Wage Differentials Between the States: The Effect of Region and Unionization

Prior to World War II the United States\u27 South lagged far behind its northern counterparts in terms of industrialization and economic growth. In fact, in the 1940\u27s Franklin Delano Roosevelt proclaimed the South the nation\u27s number one economic problem (Cobb,1982). However, in 25 short years the region found itself in a dramatic spurt of economic growth that changed the region\u27s image into the more flattering Sunbelt South. From 1960- 1975 Gross Regional Product nearly doubled and industrial output more than doubled (Cobb, 1982). Dixie\u27s growth was not only limited to domestic firms, but by the 1970\u27s the region was attracting around half of the United States\u27 foreign industrial investment (Cobb, 1982). By 1978, many Southern states were attracting as much as $1 billion annually from foreign investments, led by South Carolina, North Carolina, and Virginia (Cobb, 1984). Manufacturing growth continued throughout the nineties. In the beginning of the decade eight of the top ten states, in terms of new manufacturing plants, were in the South (Applebome 1996)