The region has become a business-friendly destination.
While New York and California are losing population, states like South Carolina and Alabama are not only gaining residents at a record rate, but they are also experiencing rapid economic growth.
A recent JL Partners poll captures a shift in perception: 36% of Americans now expect the South to lead economic growth over the next decade—far ahead of the West Coast (23%), Northeast (21%), and Midwest (19%).
This is quite a transformation for a region sometimes regarded as a backwater.
Since the late 19th century, American commerce and industry centered on the traditional business hubs of New York, Chicago, and California. Each successive wave of innovation—automobile manufacturing and aerospace, chemicals and consumer goods, financial services and digital startups—seemed to happen outside of the South.
Starting in the 1980s, an initial wave of “Sun Belt” states, like Texas, Georgia, Florida, and North Carolina, began to prosper. But what you might call the “core” Southern states, Alabama, Mississippi, Arkansas, Tennessee, and South Carolina, remained resolutely stuck in the slow lane. Until now.
Over the past decade, economic growth in the South has exceeded the national average, and in states like Alabama, Mississippi, Tennessee, Arkansas, and South Carolina, significantly so. Real GDP in 2024 rose 4.2% in Mississippi and South Carolina, 3.8% in Alabama and Arkansas, and 3.0% in Tennessee, surpassing the national rate of 2.8%.
Manufacturing jobs might have disappeared in the Rust Belt, but many of those jobs went South, not to China. US industrial output has roughly doubled since the Reagan era, and much of that expansion happened in states like Alabama, which has added over 50,000 auto jobs since 2000 while Michigan lost them.
Combined, Alabama and Mississippi now produce more vehicles annually than Italy or the United Kingdom.
The South is not just a manufacturing powerhouse—it’s rapidly emerging as a major financial service center. Think “Y’all Street” rather than Wall Street. Cities like Charlotte, Dallas, Miami, and even Nashville have become financial hubs in ways that once seemed unimaginable. This shift is so pronounced that JPMorgan Chase now employs more people in Texas (around 31,000) than in New York.
So strong has Southern growth been that between 2020 and 2024, 78% of all US jobs added to the economy have been located in the South.
The population of the South has increased by 7 million since 2020.
If anything, this shift in population to the South seems to be accelerating. According to the 2026 HireAHelper Moving Migration Report, in 2025, for every 10,000 residents, South Carolina gained 79 more people, Tennessee 47, Alabama 36, and Mississippi 18. New York, by contrast, lost 28, California 25, and Washington state 10.
Even as America’s college-age population shrinks due to lower birth rates, Southeastern Conference (SEC) universities are bucking the trend with rising applications, especially from out-of-state Northeastern students. Between 2014 and 2023, SEC schools saw a 91% surge in undergraduates from out of state. These students aren’t just chasing sunshine and football; many seek a campus culture that is the antithesis of Northeastern or Westcoast woke.
Unsurprisingly, the JL Partners survey found young graduates particularly bullish on the South’s prospects, with nearly 4 in 10 naming it the region most likely to grow fastest in the coming decade.
What explains this Southern success? Southern states are not just more friendly. They are business-friendly.
Taxes tend to be lower. Some Southern states, such as Texas, Florida, or Tennessee, have no income tax; others, like Mississippi and South Carolina, are on the road to income tax elimination. State income taxes are higher elsewhere, with Washington state, for example, about to introduce an income tax for the first time.
Southern states tend to have less red tape. South Carolina recently repealed a lot of the so-called Certificate of Need red tape that held back the healthcare economy. Contrast that to California, now one of the most stringent regulatory environments in the US, with onerous compliance requirements, for example, on climate disclosure and environmental standards.
Southern states have more flexible labor laws, and most are right-to-work states, meaning that workers cannot be required to join unions. Southern states like Mississippi have begun to remove restrictive occupational licensing rules, too, making it easier for people to find work.
The South has significantly lower electricity costs on average, largely because the South never really took the Biden-era inducements to take up renewable energy. Ironically, given that the Sun Belt is where the sunshine is, the South avoids prescriptive renewable mandates, while making practical use of solar power. In contrast, the Northeast and California have stringent renewable mandates and face higher prices as a consequence.
The secret of America’s success is having fifty different states trying out different policy solutions side by side. The Southern states seem to have found a winning formula.
