Workers and families have not benefited from the economic development model in place across the South. Arkansas is no exception.
According to a new, comprehensive report from the Economic Policy Institute, many states in the South prioritize business interests and the wealthy over workers and ordinary citizens. This economic development model is characterized by low wages, low taxes, few regulations on businesses, few labor protections, a weak social safety net, and opposition to unions.
The gross domestic product, or GDP, is a measure of economic prosperity. GDP measures the total value of all goods and services within a country or state. The per-worker GDP for the United States overall is $111,448. Nine of the 15 states with the lowest per-worker GDP are in the South. Arkansas has a per-worker GDP of $82,916, nearly 26% lower than the nation as a whole. The economies of Arkansas and other Southern states are not thriving.
Governor Sanders often touts Arkansas job growth (such as in a press release on May 17 of this year). This job growth is proclaimed to help all Arkansans. But the job growth across the South is largely driven by population growth, not economic growth. Cumulative job growth here has lagged cumulative population growth, especially after the Great Recession. This contrasts with the Midwest and Northeast, where job growth has outpaced population growth. Right here in Arkansas, the working-age population (those 16 and older) has grown 15.3% over the past two decades. Over the same period, total jobs in the state have only grown by 10.6%.
The prime-age employment-to-population ratio, or EPOP, measures the share of workers ages 25 to 54 with a job. In the United States, this EPOP is 78.2%. Among the 10 states with the lowest EPOPs, seven of them are Southern. Arkansas has an EPOP of 75.2%, ranking sixth worst. While at first glance this 3% decrease from the national average does not seem large, it does indicate that almost a quarter, or more than 250,000 of our prime-age population, is out of work.
The picture is stark for new job entrants, ages 18 to 24, as well. Just in time for Labor Day, the Federal Reserve Bank of St. Louis has released a study of young workers who are “disconnected”: those without jobs and not in school. The national average is 16.8%. In Arkansas, however, 17.6% of young workers are disconnected. This situation is much worse in Arkansas metropolitan areas; Fort Smith comes in at 24.6%, Pine Bluff at 21.9%, and Little Rock at 19.0%. This is more evidence that the Southern economic development strategy is not working, or Arkansas and its neighbors would lead the country.
The Southern economic development model suggests that everyone benefits when income taxes, government expenditures, and labor unions are depressed. But poverty rates across the South demonstrate this logic is flawed, as the majority of Southern States have poverty rates higher than the national average.
In Arkansas, 16.2% of the population fall below the federal poverty level. We are even worse when it comes to child poverty, with 22% of children — more than 1 in 5 — living in poverty. According to the Annie E. Casey Foundation’s 2024 Kids Count Data Book, Arkansas ranks 45th in overall child well-being. As we rank even worse in child economic well-being (46th), the economic development strategy is not working for our children.
According to the Encyclopedia of Arkansas, the state was one of the first to enact a “right to work” measure. Arkansas Constitutional Amendment 34 was ratified by the people, 105,300 to 87,652, in 1944. However, the election was marked by a high number of voting irregularities. In many counties along the Mississippi River, planters brought poll-tax receipts in bulk, which allowed them to vote for their sharecroppers. And local officials delayed reporting results to ensure the amendment had enough votes to pass. The Arkansas labor movement has been in decline since, threatened by additional acts of the state legislature.
Perhaps it is not surprising that union workers are much more likely to have health insurance (74% to 45%) and retirement benefits (85% to 53%). Less known: attacks on unions lead to income inequality. As union membership rates decrease, the share of overall income going to the top 10% earners increases proportionately.
Most important to disprove the Southern economic development strategy, right-to-work initiatives do not create additional jobs; over the past three decades, there are no measurable employment advantages between right-to-work and non-right-to-work states.
In another Labor Day report, Oxfam — the global organization fighting inequality, poverty, and injustice — examines the best and worst states to work in the United States. Oxfam scored all 50 states, Puerto Rico, and the District of Columbia according to three policy areas: wage policies, worker protections, and rights to organize. Arkansas and its immediate southern neighbors (Oklahoma, Texas, Louisiana, Mississippi, and Tennessee) average 43rd in overall ranking. Not one comes in higher than 36th. The three lowest ranked states — North Carolina, Mississippi, and Georgia — are all in the South. And while Arkansas is ranked 30th in wage policies, notably on the strength of its citizen-initiated higher minimum wage, it ranks 46th in worker protections and 48th in rights to organize.
Luckily, we know how to turn this around. On this Labor Day, we should commit to ending the current Southern economic development strategy and enact policies that support workers. After all it is workers who build the Arkansas economy. When workers do well, so does the state economy. It’s time we enable the workforce, not discourage it.