For many Illinoisans, the next recession is already here Illinois Policy January 31st 2017
Illinois lost 11,000 manufacturing jobs in 2016.
Illinois is not working.
Since the end of the Great Recession, most members of the Illinois General Assembly have taken one of two approaches to this throbbing reality. The first is to close their eyes, plug their ears and babble. The second is to make things worse.
Now, this political aversion to growth is coming home to roost.
Some areas of the state are so economically weak that they’ve descended into recession, according to research from Moody’s Investors Service released earlier this month.
Moody’s named Bloomington, Carbondale, Peoria and the Quad Cities as the four Illinois metro areas in a recession, according to the group’s business cycle tracker. The tracker takes into account employment, factory output, home building and house prices.
Two of these areas are home to Illinois universities, which are now struggling to pay bills after years of reckless spending. It would be easy to blame problems with the local economy on the state of the state. But neither Bloomington’s Illinois State University nor Carbondale’s Southern Illinois University campuses have seen the sorts of colossal layoffs or steep enrollment decline that could bring about a full-blown recession.
Four more Illinois metros — Elgin, Danville, Decatur and Kankakee — are at risk of undoing their recoveries from the Great Recession, according to Moody’s.
These findings underscore a tale of two states. While the greater Chicago area has added more than 110,000 jobs compared with before the Great Recession, the rest of the state has lost nearly 43,000 jobs over the same time.
This is not to say Chicago is some gleaming city on a hill. It has deep financial problems that evoke comparison with Detroit. Vast swaths of the city are stuck in cycles of violence, joblessness and poverty. And property taxes in surrounding communities, especially the south suburbs, have risen to near-confiscatory levels.
It’s not a sustainable state of affairs. There will be more pain in the Windy City.
But it’s already arrived downstate.
The January release of December 2016 jobs data offered another window into that pain. Illinois’ unemployment rate increased, and remains the highest in the Midwest. It would be even higher if thousands of people weren’t giving up on looking for work altogether.
These numbers also reveal what too many families already know: Manufacturing is collapsing in Illinois. The state lost 11,000 manufacturing jobs in 2016. No other sector suffered more.
For some perspective, that’s comparable to losing every manufacturing job in Decatur. Or every manufacturing job in Springfield and Champaign combined.
If this trend continues, by the end of 2017 Illinois will have no more manufacturing jobs than it did during the worst months of the Great Recession.
In other states, this would provoke uproar from the Statehouse. Lawmakers might look to surrounding governments for success stories, and try to replicate them with strong policy changes.
So what have Illinois lawmakers done to address the jobs and manufacturing crises?
In 2011, months after passing a massive income tax hike, they passed a workers’ compensation reform bill. It took Illinois’ system from the most expensive in the Midwest and made it still the most expensive in the Midwest, but by a slightly smaller margin, according to annual studies from the state of Oregon.
Five years passed and lawmakers did practically nothing. In fact, the most beneficial economic stimulus actually came from doing nothing: allowing the 2011 tax hikes to partially expire.
Illinoisans now find themselves amid talk of yet another massive income tax hike with meek attempts at reform.
These include small changes to the workers’ comp system. The Technology and Manufacturers Association of Illinois dismissed these changes as “minor,” and certainly not worth a multibillion-dollar tax hike.
Also included, in exchange for a permanent income tax hike, is a temporary two-year property tax freeze. The freeze includes no provisions to protect local residents from other tax and fee hikes, barely any relief from expensive state mandates for local governments, and no protections from massive property tax hikes in 2019 and beyond.
Illinois has tried this approach before. And here we are. Large communities have fallen into recession, and the state’s industrial backbone is splintering.
Isn’t it time we listened to the employers who can’t afford to do business here? The families who can’t afford to stay in their homes? The Illinoisans who can’t afford not to leave the state?
Maybe another statewide recession would knock some sense into the lawmakers who kill real change at every turn. But don’t count on it.