Economic death of a thousand cuts
Illinois' hostile business climate is costing taxpayers a fortune in the form of lost jobs, declining tax revenues and social devastation.
All that's necessary to understand one of the things that's ailing Illinois is some bad economic news that was visited upon our fellow citizens in the northern part of the state.
Kenall Manufacturing, a commercial lighting company in Gurnee, announced last month that it's moving 15 miles across the border to Kenosha, Wis., to build a new headquarters and manufacturing plant. The company will double the size of its existing facility, putting up a 354,000-square-foot facility that will accommodate plans to hire 200 new employees over the next four to six years, pushing total employment to 600 people.
At about the same time, Libertyville-based Hanna Cylinders, which employs about 100 people, disclosed that it's moving to Pleasant Prairie, Wis.
But the real body blow came in February when Ohio-based Cardinal Health announced it plans to move anywhere from 650 to 800 jobs at its Waukegan facilities to Mexico.
While Wisconsin Gov. Scott Walker was crowing about his state's commitment to helping businesses "expand their operations and create new jobs," Illinois officials were apoplectic.
"We're going to be faced with even more people who cannot pay their mortgages, who cannot pay their bills. This is just a huge loss," said an official from the Waukegan Chamber of Commerce.
State officials were considerably less bothered, effectively commenting "c'est la vie."
A spokesman for the state's Department of Commerce and Economic Opportunity said that "while we always prefer that companies choose Illinois to grow ... Illinois is the fifth best state in America for new business locations and expansions."
It's hard to place much comfort in the statistics the state cites, because they don't ring true. Illinois has among the highest rates of unemployment in the country, and circumstances aren't improving.
"One does not have to travel any distance to see a recent example of Illinois' loss of jobs and the havoc it is bringing to our economy and citizens," said Greg Baise, president of the Illinois Manufacturers Association, in a recent commentary that outlined the state's declining base of manufacturing jobs.
Local state Rep. Naomi Jakobsson, speaking about the prospect of raising state income taxes through a progressive income tax, recently opined that people — and presumably businesses — don't move in response to a more onerous tax climate.
What's happened in northern Illinois not only proves she's incorrect but that the fallout from her sort of misjudgment can be catastrophic.
Illinois has a reputation as an unfriendly locale for business location and expansion — almost proudly so. Higher costs from litigation, worker's compensation and regulation here act as serious disincentives to come to Illinois, despite its solid work force, Midwest location and sophisticated transportation network.
Our elected officials talk ad nauseam about the importance of creating jobs for those who want to work while ignoring the fact that job creation requires job creators.
Despite the state's effort to prove otherwise, Illinois can't catch more job creators with vinegar than it can with honey. That's why the governors from Indiana, Wisconsin and as far away as Texas have targeted Illinois as a state whose job creators — like Kenall Manufacturing and Hanna Cylinders — can be lured away.
Those companies didn't choose to leave Illinois after having been here for decades because it was easy to do so. That kind of dislocation is hard to embrace, but they're leaving anyway.
There's a message there if Gov. Pat Quinn and state legislators have the stomach to face it.