Globalization, Interstate Competition, and Labor -- The State Role in Labor Costs -- Explaining State Differences in Labor Cost Trends -- The Economic Effects of Cutting Labor Costs -- Social and Political Consequences of Declining Labor Costs -- Conclusion

In the American federal system, states actively compete for jobs, business investment, and factory locations. Labor costs have played an important role in such interstate competition since the days of the pre-Civil War plantation economy. In recent years, however, global economic trends have put...