A recent article highlighted that Louisiana’s wages are among the lowest in the nation. As native southerners, this struck a nerve. For too long, the “cost of labor”— the minimum an employer can pay based on local market scales — has been the status quo. Consequently, workers in Southern states have been penalized for their lower cost of living, even as those workers contribute to the national economy at the same levels of productivity as their peers elsewhere.
The “Southern discount” — the process of paying those living and working in the Deep South lower wages for similar work — results in a weakening of the entire region, as talented individuals migrate from Mississippi and Louisiana for the chance at competitive wages. It’s a primary reason these two states were the top exit states in 2025.
While the Southern discount seems equitable in theory, in reality, it is actually a form of wage suppression with deep historical roots. In 1938, the Fair Labor Standards Act created a national minimum wage. It intentionally excluded agricultural and domestic workers, not coincidentally roles then dominated by Black workers in the South during Reconstruction, the time period post-Civil War. Black men and women were relegated through racist cultural practices and community-instilled fear to roles as drivers, sharecroppers, maids, nannies, and cooks. In the record-breaking Emmy-nominated Sinners, one of the sharecroppers pays in wooden nickels, a nod to an actual practice of wage theft in the Southern economy.
Today’s “cost of labor” argument is a direct extension of policies designed to limit economic mobility for specific populations. By anchoring Southern wages to a localized market scale rather than the value of the work produced, we have created a separate-but-equal economy. This logic treats Southern talent as a cheaper commodity, effectively segregating us from the national standard of wealth-building under the guise of “regional affordability.” It’s devastating the states’ economies. For example, in 2024, the national average teacher’s salary was $69,544. The Louisiana average is $54,248. The Mississippi average is $53,354. This is the case, although schools in southern states typically face teacher shortages, leading to even heavier workloads than in other parts of the country. Despite these heavier workloads, they are still paid less.
As talent moves to pursue more viable economic opportunities, Louisiana and Mississippi lose a large share of their tax base. Just last year, almost every parish in Louisiana announced budget shortages. In Louisiana’s case, this has resulted in a dramatic decline of child-specific services, including educators, social workers, and nurses. And these shortages reflect national trends; they are more severe because of economic segregation. It is time to leave wage suppression behind. Zakenya Neely, a non-profit professional of over 20 years and a Louisiana native, shared her concern, “Fair wage compensation must evolve beyond geography alone. In today’s virtual and hybrid workforce, performance, impact, and expertise matter just as much in the South as they do anywhere else.”
The COVID-19 pandemic brought with it the rise of remote work and shed light on the harms of pay disparity, when employees from different regions deliver the same level of output. If two employees perform identical, high-level work, the value they create for the company is identical. Paying a Southern employee less is a “geographic discrimination on talent.” Just because an employee in the South can theoretically survive on a lower wage does not mean they are being compensated fairly for the level or amount of work they are producing.
While it is justifiable for wages in New York or California to reflect their high cost of living, it is unjustifiable for Southern talent to be penalized with a lower pay floor for the exact same output. Employees deserve to be fairly compensated for their work, regardless of where they live, unless we are also willing to accept lower productivity in exchange for lower pay.
Some would argue that increasing wages requires focusing on higher education. It’s important to resist the lie that higher educational attainment would equate to equitable compensation. Master’s degrees do not provide any more economic stability. Nor is the solution to work hard and ascend to the top levels of your career. The average Louisiana principal only makes $4,000 more than a teacher in another state. These teachers and principals work as equitably as their national counterparts, but receive stark pay inequities.
And they’re leaving because of it. Southerners shouldn’t have to leave their homes and loved ones for economic prosperity. Greater economic investment in talent in the Deep South can yield huge benefits. States that have raised their minimum wages saw profound community impact. Missouri, a historic battleground state, raised its minimum wage from $13.75 – $15.00. The approved ballot measure allows Missourians to invest more in their communities and in Missouri kids’ improved health and educational outcomes. Meanwhile, Louisiana and Mississippi are dead last at 7.25 – Missouri’s minimum wage in 2012.
The solution is clear: compensation should be driven by performance and impact, rather than geography. Relying on ‘cost of labor’ metrics only upholds an outdated system designed to suppress wages and maintain wealth divides. We must transition to a fair, location-blind pay structure.
It’s time for employers to move away from a prejudicial Southern Discount and heed a simple rule: Just because you can pay less, doesn’t mean you should.