The Southernization of the Midwest

by Benjamin Studebaker

Amidst the talk of House and Senate races in the midterms, there are a number of Midwestern states in which there is a significant chance that Democrats will take governorships. In 2008, Barack Obama won Iowa, Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio, and Pennsylvania. In 2016, Hillary Clinton won only Illinois and Minnesota, and Minnesota was a close call, decided by just a single point. This is the region that has changed the most politically in the last decade. Most of these states have, at some point in the last 10 years, fallen under control of a Republican governor who has attempted to radically reform their labour laws and pension systems in bids to remodel these Midwestern states after the states of the deep south. Their strategy is simple–lower taxes, stifle wage growth, strangle unions, kill regulations, and pirate jobs and investment from the states that fail to do the same. It’s a great Midwestern race to the bottom. But at the midterms on Tuesday, there’s an opportunity to throw some sand in the Republican gears. Here follows the story of each of these states, to inspire you and your friends to do what you can to save each of them from southernization.

Indiana: The First to Fall

In Indiana, the fight against southernization was lost long ago. Bereft of a Democratic governor since 2005, Indiana has endured more than a decade of transformation, and in that time it has ceased to resemble its neighbours. The Indiana Institute for Working Families tells the story with pretty pictures:

When the Indiana Institute says Indiana is “worst” in the region, they are even including the Dakotas, Nebraska, Kansas, and Missouri–states that have been very red for a very long time. We’ve written about the plight of Indiana before–its public schools have borne the brunt of savage cuts. Indiana has repeatedly leased its toll road to foreign conglomerates, but it never uses that money to help its ailing schools. Instead, it uses the toll road money to finance endless rounds of tax cuts for the rich. Indiana even prevents its counties and municipalities from stepping in, by prohibiting them from raising additional revenue for their schools without public referendums explicitly authorising the increases. As the system deteriorates, Indiana parents are increasingly forced to push their kids into private schools, and many of those private schools have deeply conservative social agendas.

Indiana is now a right-to-work state. Its state income tax is a flat tax and the rate is less than 3.5%.

This year, Indiana has a ballot measure which would bar the state from running budget deficits in the absence of legislative supermajority. Republicans hope to put one more road block in front of properly funding and investing in the state’s infrastructure and public services.

At this point, the state is so far gone that many of my friends and family who live there feel a sense of hopelessness about it. Those who can get one of the dwindling number of precious blue state jobs have tended to do just that, but because of Indiana’s economic strategy there are fewer of those jobs all the time, and more and more of them will end up Indiana working longer hours for lower pay. Indiana continues to siphon jobs and investment away from neighbouring states, but this doesn’t translate into higher incomes or living standards for ordinary Hoosiers. There’s no trickle down. It is a cautionary tale for the rest of the region.

Iowa, Wisconsin, Michigan: Crumbling Away

In the 2010 midterm elections, Republican governors were swept into power in Iowa, Wisconsin, and Michigan, and no one has been able to dislodge them since. All three have predominately Republican state legislatures, and this means there has been nothing to stop Republicans from doing everything they can to southernize these states.

All three are now right-to-work states. Like Indiana, Iowa and Wisconsin now feature minimum wages of just $7.25 an hour (Michigan is higher, at $9.25). In Michigan, voters tried to get ballot measures to increase the minimum wage to $12 and mandate paid sick leave on the ballot. The Republican legislature voted for these measures to keep them off the ballot, with the intention to gut them after voters have been denied the chance to vote for them. In Wisconsin, Governor Scott Walker has been slowly strangling the unions to death, surviving a previous attempt to recall. Iowa and Wisconsin have, in the years following the 2010 midterms, often performed near the bottom of the table in state job creation. The median wage in Wisconsin has been cut to near Texan levels:

Scott Walker Median Hourly Wage

Iowa and Wisconsin still retain progressive state income taxes (nearly 9% on incomes above $70,000 in Iowa and nearly 8% on incomes over $244,000 in Wisconsin). But Michigan now has an Indiana-style flat tax of 4.25%.

These states are fading fast, but there are opportunities to slow the decline. All three have gubernatorial elections this year. As I write, 538 gives the Democrats a 61% chance in Iowa, a 61% chance in Wisconsin, and a 95% chance in Michigan.

Ohio and Pennsylvania: Under Siege

John Kasich has ruled the roost in Ohio since the 2010 election, but unlike Scott Walker in Wisconsin he’s faced more political resistance to a policy agenda which is as far right as that of nearly any other Republican Midwestern governor. Kasich hasn’t been able to impose right-to-work laws. But he has retained and deepened tax cuts which were initially imposed by a predecessor in 2005, and the result has been many years of continued suboptimal performance in comparison with the rest of the country:

Kasich hasn’t been able to repeal the progressive income tax in Ohio, but he has kept the top rate low (below 5% for those earning over $208,000). He passed a law that severely restricted collective bargaining rights, but Democrats used a ballot measure to undo the change.

In Ohio, the state legislature is strongly Republican, but there is an opportunity to install a Democratic governor who may slow the pace of erosion–538 currently gives the Democrats a 56% chance in Ohio.

In Pennsylvania, a Republican governor was also elected in 2010–but unlike the rest of these states, the Democrats managed to unseat the Republican in 2014. The Republicans in Pennsylvania ran the job creation rate into the ground and hacked away at the state’s public university system. The minimum wage remains stuck at $7.25, and the state has a flat tax that barely surpasses 3%. Great damage has already been done in Pennsylvania, but the presence of Democratic Governor Tom Wolf provides some succour. While he continues to cut some business taxes, he protects the state from folks like current Republican candidate Scott Wagner. Wagner’s Republicans pledge to go far further and gut the regulatory state in Pennsylvania, and Wagner himself is a proponent of right-to-work laws and compares union leaders to “Adolph Hitler”. Thankfully, 538 gives Wolf an overwhelmingly large chance of stymieing Wagner. It’s important, because Wolf is the only thing that stands between a majority Republican legislature and total control over the Pennsylvania statehouse.

Illinois and Minnesota: Holding the Line

Unlike most Midwestern states, Minnesota and Illinois did not pick up Republican governors in 2010, during the Tea Party’s small government surge. In Minnesota, the 2010 elections saw a Democrat elected–Mark Dayton. Unlike most governors in the Midwest, Dayton has actually pursued tax increases on the rich. He’s even managed to get some passed. Minnesota is the historically the wealthiest of the Midwestern states in terms of real median household income, but when Dayton came to power its edge had nearly disappeared, with Minnesota just a couple thousand dollars ahead of Illinois. Under his administration, the historical gap has been reopened, and Minnesota once more reigns supreme. Though it remains the case that Midwestern families in all of these states remain no richer than they were in the late 90s:

Dayton isn’t a perfect governor, but by the standards of this region in the last decade he’s done a good job. His time as governor has now drawn to a close, but it appears the Democrats are poised to retain the post–538 gives them a 90% chance of keeping the governorship. This is especially important, because Republicans do in fact control Minnesota’s state legislature and would love to do to Minnesota what they have done to so many other Midwestern states, given the opportunity.

Illinois survived the 2010 midterms without acquiring a Republican governor, only to land itself with one four years later in 2014. But Illinois contains Chicago, the Midwest’s crown jewel. Minneapolis, Detroit, Cleveland, Milwaukee, and Indianapolis are big cities, but they cannot dominate a state legislature the way Chicago can. Because the sheer power and size of Chicago, Illinois’ state legislature remains firmly in the hands of the Democrats, led by Speaker Mike Madigan–a deeply experienced and skilled political operator. When Republican Bruce Rauner was elected, Madigan set to work preventing Rauner from doing to Illinois what Walker had done to Wisconsin and what Kasich had tried to do to Ohio.

Rauner began with 44 right wing objectives, whittled them down to five, and then failed to get even these passed. Madigan’s machine stopped him dead in his tracks. Even the National Review looks on Rauner’s governorship as a spectacular failure. John Miller writes:

On June 20, the governor announced that he’d accept an increase to the state income tax, raising it from 3.75 percent to 4.95 percent. Madigan pounced. Democrats drew up a budget that raised taxes in precisely this way, offered none of Rauner’s proposed reforms, and passed it with the votes of impatient Republicans. Rauner vetoed the bill, but a bipartisan supermajority overrode him.

That’s right–in Illinois a Republican governor was pushed into a tax increase. Madigan and the Illinois Democrats catch a lot of flack for corruption and criminality, but they have done an exemplary job protecting unions and pensioners from the savage policies that prevail in all the surrounding states. Rauner is up for re-election, and has resorted to making desperate negative ads:

Rauner has more than a 90% chance of losing, according to 538.

Minnesota and Illinois have done the best job resisting southernization, and they retain the two highest real median household incomes in the region as a result. The trouble is that because these states are surrounded by Midwestern states which are participating in the race to the bottom, they are constantly seeing opportunistic employers relocate jobs and investment to red states where taxes, wages, and regulations are lower. The more other Midwestern states southernize, the more pressure there is on Illinois and Minnesota to follow suit. Illinois in particular has become a constant victim of exploitation by red states, and it’s blatantly obvious in the population figures:

Image result for illinois population loss

The people of Illinois don’t want to go to Wisconsin, Iowa, Milwaukee, Indiana, and Ohio, and they certainly don’t want to go to Missouri or Kentucky. Illinois families receive higher incomes and higher quality public services. But their employers are moving jobs to these other states to take advantage of the sycophantic business policies of Republican governors. The GOP is being recklessly short-sighted. Chicago has long been of immense benefit to the whole region. It is an international business hub–perhaps the only such hub in an inland state. It is the strength of Chicago as a hub that historically jumpstarts prosperity in other Midwestern cities, and the region performs best when other states cooperate with Illinois. The Republicans’ parasitic attitude has undermined regional prosperity–it is as if the wheels of the car were looting the engine for parts.

Illinois and Minnesota look very likely to continue resisting southernization for now, but they won’t be able to hold out forever unless we put up a better fight in the rest of the region. Many on the left rightly criticise the Democrats from the Midwest of doing little more than kicking the status quo along. But the status quo Mark Dayton and Mike Madigan represent remains far superior to the Republican alternative–the gradual transformation of the Midwest into a pale imitation of the deep South. The left hasn’t done a good enough job in this region of contesting and winning primaries, and many in the region may rightly feel dissatisfied with the quality of candidate the Democrats have on offer. But while none of these Democrats are able or willing to turn the Midwest into Norway, at least they will stop Republicans from turning the Midwest into Mississippi. That’s worth it.

If you’re in the Midwest and you’re planning on voting, vote against southernization. Vote for Democrats, even the icky ones.