Middle Atlantic States: Fight Against Stagnation

April 4, 1980

Report Outline
Regional Slump in the Seventies
From Colonies to Megastates
Prospects for the Eighties
Special Focus

Regional Slump in the Seventies

Economic Decline's Contrast to the South

The different regions of the United States have not fared equally during the economic turbulence of recent years. For the “Sun Belt” states of the South and Southwest, the Seventies brought unprecedented economic growth. For the Middle Atlantic region, the decade featured high unemployment, low growth in population, employment and income, and low rates of capital investment. Were these economic problems caused by the gains in the Sun Belt? One theory is that the industries that deserted the industrial North — especially New York, Pennsylvania and New Jersey — were enticed by the South's favorable economic climate, which included low taxes on businesses, a preponderance of “right to work” laws and the overall weakness of organized labor. In short, the Sun Belt region was thought to be “booming in great part because it's pro-business and the northern cities, by and large, aren't.”

Business Week magazine in 1976 characterized the situation as a “civil war between the states,” with the economic arena as the battlefield in a “struggle for income, jobs, people and capital.” That “war” continues, as perceived by a number of business writers and even sociologists. In recent years there has been an outpouring of articles, studies and reports, and at least two books, chronicling a shift of economic power from North to South. Lobbying groups like the Northeast-Midwest Congressional Coalition and the Council for Northeast Economic Action were set up to advance the economic interests of the North.

By some accounts, the North's economic slippage has been going on for decades and — except for New England where an economic revival of sorts is taking hold — has worsened since the 1974–75 recession. But not everyone accepts the thesis that the Sun Belt's success has come at the expense of the northern states. James Lothian, a senior consultant with the Fantus Co., an industrial location consulting firm, calls it “a myth” that “all the industries in the North are relocating in the South.” Although many northern plants have expanded their capacity in the South, “there have been very few instances where a plant in the North packs up totally and moves to the South.”

ISSUE TRACKER for Related Reports
Economic Development
Manufacturing and Industrial Production
Regional Planning and Urbanization