It’s called the “Southern Economic Development Model” (SEDM) and has been at the core of GOP economic strategy ever since the days of Ronald Reagan. While they don’t use those words to describe their plan, and neither did the authors of Project 2025, this model is foundational to conservative economic theory and has been since the days of slavery.
The SEDM explicitly works to:
— Maintain a permanent economic underclass of people living on the edge of poverty,
— Rigidify racial and gender barriers to class mobility to lock in women and people of color,
— Provide a low-cost labor force to employers,
— Prevent unions or any other advocates for workers’ rights to function,
— Shift the tax burden to the working poor and what’s left of the middle class while keeping taxes on the morbidly rich extremely low,
— Protect the privileges, power, and wealth of the (mostly white and male) economic overclass,
— Ghettoize public education and raise the cost of college to make social and economic mobility difficult,
— Empower and subsidize churches to take over public welfare functions like food, housing, and care for indigent people,
— Allow corporations to increase profits by dumping their waste products into the air and water,
— Subsidize those industries that financially support the political power structure, and,
— Heavily use actual slave labor.
For hardcore policy wonks, the Economic Policy Institute (EPI) did a deep dive into the SEDM last month: here’s how it works in summary.
Republicans claim that by offering low-cost non-union labor and little to no regulatory oversight to massive corporations, they’re able to “attract business to the region.” This, they promise, will cause (paraphrasing President Kennedy out of context) “a rising tide that lifts all boats.”
Somehow, though, the only people who own boats that rise are those of the business owners and senior executives. The permanent economic underclass is key to maintaining this system with its roots in the old plantation system; that’s why Mississippi, Louisiana, Alabama, Tennessee, and South Carolina have no minimum wage, Georgia’s is $5.15/hour, and most other GOP states use the federal minimum wage of $7.25/hour and $2.13/hour for tipped workers.
It’s thus no coincidence that ten out of the 20 Republican-run states that only use the federal minimum wage are in the Old South.
Anti-union or “right to work for less” efforts and laws are another key to the SEDM; the failed unionization effort last month at the Alabama Mercedes factory was a key victory for the GOP. Unions, after all, balance the power relationship between management and workers; promote higher wages and benefits; support workplace and product safety regulations; advance racial and gender equality; boost social mobility; and have historically been the most effective force for creating a healthy middle class.
Unionization, however, is antithetical to creating and maintaining a permanent economic underclass, which is why, as EPI notes, “while union coverage rates stand at 11.2% nationally, rates in 2023 were as low as 3.0% in South Carolina, 3.3% in North Carolina, 5.2% in Louisiana, and 5.4% in Texas and Georgia.”
Unions also make wage theft more difficult, essentially forcing government to defend workers who’ve been ripped off by their employers. That’s why Florida doesn’t even have a Department of Labor (it was dismantled by Republican Governor Jeb Bush in 2002), and the DOLs in Alabama, Delaware, Georgia, Louisiana, Mississippi, and South Carolina no longer bother to enforce wage theft laws or recover stolen money for workers.
Another key to the SEDM is to end regulation of corporate “externalities,” a fancy word for the pollution that most governments in the developed world require corporations to pay to prevent or clean up. “Cancer Alley” is probably the most famous example of this at work: that stretch from west Texas to New Orleans has more than 200 refineries and chemical plants pouring poison into the air resulting in downwind communities having a 7 to 21 times greater exposure to these substances. And high rates of cancer: Southern corporate profits are boosted by sick people.
Between 2008 and 2018, EPI documents, funding for state environmental agencies was “cut [in Texas and Louisiana] by 35.2% and 34.8% respectively.… Funding was down by 33.7% in North Carolina, 32.8% in Delaware, 20.8% in Georgia, 20.3% in Tennessee, and 10% in Alabama.”
To keep income taxes low on the very wealthy, the SEDM calls for shifting as much of the taxpaying responsibility away from high-income individuals and dumping it instead on the working poor and middle class. This is done by either ending or gutting the income tax (Texas, Florida, and Tennessee have no income tax) and shifting to sales tax, property taxes, fees, and fines.
Nationally, for example, sales taxes provide 34.4% of state and local revenue, but in the SEDM states that burden is radically shifted to consumers: Tennessee, for example, gets 56.6% of their revenue from sales tax, Louisiana 53.3%, Florida 50.9%, Arkansas 49.6%, Alabama 48%, and Mississippi 45.5%. Fees for registering cars, obtaining drivers’ and professional licenses, tolls, traffic and other fines, and permits for home improvements all add to the load carried by average working people.
Republicans argue that keeping taxes low on “job creators” encourages them to “create more jobs,” but that old canard hasn’t really been taken seriously by anybody since Reagan first rolled it out in 1981. It does work to fill their money bins, though, and helps cover the cost of their (tax deductible) private jets, clubs, and yachts.
Another way the SEDM maintains a low-wage workforce is by preventing young people from getting the kind of good education that would enable them to move up and out of their economic and social class. Voucher systems to gut public education, villainization of unionized teachers and librarians, and increasing college tuition all work together to maintain high levels of functional illiteracy. Fifty-four percent of Americans have a literacy rate that doesn’t exceed sixth grade, with the nation’s worst illiteracy mostly in the Old South.
Imposing this limitation against economic mobility on women is also vital to the SEDM. Southern states are famous for their lack of female representation in state legislatures (West Virginia 13%, Tennessee 14%, Mississippi and South Carolina 15%, Alabama and Louisiana 18%), and the states that have most aggressively limited access to abortion and reproductive healthcare (designed to keep women out of the workplace and dependent on men) are entirely Republican-controlled.
Perhaps the most important part of the SEDM pushed by Republicans and Project 2025 is gutting the social safety net. Wealthy rightwingers have complained since FDR’s New Deal of the 1930s that transferring wealth from them to poor and middle-class people is socialism, the first step toward a complete communist tyranny in the United States. It’s an article of faith for today’s GOP.
Weekly unemployment benefits, for example, are lowest in “Mississippi ($235), Alabama ($275), Florida ($275), Louisiana ($275), Tennessee ($275), South Carolina ($326), and North Carolina ($350)” with Southern states setting the maximum number of weeks you can draw benefits at 12 in Florida, North Carolina, and Kentucky, 14 in Alabama and Georgia, and a mere 16 weeks in Oklahoma and Arkansas.
While only 3.3% of children in the Northeast lack health insurance, for the Southern states that number more than doubles to 7.7%. Ten states using the SEDM still refuse to expand Medicaid to cover all state residents living and working in poverty, including Mississippi, Alabama, Georgia, South Carolina, Florida, Tennessee, and Texas.
The main benefit to employers of this weak social safety net is that workers are increasingly desperate for wages — any sort of wages — and even the paltriest of benefits to keep their heads above water economically. As a result, they’re far more likely to tolerate exploitative workplace conditions, underpaid work, and wage theft.
Finally, the SEDM makes aggressive use of the 13th Amendment’s legalization of slavery. That’s not a metaphor: the Amendment says, “Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.” [emphasis added]
That “except as punishment for crime” is the key. While Iceland’s and Japan’s incarceration rates are 36 for every 100,000 people, Finland and Norway come in at 51, Ireland and Canada at 88, there are 664 people in prison in America for every 100,000 people. No other developed country even comes close, because no other developed country also allows legalized slavery under color of law.
Fully 800,000 (out of a total 1.2 million prisoners) Americans are currently held in conditions of slave labor in American jails and prisons, most working for private prison corporations that profitably insource work and unfairly compete against normal American companies. Particularly in the South, this workforce is largely Black and Hispanic.
As the ACLU documented for the EPI, “The vast majority of work done by prisoners in Alabama, Arkansas, Florida, Georgia, Mississippi, South Carolina, and Texas is unpaid.” Literal slave labor, in other words. It’s a international scandal, but it’s also an important part of this development model that was, after all, first grounded in chattel slavery.
The Christian white supremacist roots of the SEDM worldview are best summed up by the lobbyist and head of the Southern Committee to Uphold the Constitution, Vance Muse — the inventor of the modern “right to work for less” model and advocate for the Southern Economic Development Model — who famously proclaimed in 1944, just days after Arkansas and Florida became the first states to adopt his anti-union legislation, that it was all about keeping Blacks and Jews in their places to protect the power and privileges of wealthy white people.
So, if you want to see what Republicans have in mind for the rest of America if Trump or another Republican becomes president and they can hold onto Congress, just visit the Old South. Or, as today’s MAGA GOP would call it, “the New Model.”
The Onion founding editor Scott Dikkers. (Courtesy)
Justice Samuel Alito (Photo via Erin Schaff / for AFP)
