the nation. Two other Rocky Mountain states–Idaho and Montana–also had top-seven growth rates between 1989 and 1996, as well as below-average unemployment rates.
“The whole Rocky Mountain region has had relatively high growth,” notes Thayne Robson, professor with the Bureau of Economic and Business Research at the University of Utah. “This is largely a function of the low costs of doing business in the region. At least in the early part of the boom, wage rates and land prices were modest–although that’s changing significantly now. A vast array of small manufacturers moved into Utah from places on the west coast like California because they can operate here for 70 cents to a dollar-an-hour cheaper. Business services, bill paying centers, and telemarketing operations located here as well.”
“There’s been tremendous growth in the high tech industries in Colorado and the rest of the Rockies,” adds Nancy McCallin, an economist with the Colorado state legislature. “I would guess this is primarily because of the lower wage rate here than, say, technology centers like Silicon Valley or Massachusetts.” Indeed, the 1995 median hourly wage in California was $11.16, compared with $8.91 in Montana, $9.22 in Idaho, $9.41 in Utah, and $10.91 in Colorado.
Like the rest of the nation, most of the expansion in the Rocky Mountain states has been in the service sector. Nationally, the low-wage service industries (including low-wage retail, health, and temporary services) ac-counted for 83.3 percent of all new jobs between 1989 and 1995. Meanwhile, the U.S. lost more than 1.03 million (11.8 percent) of its goods producing jobs during these years, representing almost as many as it lost during all of the previous decade. By 2000, manufacturing work is expected to employ just 20 percent of the labor force (down from 35.9 percent in 1950), while the service industries now employ more than 70 percent of the over-all labor force, up from only 52 percent in 1950. Jobs in the service sector are disproportionately low-wage, no-benefit, and part-time.
If one ignores the relative tightness of the labor market and looks only at the job growth indicators (which, by themselves, say little about workers’ bargaining power), the Far West, Southwest, and Southeast actually perform better as regions than the Rocky Mountains. However, poor scores on the various unemployment indicators lowered many of these states’ composite scores considerably. Only North Carolina and Georgia remain in the top ten of the labor market opportunity composite, while Nevada, Oregon, Texas, Arizona, and Florida make the top twenty.
The Rocky Mountain area’s spectacular job growth and relatively tight labor markets earned the region a second place ranking in the overall labor market opportunity composite. The number one region was the Plains. In general, the Plains states (as well as one Great Lakes state, Wisconsin) had slower job growth rates than the Rockies but even tighter labor markets.
Wisconsin received the number four ranking in labor market opportunity, employing nearly three-quarters of its adult population (the best in the nation) and leaving only 3.5 percent officially unemployed (the fourth lowest). Minnesota ranked third in the labor market category, with the third highest labor force participation rate and a four percent unemployment rate.
“The labor force participation rates are so high that there just can’t be many more people working out in Minnesota and Wisconsin,” says Greg Podczaski, an economist with the Bureau of Labor Statistics (BLS) for the North Central East region. “You have some pockets, say in Madison (Wisconsin), where unemployment is basically zero.”
However, as one moves west into the Dakotas, Nebraska, and Iowa, the business press complaints about chronic labor “shortages” grow even more shrill. Nebraska, North Dakota, and South Dakota rank one, two, and three in average annual unemployment with rates of 2.9, 3.1, and 3.2 percent, respectively. By August 1997, all three states had dipped well below 3 percent. In 1996, Iowa and Missouri followed close behind with rates of 3.8 and 4.6 percent–rates that had fallen to 2.7 and 3.5
percent by August 1997. The Plains states also dominated the other unemployment-related indicators, including youth unemployment and labor force participation rates.
One reason labor markets are so tight in the Plains is that “people are not flocking into Iowa and the Dakotas looking for jobs,” notes Dave McDermott, regional economist with the BLS. “There has been relatively low labor force growth in these states,” McDermott says. “If you have reasonably strong employment growth and modest labor force growth, you’ve got a tight labor market.”
But low unemployment rates say nothing about whether the employment being obtained is paying families what they need to survive. Indeed, very high labor force participation rates and low youth unemployment rates can actually indicate that less-than-sustenance wages are forcing more people into the labor market.
To get at these qualitative issues of job creation and employment, groups in the Plains states and elsewhere are developing their own economic indicators. In Minnesota, for example, the members of JOBS Now–a coalition of sixty religious, labor, and community organizations concerned with the effect of public policy on low and moderate income groups–have developed what they call a “job gap” measure.
“Our members were concerned because they perceived an increase in the working poor that wasn’t really on the public policy screen,” explains JOBS Now Re-search Director Bruce Steuernagel. “We didn’t dispute that there were lots of jobs being created, but nobody was asking if they were paying enough to support families. So, we came up with a living wage for the average family and then went about seeing how many such jobs were available per job seeker.”
In their study of Minnesota’s labor market between 1990 and 1993, the coalition discovered that six job seekers existed for each livable wage job opening and thirty job seekers for each livable wage opening that required a year or less of training.
Another job gap study was done on a regional basis in the Midwest by the Office of Social Policy at the University of Northern Illinois. The study found that for every twenty-two job seekers in the Great Lakes states and Minnesota in 1997, only one job exists that pays at least poverty wages for a family of three. For a job that pays at least 150 percent of the poverty level, the ratio drops to one job for every sixty-four seekers. And for a job that pays what the study defines as a livable wage ($25,907 for a family of three) the ratio was one to ninety-seven.
Despite this apparent surplus of people looking for decent-paying jobs, “employers are begging for skilled people to come out here,” reports Patricia Funk, a consultant working on a job gap study with the Appleseed Center for Law in the Public Interest in Omaha, Nebraska.
Instead of putting resources into training, Paul Kleppner with the University of Northern Illinois reports that employers in Iowa have formed cooperatives and are sending head-hunters out to military bases in Texas to recruit discharged and retiring officers.
“What they’re not doing,” adds Funk, “is saying ‘O.K., we’ve got all of these people who are working real hard and still not making it. Let’s put some resources into training them.”
In classical economic “demand-supply” models, a tight labor market should mean that wages–or the price of labor–will go up. But between 1989 and 1995 the median hourly wages rose in only three of the seven Plains states–and only very modestly. South Dakota saw its hourly median wage rise from $8.03 to $8.49, while Nebraska saw an increase from $8.82 to $8.95. On the national level, the median hourly wage dropped from $10.61 to $10.13. “It’s only in the last year or so really that we’ve seen any notable wage growth at all, and it’s been pretty tepid,” says Jared Bernstein of EPI. “If you keep unemployment low long enough, you’ll see certain wage pressures, but not enough in my thinking to really shift the balance of power more evenly back to workers. There
are a number of factors depressing workers’ bargaining power. Supply and demand by itself isn’t enough to return wage growth to where I think it ought to be–so that the fruits of productivity growth are more evenly distributed.
“You have to look beyond macroeconomic indicators and think about underlying power dynamics that have shifted against workers over the last couple of decades,” Bernstein adds. “Part of it is the decline in unions and that is related to the decline in manufacturing jobs and the increase in low-wage service work. Part of that story is related to increased and unbalanced trade. Also, a decline in the real minimum wage lowered pay at the bottom end of the wage scale and has opened the low road for employers to hire more low-wage labor. This, in tandem with policies that have kept unemployment high from a macro-perspective, have combined to create a climate where it is difficult for workers to seek wage gains.”
Although extremely tight labor markets may be causing the median wages of some Midwestern and Rocky Mountain residents to rise faster than the national average, the Northeast, at least for now, remains the income and earnings capital of the country–as has been the case in all of SRC’s past Climate for Workers reports. In the composite index for earnings and income, four Mid-Atlanticern States–New Jersey, Delaware, Maryland, and the District of Columbia–are in the top ten as well as three New England states–Connecticut, Massachusetts, and New Hampshire. New York just missed the top ten with a ranking of fourteen.
Minnesota and Colorado also make the top ten, but the rest of the Plains and Rocky Mountain states had among the nation’s lowest average annual pay, while two of the Great Lakes states with very tight labor markets–Wisconsin and Indiana–had among the nation’s lowest average annual pay in both the retail and service sectors. (Wisconsin and Indiana performed better in manufacturing pay, probably due to the relatively high union densities in this sector in those states.)
New Jersey, New York, Maryland, D.C., Delaware, Connecticut, and Massachusetts appear again and again in the top ten of almost all of the average annual pay and average per capita income indicators. But there are important caveats to make about these high rankings. For one, all of these states have relatively high costs of living, reducing the purchasing power of the higher incomes (see page 8 and 9). (Unfortunately, average incomes in each state can not be accurately deflated because cost of living indexes are not available on a state-by-state basis.) In addition, averages do not tell the whole story.
|State||Region||Avg. Annual Pay Manufacturing 1996||Rank||Avg. Annual Pay Retail 1996||Rank||Avg.Annual Pay Service 1996||Rank||Avg. Annual Pay 1996 (dollars)||Rank||Change in Avg. Annual Pay 1995-1996||Rank||Per Capita Income 1996||Rank||Long-Term Change in Per Capita Income 1980-1996||Rank||Intermediate Change in Per Capita Income 1990-1996||Composite||Median Income 1995-1996||Rank||Income Inequality*||Rank||% of Persons in Poverty 1995-1996||Rank||Avg. Rank||State Rank|
|New Hampshire||New Eng||36378||16||15535||16||25911||18||27691||20||1089||17||26520||9||7250||7||2236||19||39868||9||7.88||13||5.9||1||12.3||7|
|New Jersey||Mid Atl||44126||5||18366||1||33082||2||35928||4||1394||9||31053||3||8199||4||2083||26||46345||2||9.52||33||8.5||4||8.7||1|
|New York||Mid Atl||41843||7||16890||6||31555||6||36831||2||1893||2||28782||5||7411||5||2030||27||34707||27||13.01||50||16.6||41||18.9||14|
|Rhode Island||New Eng||31250||33||14665||23||25661||19||27194||23||819||34||24765||18||6049||13||1934||32||36695||18||9.45||32||10.8||16||23.0||22|
Sources: Bureau of Labor Statistics; U. S. Department of Commerce, Bureau of the Census; Employee Benefits Research Institute; Bureau of National Affairs; Center for Budget and Policy Priorities; U. S. Department of Labor; Citizens for Tax Justice; Institute on Taxation and
* Income ratio of top 20 percent to bottom 20 percent. A lower number indicates less disparity.
“Average income and pay isn’t a great way to measure because it doesn’t deal with distribution,” notes Frank Mauro with the Fiscal Policy Institute in New York. “New York, for example, is very high and going up in average per capita income, but when you look at median household income, we have been going way down. What that means is that distribution is getting worse here. We’ve found we’re the worst in the nation in income inequality. We’re also one of the few states that is in the top ten in per capita income as well as poverty.”
The Southern Regional Council’s Climate for Workers has long included median household income in its composite earnings and income index, and New York has, indeed, fallen sharply since our 1990 report: from number ten in1988 to number 27 in 1996. To better gauge the extent of income distribution to those at the bottom of the wage scale, this edition of the Climate for Workers has added an income inequality measure (the ratio of the top 20 percent to bottom 20 percent) and poverty rates to its income and earnings composite. New York ranks 50th in income inequality and 41st in poverty rates.
D.C. falls even more precipitously when one looks at median household income and poverty rates. While it ranks number one in all of the average pay and income indicators except for retail, it drops to 36 in median household income (which is more than $3,000 below the national average) and 50 in poverty rates. (Based on figures from past years, D.C. would probably have the worst income inequality, as well, if recent measures were available.) The other Northeastern states with high average incomes and pay fare better in median household income and poverty rates, however. In particular, New Jersey (ranked number one in income and earnings overall) has the second highest median household income ($46,345) and the fourth lowest poverty rate (8.5 percent) in the nation.
“These numbers reflect the complete conversion of the state’s economy from a manufacturing base to a service economy,” argues Neil Upmeyer of the Center for Analysis of Public Issues in New Jersey. “We’ve got the worst part of that conversion out of our system, and our service economy, which is oriented toward telecommunications and the computer industry, has been doing quite well.”
“But the job and income growth has not been spread equally,” Upmeyer adds. “Most of it has occurred in suburban areas–particularly in the Northeastern counties around New York. With the exception of Jersey City, which has become a `back-office’ site for Wall Street, job growth has been non-existent in the old industrial cities with high minority populations, as well as in the three rural counties in the south of the state. Poverty and unemployment are still major issues in these areas and are much higher than the state average.”
Upmeyer further points out that New Jersey’s low poverty rates might understate actual poverty in the state because the Census Bureau uses only one poverty threshold to compute the rates ($7,995 for a single person and $12,516 for a family of three). The Census Bureau does not take differences in cost of living into account, and New Jersey, like most of the Northeastern states, is one of the most expensive places to live in the country (see pages 8 and 9).
As a result of its uneven growth, New Jersey does not rank high (33) in income inequality. Nor do many of the other Northeastern states in the top ten of the “income and earnings” category. Connecticut and Massachusetts rank 36th and 40th in income inequality. Delaware performs the best with a ranking of twelve, perhaps because the state has the most progressive state tax system in the nation, a very low tax burden for households, and very high state expenditures per person.
New Hampshire follows Delaware with a ranking of thirteen in income inequality. Ranked number seven in income and earnings overall, the state also has the lowest poverty rate in the nation and a median household income of about $40,000. But this is not the result of progressive public policy. “It’s difficult to be poor and live in New Hampshire,” argues Richard Mills, an economist with the University of New Hampshire. “If you’re on the low-income end, it’s much easier to live in Massachusetts. New Hampshire is basically suburbia without the urbia–unless you count Boston, which is the biggest labor market. Transportation is difficult. The state doesn’t put a lot of money into social services. And with no state sales or income taxes, property taxes are high, which makes renting or owning housing quite expensive.”
If one looks only at median household income, income inequality, and poverty rates, New Hampshire, Wisconsin, Colorado, Utah, Minnesota, Alaska, and Nevada perform relatively well in all three categories (see chart on pages 8 and 9) . Wisconsin ranks seven in median household income ($41,082), four in income inequality, and six in poverty rates (8.7 percent). Alaska has the highest median wage ($51,074) and the lowest poverty rate (7.7 percent) in the nation. The state also has the second highest annual retail pay in the nation ($18,325). The maintenance of relatively high total union densities in Alaska, as well as in Nevada and Minnesota, probably contribute to the more equal distribution of income there.
Utah’s high labor force participation rate results in a median household income that is almost $2,000 higher than the national average, despite a median hourly wage that is about ten percent below average. The state also
has the third lowest poverty rate and the least amount of income inequality in the nation. According to University of Utah economist Peter Phillips, one of the most important reasons for this lack of poverty and income inequality is the state’s relative racial homogeneity.
“This is a society that is overwhelmingly white, so the type of inequality that is associated with racial and ethnic differences is diminished here,” Phillips said. “The effects of racism are not as prevalent. We do not have a history of industries developing around a racial minority and taking advantage of the disadvantages that minority has.”
Nationally, the poverty rate is about three times higher for African-Americans and Hispanics than it is for non-Hispanic whites. In addition, the median household income for African-Americans and Hispanics is about a third lower. Not surprisingly, then, four of the five and six of ten states with the best income equality have African-American population densities of less than one percent; all of the top-ten states have African-American population densities that are well below average. Five of the eight states with the best income equality have similarly small populations of Hispanics (all less than 2.2 percent).
One section of the U.S. that does have a history of building industries around minorities–the South–ranks last in income inequality and poverty, as well as almost every other income and earnings indicator. In a composite of poverty rates, income inequality, and median household income, all four Southwestern states (Texas, Arizona, New Mexico, and Oklahoma) rank in the bottom ten; another five of the bottom ten are Southeastern states (see chart on page 9). Even worse, Southeastern and Southwestern states represent fifteen of the bottom nineteen in a composite of the three distributional indicators. (Virginia is the only Southern state not in the bottom half.)
The correlation between severe income inequality and minority populations in the South is striking. Every Southeastern state except Kentucky and West Virginia has an above-average African-American population density. In Alabama, Georgia, Louisiana, Mississippi, and South Carolina, about a quarter to a third of the population is black. Three Southwestern states, on the other hand, have larger-than-average Hispanic populations–ranging from 20 percent in Arizona to 39 percent in New Mexico. Furthermore, many of the non-Southern states with the worst income inequality–New York, California, D.C., Illinois, New Jersey–have either African-American or Hispanic populations (or both) that are well above the national average.
While the Southeastern and Southwestern states do have the worst income inequality, the highest poverty rates, and the lowest incomes in the nation, they also have some of the lowest cost of living indexes in the nation (see page 9). In addition, the Census Bureau recently reported that only the South (which includes both the Southeastern and Southwestern states) experienced a significant change in real median household income between 1995 and 1996 ($31,422 to $32,422).
Adding to the difficulties of working families in the Southeast and Southwest are the low percentages of the population insured by employers. Nationally, 63.8 percent of the non-elderly population is insured by employers, but no Southern state except Virginia and North Carolina reached or exceeded this national average. Only 45.6 percent of New Mexico’s population was insured by employers in 1995, while Louisiana ranked second to last with 50.2 percent. Other Southwestern and Southeastern states like Oklahoma, Mississippi, Florida, Texas, Arizona, and Arkansas all ranked in the bottom eleven, with percentages ranging from 55.3 to 60.3 percent. These low percentages in the South represent significant decreases from the late 1980s. Nationally, the percentage has decreased 5.4 percent since 1987, but the Southeastern and Southwestern states are decreasing even faster. New Mexico and Louisiana, for example, decreased 12.8 and 10.5 percent between 989 and 1995.
In contrast to the South, the percentage of the population with employer-based health insurance in the Great Lakes states ranges from 75.6 percent in Wisconsin to 70.4 percent in Ohio. Three New England states (New Hampshire, Connecticut, and Massachusetts) as well as Pennsylvania and New Jersey also have percentages greater than 70 percent and as high as 74.9. In the Great Lakes, the still-relatively-prevalent manufacturing sector doubtless contributes to the higher percentage of people with employer-based health insurance; 73.3 percent of workers in this sector receive insurance compared with only 52 percent in the service sector.
Manufacturing jobs do have a downside, however: much higher incidences of occupational illness and injury. Workers in the “motor vehicles and car bodies” industry, for example, suffer almost four times the rate of injuries and illness as the average for private industry, ranking second only to workers in meat packing plants. As a result, Wisconsin and Michigan have the highest injury and illness incidence rates in the country, with 11.5 incidences per 100 workers in 1994. The only other Great Lakes state for which there is data, Indiana, has the second highest rate in the country (11.3).
|State||Region||%with Employer Health Insurance||Rank||Fatality rate 1996 per 100000 workers||Rank||Nonfatal injury illness rate per 100 fulltime workers||Rank||%of Manufacturing Workers Unionized||Rank||%Change Manu. Workers Unionized||Rank||%of Total Workers Union Members||Rank||%Change Total Unionized 1983-1995||Rank||African Americans*||Rank||Women*||Rank||Avg. Rank||State Rank|
|New Hampshire||New Eng||74.9||2||1.84||2||adjusted||6.5||45||-4.1||9||12.6||27||1.1||1||27.5||adjusted||39.5||5||18.1||8|
|New Jersey||Mid Atl||70.5||10||2.56||6||6.9||4||20.5||14||-10.9||35||21.9||5||-5||33||37||5||38.1||9||12.8||1|
|New York||Mid Atl||62.8||34||3.91||14||5.5||1||22.5||9||-8.5||26||27.7||1||-4.8||32||32.3||12||36.9||13||14.3||4|
|Rhode Island||New Eng||68.5||16||1.28||1||8.5||18||12.6||30||-4.3||10||19.4||12||-2.1||3||36.1||6||38.5||7||13.4||2|
While the Southeast and Southwest have their share of dangerous industries–particularly in agricultural production and food processing (with rates of 9.9 and 13.0)–the regions, as a whole, actually ranked better on this indicator than almost any other. They were helped by particularly low incidence rates in Louisiana (6.2), South Carolina (6.9), Texas (7.1), and Virginia (7.3), all of which ranked in the top ten. North Carolina ranked eleventh with 7.8 and Florida ranked fourteenth with a rate of 8.
There are more than a few reasons to be cautious of the data collected by the Occupation Safety and Health Association (OSHA) and the BLS, however. These statistics are “notoriously incomplete,” says Howard Frumkin, chair of the Department of Environmental and Occupational Health at Emory University in Atlanta. In fact, states with particularly poor OSHA enforcement may actually score better on this indicator simply because employees do not report their injuries for a variety of reasons: because their protection from being fired for reporting the injury or safety violation is inadequate; because their chances of acquiring decent compensation are so low; or because they have not been sufficiently informed about the possible links between their work and various illnesses and injuries.
Until just a few years ago Florida agricultural workers were not given the right to know about the links between the pesticides they were using and health problems. Elaine Roberts with Florida Impact worked on a successful campaign to secure this “right to know” for agricultural workers.
“I think the reason for Florida’s relatively low incidence rate is poor enforcement,” Roberts said. “As we were working on that ‘right-to-know’ campaign trying to get hard numbers, we found that they are not really even monitoring occupational health in agriculture in this state.”
Agriculture is the number two industry in Florida. Tourism is number one–an industry that does have relatively low occupational injuries and illnesses.
Most Southeastern states have federal OSHA programs, which nationally have reduced the number of inspections from 43,377 to 24,024 over the last two years. In part, this reduction stems from a large push to get companies to police themselves through voluntary programs, a trend which is particularly pronounced in the Southern states, says Tom O’Conner with the North Carolina OSHA.
“The Southern federal OSHA region has really been giving companies a lot of leeway in governing them-selves,” O’Conner said. “It’s all a part of this `reinventing government idea’–creating partnerships between business and government. They somehow expect the employers to monitor themselves.”
With its present staffing, federal OSHA would take 167 years to inspect every workplace under its jurisdiction. In Southern states such as Florida, Georgia, and Alabama, the lower number of federal 1 OSHA inspectors means compliance inspections would take even longer.
Underreporting occupational fatalities is not as easy as underreporting injuries and illnesses, although “it can be done,” says Jim Ellenberger with the AFL-CIO’s Occupational Safety and Health Department. In the category of workplace deaths, the Southeastern states perform much more poorly. Only Virginia has a fatality rate that is better than the national average of 4.82 per 100,000 workers. Ten of twelve Southeastern states rank in the bottom half, and five–West Virginia, Mississippi, Kentucky, Alabama, and Arkansas–rank in the bottom twelve.
The Rocky Mountain region performs even worse, however, due to Wyoming, Idaho, and Montana, which had three of the worst fatality rates in the nation in 1996. Averages run between 11.82 deaths per 100,000 full-time workers in Montana to 10.56 in Idaho. Wyoming AFL-CIO State President John Faunce and Montana AFL-CIO Executive Secretary Don Judge cited transportation incidents as the main source of fatalities in their respective states. Indeed, 41 percent of all occupational fatalities occur because of transportation incidents. Faunce and Judge surmised that worse road conditions and longer average drives in their states account for more transportation fatalities. Miners and loggers in these states are also at a higher risk of fatalities. In Alaska, which has a phenomenally high fatality rate of 21.65, state AFL-CIO vice-president Mike Gallagher cited transportation incidents and the fishing industry.
Alaska is also near the bottom (49) in the percent of its manufacturing workforce that is unionized; since 1983 the union density of the state’s manufacturing workforce has declined from 23.3 to 3.8 percent. But now the manufacturing sector is all but nonexistent, Gallagher said, and if one looks at the percent of the total workforce that is unionized (a new indicator in this edition of the Climate for Workers, Alaska now ranks number four at 23.1 percent.
As this example attests, manufacturing is no longer the bedrock of unionism. Nationally, union membership in manufacturing has fallen from 38.9 percent in 1973 to 27.8 percent in 1983 to 17.6 percent in 1995. In the private sector, both transportation and public utility workers (now at 27 percent) and construction workers (19 percent) now have higher union densities.
With 37.7 percent of workers organized, the public sector has the highest proportion of union members by far. Indeed the explosion of unionism in the public sector in the 1960s and 70s (from 5 percent to 40 percent) and its maintenance during the 1980s, has at least somewhat cushioned unionized labor’s fall from a third of the workforce in 1955 to 14.5 percent in 1996. Only 10.2 percent of workers in private industry were unionized in 1996, about what it was in 1930.
All of the states in the top ten in total union membership had a highly organized public sector. The number one state, New York, had a union density of 73.0 percent among its government workers in 1996 (up from 66.5 percent in 1986). New Jersey (number five) and Connecticut (number eight) have also increased their public sector union densities since the 80s, and now have 61.1 and 62.2 percent unionized, respectively.
On a regional basis, the Pacific (Hawaii and Alaska) and Far West slates performed the best in total union membership. The state of Washington was the only Far West state to have high densities in both manufacturing (29.3 percent) and the total workforce (21 percent). Nevada, on the other hand, has a manufacturing union density of only 8.5 percent but a total union density of 20.2 percent, the eighth highest in the nation. What’s more, the state experienced only a 2.2 percent decline in total union membership between 1983 and 1995, the fourth lowest decrease in the nation.
Almost all of the unionization in Nevada has occurred in the metropolitan Las Vegas area. In that city, unions are strong not only in the public sector and the construction industry, but also in the service sector. Other cities in Nevada, such as Reno, are mostly non-union. As a result, kitchen workers in a union hotel earn $9.37 an hour and union bartenders earn $11.88 an hour in Las Vegas, while their non-union colleagues in Reno earn only $6.72 and $6.63, respectively, says Jeff Waddoups, associate professor of economics at the University of Nevada at Las Vegas. The percent of hotel workers in Las Vegas that Waddoups classifies as working poor is about 25 percent less than in Reno. As a state, Nevada has the ninth lowest poverty rate and the tenth best income equality in the nation.
Las Vegas is one of about 100 cities in the nation that the AFL-CIO has designated a “Union City.” In early 1997, the AFL-CIO launched its Union Cities campaign, with the aim of “organizing for change, changing to organize, mobilizing against anti-union employers, building community and community coalitions . . . generating support for the right to organize, [and] making sure that union leadership mirrors the face of the membership.” The key agents of the Union Cities movement are the Central Labor Councils (CLCs), the federation of AFL-CIO unions at the local level. So far, the Las Vegas Central Labor Council is already serving as a model for other Union Cities because of its multi-union, multi-employer organizing drives that have successfully organized hotel and casino workers, hospital workers, and construction workers.
In addition to an increased focus on organization, the Union Cities program also emphasizes “mobilization” and “diversity,” says the head of another model CLC. “Organizing is how you build power, but mobilization is how you exercise power,” Atlanta Labor Council President Stewart Acuff says. “By mobilizing, I mean `street heat’–putting working people on the street in political campaigns, in militant demonstrations, and in rallies. The other point of Union Cities is diversity. The Atlanta Labor Council is one of the few on which white men are not a majority.”
Kirk Adams, the director of the AFL-CIO for the Southern region, also emphasized the growing importance of diversity. “Organizing is more diverse now in the South–it’s no longer just black and white” Adams said. “Historically, labor has seen immigration as a detriment because immigrants can be used to hurt wage rates. But there are also opportunities. If we reach out to the strong Hispanic and Asian communities, who now make up a significant portion of many industries in many parts of the South, we have the opportunity to build coalitions and critical masses. I would guess the poultry industry in the South, which stretches from Florida to Arkansas, is about 50 percent Hispanic.”
While the labor movement in the South may be trying to encourage diversity, the region’s professional specialty, managerial/administrative, technical, and craft jobs remain relatively closed to women and minorities. While some regional differences may be accounted for by fewer such jobs in the region, in most of the Southeast, a lower percentage of the African-American and female labor force possess jobs in these traditional white male occupations than in any other.
Almost all of the Southeastern and Southwestern states are “right-to-work” states and almost none extend collective bargaining rights to state and local public employees. As a result, all but three of these states have union densities that are less than ten percent. North and South Carolina continue to spar for the lowest union membership in the nation (4.2 and 3.3 percent, respectively). This lack of union strength in the South not only hurts workers directly by leading to lower earnings (in 1996, the average union worker made 33 percent more
|State||Region||Insured Unemployed as % of Total Unemp*||Rank||Avg. Unemployment Benefit per Recipient 1996 in dollars**||Rank||State Minimum Wage of 10/1/97 in dollars||Rank||Max. Weekly Benefit for Permanent Total Disability in dollars||Rank||Statutory Protection of Workers+||Rank||Avg Rank||State Rank|
|New Hampshire||New Eng||22.1||46||1480||50||5.15||9||756||3||19.0||6||20.0||20|
|New Jersey||Mid Atl||43.2||14||4287||3||5.05||34||496||21||13.5||28||21.3||22|
|New York||Mid Atl||39.6||20||3669||5||4.25||36||400||37||16.5||15||21.3||22|
|Rhode Island||New Eng||73.6||1||3439||10||5.15||9||503||19||18.5||10||9.8||5|
than a non-union worker), but also diminishes the ability of workers to secure adequate legislative protection for themselves–and to avert the erosion of already-existing protection that’s occurring nationwide in state legislatures.
One protection that has seen significant deterioration is unemployment insurance (UI). In most state systems, prior earnings simultaneously determine whether employees are eligible for UI, how long they can receive it, and how much they can get in benefits. So, as the decline in worker’s earnings began in the 1970s and accelerated in the 80s, employees became increasingly less likely to be eligible for UI or to get their maximum benefits for the full 26 weeks.
To make matters worse, when benefit outlays increased during the recession of the early 1980s because of a prolonged period of high unemployment, a number of states, and most Southern states, reacted by making the ireligibility rules more restrictive. At the same time, the federal government enacted restrictive legislation. When unemployment insurance trust funds swelled in the 1990s, however, labor needed significant bargaining power to get benefits raised and eligibility restrictions loosened. “Instead of letting people back in the UI system, sixteen states, primarily in the South, had trust fund giveaways,” says Mark Baldwin, assistant director of public policy at the AFL-CIO. “Instead of giving more benefits to the unemployed, they gave the money to employers through tax breaks or moratoriums. In states where the labor movement and its allies had some sway, they worked to make sure at least some of the money went to the workers as benefit increases. In states where we didn’t have any strength, it was just a flat-out giveaway. That general story plays out particularly strongly in the Southern states, but, of course, this has dampened benefit increases in all states due to interstate competition. Nobody wants to be known in the business community as the state with the best UI system.”
If former employees leave a job for certain reasons or fail a drug test (which are being used more and more in UI systems, Baldwin says), states deny UI benefits for a certain number of weeks–a number that has been increasing. “Now in most of your Southern states, you have various durational penalties–penalties in which former employees are not eligible for the entire period of unemployment,” Baldwin said. “In states like Texas, all the penalties are durational, which is why people don’t get benefits there.”
Indeed, less than a quarter of the unemployed in Texas receive UI benefits, but several states in the Southwest and Southeast rank even lower. New Mexico and Arizona only had 19.0 and 19.1 percent of their unemployed insured in 1996. Louisiana, Virginia, and Georgia had between 20.2 and 23.3 percent.
What’s more, these low numbers measure only the percentage of the unemployed eligible for unemployment insurance in the average week, not the percentage that actually gets benefits. As a result, these numbers overestimate the actual number of people covered by anywhere from 10 to 15 percent–and probably more in states with severe penalties.
By contrast, 73.5 percent of the unemployed in Rhode Island received benefits in 1996. While this number is much higher than any other state (the second highest was 57.1 percent in Alaska), all but one state in both New England and the Far West have percentages greater than 40 percent, as do better than half the states in the Mid-Atlantic and the Great Lakes region. Nationally, only about one in three unemployed workers received unemployment insurance in 1996, down from three-quarters of workers in 1975 and half of them in 1992.
But even in those states where more of the unemployed are receiving UI, the benefits are not being evenly distributed among all workers, notes Maurice Emsellem, staff attorney with the National Employment Law Project in New York.
“The unemployment compensation system tends to leave out women and low-wage workers, so we have a big push to change laws in that area,” Emsellum explains. “Of course, lower wages increase the likelihood of being ineligible for UI, but low-wage and women workers are also disproportionately part-time workers, who are likewise more likely to be ineligible. Laws that exclude people who get fired when they miss work because of various family crises–say, a sick child–disproportionately affect women, too. “But now is a good time to change this,” Emsellem argues. “The trust funds are in good shape and the employers are trying to raid them. At the same time, a lot of women are being forced into the low-wage labor market due to welfare reform. It’s a good time to bring up the issue of fairness.”
While workers in at least a few states appears to be on the offensive with unemployment compensation, it is on the defensive almost everywhere when it comes to compensation for workers injured on the job. Since the mid-1980s, state legislatures in twenty-eight states have reduced the amount of benefits injured workers can collect, while benefits have remained about the same in sixteen other states and D.C.–though not without vigilant battles on the part of the labor movement. Only six states have increased benefits.
As a result, between 1991 and 1994, workers compensation benefits paid to workers declined almost 25 percent nationally, representing the first time workers compensation benefit payments declined for three successive years since the 1930s.
“The downward trend of cutting back on workers’ compensation coverage began here in Texas a number of years ago, and it has now become a competing annual cycle where other states try to project themselves as business friendly by cutting benefits,” says Kirk Adams of the Southern regional office of the AFL-CIO. “Of course, it’s portrayed as `we’re trying to attract jobs,’ and this attracts moderates who are usually our allies against more explicitly anti-worker measures. The AFL-CIO has been paralyzed in most Southern states because we just don’t have the density across the legislative spectrum, and we can’t really form a coalition with moderates.”
North Carolina has the highest maximum weekly benefit for total permanent disability in the South (due in part to “Governor (Jim) Hunt saving us several times,” Adams said), but even its $512 weekly benefit is barely above the national average of $503.49. Every other Southern state is below this average, most well below. Mississippi’s $270-a-week benefits is the lowest in the country.
The workers’ compensation-cutting epidemic has infected not only the low-benefit states in the Southeast and Southwest. In New England, where four states are in the top ten, cuts are also rampant. New Hampshire, with the third-highest weekly benefits in the country ($756) has seen its workers compensation benefit outlays decrease 40 percent over the last four years. In Massachusetts, ranked eighth with maximum disability benefits of $631, a series of subtle and not-so-subtle provisions reduced the average size of a sum settlement down from $27,040 in 1991 to $18,860 in 1992.
Movements are stirring, however, to reverse this trend. In Massachusetts, several bills have been introduced in the state legislature to bring workers compensation benefits back to their pre-cut levels. In Ohio, unions and community activists blocked the implementation of a worker’s compensation bill that would have effectively gutted the state’s current system. By collecting more than 400,000 signatures and forcing a November referendum–the state’s first referendum in more than half a century–this coalition defeated the bill. In South Carolina, labor organizations succeeded in getting legislation passed to make employer participation in the state’s workers’ compensation system mandatory. (Previously, South Carolina was one of three states–including Texas and New Jersey–in which employer participation was voluntary.)
The Carolina Alliance for Fair Employment (CAFE)has been less successful in its fight to secure workers’ choice of doctor in South Carolina, an issue which state coordinator Charles Taylor says is “the real key to controlling the system.” Currently, workers in South Carolina must go to a doctor selected by the employer, and this doctor makes all of the decisions that affect compensation payments
Nationally, only twenty-four states ostensibly guarantee employees the right to choose their own doctor. But Jim Ellenberger, assistant director of the OSH department at the AFL-CIO, says the recent rush of most states into managed care renders this statutory protection practically irrelevant.
“If you mandate managed care for workers’ compensation, the worker has to go to the managed care organization chosen by the insurance company and employer anyway,” Ellenberger points out. “And the majority of employee-choice states are now also managed care states.”
More positive developments have occurred on the minimum wage front. Before the U.S. Congress voted to increase the minimum wage to $5.15 an hour in 1997, the real value of the minimum wage was $4.12, compared with $5.97 in 1979 and about $6.50 in the late 1960s (all in 1995 dollars). Even though the purchasing power of the minimum wage is still far less than what it was twenty or thirty years ago, close to ten million workers are now enjoying the ninety-cent raise–an increase that has so far not caused the “disemployment effects” that its opponents predicted. The vast majority of beneficiaries are not middle class teenagers, but adults from families in the bottom two-fifths of the income scale. About three-fifths of the beneficiaries are women.
Still, the federal minimum wage does not cover all employees. There is a complicated list of exceptions that includes employees at certain amusement and recreational establishments, certain retail establishment employees, certain agricultural employees, and certain domestic workers, to name only a few. However, almost two-thirds of the states have passed their own minimum wage laws that meet or exceed the federal level. Eight states–D.C., Oregon, California, Alaska, Hawaii, Massachusetts, Vermont, and Connecticut–have passed minimum wages anywhere from three cents to a dollar higher than the federal minimum.
The remaining one-third of states, however, have either lower state minimum wages (ranging from $5.05 to $1.60) or no minimum wage at all. All of the states with no minimum wage are in the Southeast and Southwest.
No one would contend, though, that a person could support her or his family working full-time at even the
|State||Region||Infant Mortality 1995||Rank||E/J ratio 1995*||Rank||Per Capita Expenditure 1995||Rank||Tax Burden on Middle 20% 1995**||Rank||Progessivity of State Tax 1995***||Rank||Revenue per Student 1993-1994||Rank||% of 18 to 25 year olds graduating high school 1994||Rank||Physicians per 10,000 1995||Rank||% without Health Insurance 1996||Rank||Crime Rate per 100,000 1995||Rank||Cost of Living 1997*||Rank||Avg. Rank||State Rank|
|New Hampshire||New Eng||5.5||3||18.0||6||845.82||48||6.1||4||2.5||43||5884.21||23||86.9||33||19.8||21||9.5||4||2655||2||105.7||31||17.71||9|
|Rhode Island||New Eng||7.2||19||30.1||11||1657.58||9||10.4||38||1.2||12||7047.65||8||89.4||21||26.7||6||9.9||8||4245||12||106.7||33||15.14||3|
highest state minimum wage in the nation–$6.15 an hour in D.C. In response, the labor movement, in coalition with community and religious organizations, has been launching “living wage” campaigns in cities throughout the country, including Baltimore, Jersey City, New York, Milwaukee, Los Angeles, and Chicago. Setting minimums in the $7 to $8 range, the living wage ordinances in existence usually apply only to the employees of the city and to city contractors, but the higher wages have been putting upward pressure on the entire low-wage market.
“With such a tight labor market, it’s a good time for these campaigns,” says Kirk Adams, who has seen a campaign in Houston fail, but is currently assisting another one in New Orleans. “People are willing to take chances because they know they can get a low wage job anywhere.”
The labor movement is also involved in the perennial fights against attempts to pass “right-to-work” laws–particularly heated this year in Colorado, Montana, and New Hampshire. The “Statutory Protection for Workers” indicator includes “Right-to-Work” as well as a host of other labor laws, including Anti-Discrimination, Equal Pay, Whistleblower Protection, Right-to-Know, Overtime, and Sexual Harassment laws. (See the appendix for details). The results: New England has the best statutory protection in the country by far. The region’s states make up four of the top six and five of the top ten states. Three Great Lakes states were also in the top ten, as well as Minnesota. Tow Far West states were in the top ten, and one, California, scored the highest of all the states, having sixteen of the seventeen laws on the books (and no “right-to work” law).
Eight Southeastern and Southwestern state are in the bottom eleven in the statutory protection indicator. Alabama had only three of the seventeen laws and Mississippi has no such laws; both have right-to-work laws.
Recently, the labor movement has grown increasingly interested in moving beyond the annual battles over legislative protections, wages, and benefits. Under the leadership of president John Sweeney, the central headquarters of the AFL-CIO has been telling its affiliates to actively defy the appellation of “special interest group” by mobilizing around a wider array of community issues that affect all working families. Central Labor Councils in the Union Cities are being encouraged to form a more extensive net work of coalitions with community and religious organizations working for a cleaner environment, a less regressive state and local tax system, higher quality education, more inclusive and comprehensive health care.
This new direction for the labor movement, makes the “quality of life” category particularly appropriate. This category attempts to rank the quality of life in the states through a variety of indicators related to the environment, education, taxes, public spending, health care, crime rates, and the cost of living. Combining all of the indicators, New England does the best by far as a region: all six of the region’s states are in the top nine.
Similarly, New England ranks number one as a region in overall labor climate. Other states in the Northeast, Mid-Atlantic, and Midwest with high quality of life scores–Wisconsin, Minnesota, Delaware, New Jersey, Maryland–also score well in overall labor climate.
The Southeast and Southwest, on the other hand, rank last and second-to-last as regions in quality of life, as they do in the overall rankings. Indeed, the bottom twelve in the quality of life composite and bottom ten in the overall labor climate composite are all Southeastern and Southwestern states. Another fast-growing region–the Rockies–ranks sixth (out of nine regions) in quality of life and seventh overall.
As it stands, however, the fast-growing states in the Southeast, Southwest, and Rockies are serving as the maximum thresholds to which the rest of the nation must fall. The results of this race to the bottom: between 1989 and 1995, the median family income in the high-wage Northeast decreased by almost three times the national average, so that by 1995 the median income was $4,618 dollars below its 1989 peak, when controlling for inflation. States in New England and the Mid-Atlantic, as well as those in the Far West and Pacific regions, also experienced some of the greatest increases in poverty rates between 1989 and 1994–increases of 2.5, 3 and 4 percent, respectively, compared to 1.7 percent nationally.
Instead of pressuring policy makers in the states of the Northeast, the Midwest, the Far West, and the Pacific to lower their relatively higher wage and benefits, weaken their stronger protections for workers, diminish the greater power of their employees to bargain with employers, and eliminate the social provisions that make for their higher quality of life, a society that truly worked in the interest of its members would hold these states up as minimum thresholds.
Preston Quesenberry, former editorial assistant for Southern Changes, is now a media analyst at McKinney McDowell Associates in Washington, tracking media cover-age of affirmative action. Kenneth Rose assisted with this research while a community development work fellow at the University of Alabama at Birmingham.
*. * Income ratio of top 20 percent to bottom 20 percent. A lower number indicates less disparity.
*. *Indicates percent of African Americans or women in traditional white male jobs classified as Executive, Administrative and management; Professional Speciality; Technicians and Related Support and Precision Production, Craft and Repair. Note: Adjusted refers to missing data for a state; ranks are adjusted according to most recent available figures where possible.
*. * Percent of unemployed who are eligible for insurance and applied for benefits in a typical week.
**. ** Average weekly benefit multiplied by average benefit duration.
. + This measure scores states for their worker protection legislation including anti-discrimination, drug tests, family leave, anti-AIDS discrimination, sexual harrassment, right to work, time off to voe, minimum wage, pay for overtime, equal pay, maximum hours, right to know, whistleblower protection, and anti-smoking.