For much of America’s history, the South has been a laggard, a poor region weighed down by intense racism and reactionary politics, lacking both industry and newcomers, foreign or domestic, to imbue it with dynamism and energy. But that’s changing — big time. Far from singing romantic paeans to Jefferson Davis, the Confederacy’s president, or celebrating his (blessedly) “lost cause,” the South increasingly embraces the very attitudes and policies that once made the North dominant.
Progressives like Chicago Mayor Brandon Johnson complain that America looks the way it would “if the Confederacy” had won. Yet the South’s triumph today is one the old rebels would barely recognize. The region, to be sure, still has more than its share of Blimpish nativists and religious fanatics. Even so, more people, including African-Americans, led by those with college degrees, now flock there in search of opportunity.
This marks a huge historical turnaround. Well into the Twenties and Thirties, the South was lagging and losing migrants to the North and the West. Slavery, and then segregation, notes historian Gavin Wright, kept down labor costs and, with them, the incentive for innovation and labor-saving technology. The South was almost its “own country,” as Wright says, a poor appendage to a much richer, more dynamic nation.
But now, the South is capturing cutting-edge industries, drawing in capital as well as a swelling tide of migrants from within the country and abroad. Overall, the southeast quadrant of the country is now the most dominant economic region, and since 2018 has produced almost all the country’s population growth and half its new jobs, according to the Texas Stock Exchange.
By contrast, it’s the Northern and Pacific cities that are pursuing John C. Calhoun-style nullification to resist Washington. And the Trump administration has taken note of this. Recently, Treasury Secretary Scott Bessent declared that “we want the US to be more like Florida and less like New York.” With Gotham about to embrace socialism and a globalized intifada, things look good for Trump Central in Palm Beach, the new favored boomtown for millionaires and billionaires.
Of course, inertia still works for the North and California after decades of dominance. Even today, per-capita incomes remain higher in the Northeast and California, but this likely reflects fewer families and higher costs, which often wipe out income gains, particularly for minorities and the working class. The income disparity has been receding since the Forties, as the South grows in power and influence and shifts to sophisticated businesses like aerospace, software, and finance — once unthinkable for the agrarian region.
One key factor to the Southern ascendency has been investment in education, which has long been a critical weak spot, with average expenditures half the national average well into the Forties. With an economy built around labor-intensive farming and light manufacturing, generations of ambitious Southerners sought opportunities elsewhere. Many headed to colleges in the Northeast and West Coast. But today, that flow has reversed, with ever more college students choosing to attend schools in the South.
Perhaps even more important, the once widely admired Northeastern and particularly California grade schools, although still better funded, have declined relative to those in Florida or Texas. Schools in many states have become increasingly forums of indoctrination for “social justice,” with even long-time leader Massachusetts eliminating honors programs.
In contrast, the South, and even truly backward states like Mississippi, are focused on improving their long-woeful grade schools. A strong focus on basic reading and math skills has led to dramatic improvements in both. At the same time, many of these states — South Carolina, Texas, Arkansas, and Tennessee — have developed a system of trade schools for those who don’t wish to go to college. Eight of the 10 best states for this kind of education are located in the South.
This focus makes sense, since the South has enjoyed the fastest growth in US manufacturing in the past five years, much of it stimulated by foreign direct investment. Last year, South Carolina led the nation in the share of jobs created by overseas firms, with Kentucky and Alabama seeing strong growth, as well.
These investments are helping drive the South’s growing dominance in tech-forward industries like aerospace. The Lone Star State, in particular, is considered by PwC to be the best state for aerospace manufacturing and the Texans are now tied with Californians for the most Tier One research universities. SpaceX and Blue Origin each have large test facilities in Van Horn and Brownsville, respectively, including one to be used for an upcoming NASA launch. In addition, Texas has two spaceports, one in Midland and the other in Houston.
As Bryan Chambers, who runs the Capital Factory in Austin, points out, these firms, many in defense, are headed south, as they require factory space, skilled workers, reasonable housing costs, and, as one executive told me, “good places to blow things up.” It helps that Austin is home to the Army Futures Command. Texas also has the talent, ranking second behind California in the number of aerospace engineers. Astonishingly, Alabama ranks fourth — an achievement that would have horrified Confederate agrarian ideologues who loathed mechanized industry, if they were around to see it.
Like SpaceX, many of the most innovative California aerospace firms, like Jet Zero, based in Long Beach, tend to move to the South as they grow. The innovative low-emission jet manufacturer recently announced a $4.7 billion investment in Greensboro, NC, that will employ more than 14,000 people over the next decade. The company also indicated that it would move its headquarters to the same city, once the plant is finished.
A similar trajectory is taking place in semiconductors and artificial intelligence. Between 2022 and 2023, Texas led in new tech jobs, Florida came second, and Georgia, Tennessee, and North Carolina also made significant gains; California was basically flat. According to the Computer Technology Association, Texas, Mississippi, Tennessee, and South Carolina are projected to enjoy the biggest growth in tech over the next decade.
“The South has enjoyed the fastest growth in US manufacturing.”
With the rise of AI and quantum computing, tech companies facing soaring need for affordable electricity will likely look to the South, which has generally lower electricity prices. That will allow the likes of NVIDIA to fabricate chips, supercomputers, and data centers for AI in the South. By contrast, states like New York and California suffer the highest energy prices in the United States.
Southern boosters are also aiming a shot at the last great bastions of the California-Northeast economy, such as entertainment. Georgia, Nashville, and Austin have all become major players as Hollywood retreats and loses both its historic allure as well as jobs. Surging media hub Atlanta may not have LA’s great weather, but it is far more affordable and closer to the national mainstream culturally.
An even more deadly blow could come in finance, the other bulwark of the blue-state economies. The recently established Dallas-based Texas Stock Exchange, scheduled to open next year, has raised more than $161 million from such firms as BlackRock, Citadel Securities, Charles Schwab, Dell Family Office Management, Fortress, Jump Trading, Squarepoint, Susquehanna Private Equity Investments, Tower Research, and other market leaders.
Nicole Chambers, the Texas Stock Exchange’s global managing director, only smiles when I bring up the fact that New York seems poised to elect a socialist as mayor. She sees the new exchange as providing a more business-friendly environment for both small investors and companies. “We want to be a Wall Street for all,” the San Diego native suggests. This is part of the whole “y’all street” meme, which sees Texas capitalism as a more open, even populist alternative to more hierarchical Wall Street or Silicon Valley.
Another strength: Texas now has more finance professionals than New York. As Soichiro Honda, the founder of Honda, once told me, “more important than gold or diamonds are people.” For much of its history, the South failed to attract people who could build a stronger, more advanced economy. Today’s reversal is proof that there are few inevitabilities in the political economy.
Housing is another consideration. Although both progressives and even some conservatives now claim the South is suffering from the same shortage of affordable housing as the Northeast, this is limited to a few select areas, notably Austin and Miami. Due to more rapid construction, and lower development costs, Southern cities tend to overproduce housing, already leading to price declines. Overall, notes Wendell Cox in a recent report on housing affordability, prices in Atlanta, Houston, Dallas-Ft. Worth, and Jacksonville are all half or less the price, based on incomes, of those in LA, San Francisco, and San Jose.
In most of the century after the Civil War, Southerners, black and white, headed to other regions, with a diaspora that peaked at 12 million in 1980. That pattern, too, is shifting. Since 2000, Florida alone enjoyed net domestic migration gains of 3.5 million, Texas 2.5 million, and the Carolinas roughly 2.5 million; meanwhile, New York, Illinois, and California have hemorrhaged roughly 10 million together. Nine of the 10 fastest growing metros since 2020 have been located in Dixie.
This migration has also generated a huge infusion of capital into the South. Between 2019 and 2022, states like California, New York, and Illinois lost more than $150 billion in taxpayer income. In contrast, the Sunshine State alone gained more than $100 billion, while Texas, Tennessee, and South Carolina made major gains.
But if the capital comes largely from Boomers, the real shift has been among younger generations. In the last decade, the four leading destinations for millennials were all in the South: Nashville, Austin, San Antonio, and Dallas-Ft. Worth.
Perhaps nothing more dramatically reflects the ascendancy of Dixie than its embrace of migrants from developing countries. Historically, the South received few immigrants. In 1910, only 2% of Southerners were foreign-born, compared to almost 15% nationwide. That era’s predominantly legal migrants helped build great cities like New York, Chicago, and San Francisco. But in the last Census, notes demographer Wendell Cox, all three of the cities that led in the growth of foreign-born residents were located in the South: Miami, Houston, and Dallas.
The appeal of the South to these newcomers lies in the same thing that drives domestic migration: opportunity. Immigrants need such things as low entry costs and an expanding economy. Many find that Southerners increasingly mix their traditional courtesy with a renewed sense of openness. “We are a resettlement city,” suggests Steve Clark, a former CEO of the Fayetteville, Ark., Chamber of Commerce. “The chamber has a Hispanic heritage festival each year; it’s held downtown on the square. We teach five languages in our school here.” The metro vision, he suggests, is one that dispels the racial past and seeks a different future.
The South’s demographic destiny will be further accelerated by its appeal to families. The highest birth rate among the nation’s major metros is found in Hinesville, Ga. Other high-fertility areas include Jacksonville, Houston, Dallas-Ft. Worth, Memphis, Tulsa, and Oklahoma City. Meanwhile, the lowest rates are found in San Francisco and Los Angeles, with New York also back in the pack. As families move to the South, many of the region’s metros, even in famously doddering Florida, are getting slightly younger. This, even as Northeastern and West Coast regions age more rapidly.
Of course, nothing is set in stone. The region could still fall back in the pack by rejecting its transformation and embracing neo-Confederate nostalgia. Nominating morally dubious candidates like Texas’s rabid-red Attorney General Ken Paxton and pushing mindless Trumpism certainly invite a resurgence of blue politics. But for now, the demographic and economic trends promise a bright future for the South.
If he is looking back up from hell, or wherever he ended up, Jefferson Davis is unlikely to appreciate the racially tolerant, migrant-welcoming South of today. Yes, the South has risen again, but this has happened largely by copying the old playbook of the detested North.
