Illinois, Inmigration, and Outmigration

Illinois’s situation is considerably bleaker than California’s:

  • Illinois has experienced net outmigration for the last 18 years.
  • Those leaving Illinois are primarily of working age.
  • Illinois has experienced a net decline of $47 billion in income adjusted for inflation in the state and a net decline of $8 billion in tax revenue.
  • Illinois is now one of the highest-taxing states.

Judging by the states to which Illinoisans are moving, they are leaving Illinois because of Illinois’s slow economic growth, its high taxes, and its high cost of living (of which taxes are a factor). We will not change the trajectory of any of those by raising taxes.

Source: Illinois Policy Institute

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California, Inmigration, and Outmigration

Following up on a discussion taking place in comments, there has actually been research on migration to and from California, by the state legislature’s Legislative Analyst’s Office, something like the CBO but at the state level. I’ll summarize what we can conclude from their findings and what we cannot.

What we can conclude is

  • The number of people leaving the state exceeds those coming into the state.
  • The number of people leaving the state at every age group except those over 65 exceeds the number coming to the state. Over 65 the numbers are about equal.
  • At every income level below $110,000 per year the number of those leaving the state exceeds the number coming in. Over that income the number coming into the state is slightly higher. Over $200,000 per year the number coming in is considerably greater than the number leaving.
  • At every educational level below post-graduate education the number of people leaving the state exceeds the number coming into the state. The number of people with post-graduate degrees coming into the state exceeds those leaving by a considerable number.

What we cannot conclude is

  • Whether the amount of income leaving the state is larger than the amount of income coming into the state, less, or the same.
  • How significant the number of people who do not file income tax returns is in analyzing the entire picture. That is true because the analysis in the article is derived from income tax returns.
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What Am I Griping About?

Inspired by this post by James at Outside the Beltway I thought I’d put a little flesh on the bones of what I’m griping about when I complain about taxes in Illinois. Per an analysis by WalletHub Illinoisans pay the highest state and local taxes of any state in the Union. Here’s the breakdown:

Effective state and local tax rates on median U. S. household 14.90%
Annual state and local tax rates on median U. S. household $8,653
% difference between state and U. S. average 38.51%
Annual state and local tax rates on median Illinois household $8,585

There’s really no contest. We’re the worst off by a considerable marginSure, Californians can complain about their state’s high income taxes and Washingtonians about their state’s high sales tax (however Seattle’s combined sales tax percent is 10.1% while Chicago’s is 10.25%, the highest of any major city). But when you tax Illinois’s high reatl estate tax, its high sales tax, and its increasingly high income tax, we are simply no longer a low tax state. That is in the past.

Illinois fares better in other analysis. Tax Foundation places us as seventh worst (right along with Louisiana, Arkansas, Tennessee, and Alabama). Kiplinger says we’re one of the least “tax-friendly”. USA Today places us at 46th of 50 states.

Further, Illinois already has the lowest credit rating of any state right along with high liabilities and, as our high taxes and population outmigration tell us, we cannot dig our way out of the hole we’re in simply by raising taxes but that’s the only solution being proposed by Illinois’s politicians.

A more realistic solution requires something like shared sacrifice including higher taxes, reductions in pensions, and reductions in state payrolls. That would require multiple amendments to the state constitution and I doubt that we have it in us.

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The Whiggish David Brooks

I have realized the major way in which I differ from David Brooks. He believes in “Whig history”. “Whig history” is a way of presenting events that suggests there is a continuous, ineluctable progression towards greater liberty and enlightenment. I think that’s Eurocentric and far too focused on the present day. Examples: there are probably more slaves today than at any time in human history. More people are being slaughtered in war than at any time in human history. The amount of carnage being wrought today exceeds Genghis Khan’s wildest dreams.

In his latest New York Times column Mr. Brooks divides “norm-breakers”, the bringers of cultural change, into five categories:

  • Namers
  • Confrontationalists
  • Illuminators
  • Conveners
  • Celebrities

Because we definitely want to take advice on how we should behave from the worst-behaved people in the society, cf. the recent scandal over corrupt college admissions.

To those I would add at least two more:

Provocateurs

Provocateurs don’t really care whether the norms they’re opposing are good or bad. Their motto is like Marlon Brando’s line in The Wild One
Mildred: Hey Johnny, what are you rebelling against?

Johnny: Whadda you got?

Profiteers

Profiteers have something to gain by tearing down the icons they choose. Is it really a coincidence that Harvey Weinstein is a supporter of abortion rights?

We are conditioned to think of the present day as a culmination of events. The evidence is less clear. Carl Sandburg put it well:
We are the greatest city,
the greatest nation,
nothing like us ever was.

Change may be good or bad or, most frequently, both. Tradition is, as G. K. Chesterton aptly described it, the democracy of the dead. We should listen to it more closely and understand it before discarding it.

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The Real Democratic Party

Presumably alarmed by the perceived tilt of today’s Democratic Party, Nate Cohn and Kevin Quealy have an article in the New York Times analyzing the actual political beliefs of Democrats and they’re somewhat different than the advance press might have led you to believe:

In reality, the Democratic electorate is both ideologically and demographically diverse. Over all, around half of Democratic-leaning voters consider themselves “moderate” or “conservative,” not liberal. Around 40 percent are not white.

Roughly a quarter of Democrats count as ideologically consistent progressives, who toe the party line or something further to the left on just about every issue. Only a portion of them, perhaps 1 in 10 Democrats over all, might identify as Democratic socialists, based on recent polls.

Traditional liberals — another relatively white, well-educated bloc of Democrats — are also overrepresented on social media. They’re united with the progressive activists on the issues that divide Republicans and Democrats. They split on whether American society is fundamentally and unacceptably unjust, with liberals optimistic about compromise and satisfied with a cautious approach, and progressives demanding bolder action to redress injustice in society.

The article has lots of eye-catching infographics.

Get that? About 30% of Americans consider themselves Democrats and about a quarter of those AKA 8% are democratic socialists. Quite a voting bloc.

I also think that the authors fail to appreciate just how conservative many black voters are. Assuming that black voters will simply salute and vote faithfully for whatever candidates the party puts forward is a dangerous strategy. That was reflected in the recent mayoral primary elections here. More black Chicagoans voted for the most conservative candidate running for mayor than for either of the two black candidates running against each other in the general election. Voter turnout was catastrophically low.

My explanation for low voter turnout is not disinterest but something more like resignation or even despair. Candidates who don’t really resonate with the Democratic rank and file will only carry the party so far.

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Corruption Is the System

The editors of the Chicago Tribune highlight the incredible corruption attendant to public pensions which, coupled with downright malfeasance on the part of elected officials, have put Illinois and the City of Chicago in the positions they’re in:

The Supreme Court continues to interpret the pension clause to the extreme.

The ruling upheld a controversial state law that allowed a lobbyist for the Illinois Federation of Teachers, David Piccioli, to become certified as a substitute teacher in December 2006 by working one day at a Springfield elementary school — and to buy pension credit for his 10 previous years working as a lobbyist. That sweet deal qualified him for a pension windfall from a teachers retirement fund that as of late 2018 carried an unfunded liability of more than $75 billion-with-a-B. Because he also draws a pension from a previous job as a House Democratic aide, Piccioli’s total pension income now rises to nearly $100,000. His pensionable income from the Teachers’ Retirement System is based off his salary from the IFT— another questionable pension loophole, which the Supreme Court upheld last year.

A pension bill signed by former Gov. Rod Blagojevich in 2007 allowed Piccioli to retroactively count his years lobbying toward a teacher pension if he taught for one day in the public schools. He bought service credits for his years lobbying and began collecting a pension when he retired from the IFT in 2012.

This case showcases many of the defects of present law: “double-dipping”, i.e. collecting multiple public pensions, a law allowing people who are obviously not entitled to a public pensions to collect them, and the straitjacket in which Illinois’s constitutional guarantee of the enforceability of public pensions puts us. I could name a half dozen additional abuses in the present system.

For both mayoral candidates, Lori Lightfoot and Toni Preckwinkle, even commonsensical reforms in public pensions were off the table. That’s particularly punitive for Chicago because, since Chicago teachers’ pensions are paid by the city while other Illinois teachers are paid by the state, we not only pay the pensions of Chicago teachers we pay the pensions of non-Chicago teachers as well. Under a just system what Chicagoans pay to the state for teacher retirement would be credited towards what we pay Chicago teachers.

There’s a “Cross of Gold” speech lurking here somewhere.

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Taxes

Over the weekend I prepared our 1040 for 2018, the first time in years I’ve done so this early. We owed very slightly less than last year. It was also probably the first time in my adult life in which I took the standard deduction.

My wife and I are by no means wealthy. We’re both fairly healthy. I think we’re what most people would call “comfortable”. We’d be a lot less comfortable if I stopped working. We have a few luxuries—our opera subscription and the dogs. Otherwise we are pretty frugal.

Our primary concern right now is that the State of Illinois and the City of Chicago will drive us from our home.

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Why Do They Hate Young, Black Men?

The editors of the Wall Street Journal are quick to point out that raising New York’s minimum wage to $15 is producing precisely the results that many of us predicted:

Is it merely a coincidence that the city’s full-service restaurants have fallen into a jobs recession? Employment in January dropped 3.7% year over year, according to the Bureau of Labor Statistics. At the start of 2018, the Big Apple’s sit-down restaurants had 167,900 employees. This January, after the wage bump, it fell to 161,700, a three-year low. The preliminary February number is 161,000, even as overall city employment is up around 2% year over year.

The monthly jobs data can be noisy, but the trend fits what restaurateurs are saying. The New York City Hospitality Alliance surveyed 324 full-service eateries late last year. Nearly half, 47%, planned to eliminate jobs in 2019 to deal with higher labor costs. Three-fourths expected to cut employee hours, and 87% said they would raise menu prices.

Meanwhile, in a National Bureau of Economic Research working paper posted last month, three economists examined whether minimum-wage increases had any effect on crime from 1998 to 2016. “We find robust evidence,” they write, “that minimum wage hikes increase property crime arrests among teenagers and young adults ages 16-to-24, a population for whom minimum wages are likely to bind.”

Those hurt the most by these developments are young black men. The unemployment rate among young black men is almost 17% while their labor force participation rate is 57%, higher and lower, respectively, than other young people and much higher and lower, respectively, than the population as a whole.

Education is no solution to this problem—we aren’t creating enough jobs that require college degrees, either. Being unemployed with educational debt not dischargeable in bankruptcy is worse than just being unemployed.

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Spending Four Times As Much. For What?

Education is on Robert Samuelson’s mind, too. In his Washington Post column he points out the awful truth. Our educational policy isn’t working:

Already, at least two Democratic presidential candidates are pitching major educational proposals. Sen. Kamala D. Harris (Calif.) would give most teachers a huge pay raise, reportedly averaging about $13,500. Teachers, it’s argued, are underpaid. This makes good ones hard to recruit and retain. Meanwhile, ex-San Antonio mayor Julián Castro advocates universal pre-K classes to prepare children for school.

Both ideas sound sensible. But aside from the sizable costs, history suggests that creating gains in achievement and academic skills for the poor is extraordinarily difficult.

That’s the finding of a major new study. It reviewed test scores for Americans born between 1954 and 2001 to see how much the achievement gap had closed between students with low and high socioeconomic status.

The startling result: hardly at all.

“The achievement gap fails to close,” headlined an article in Education Next. “Half century of testing shows [a] persistent divide between haves and have-nots.”

The explanation is not that public policy wasn’t trying. The discouraging conclusion occurred despite the federal government’s decision to provide extra funding for poor schools under Title I of the Education and Secondary Education Act of 1965. Previously, public schools were funded mainly by localities and states. Corrected for inflation, overall spending per student nearly quadrupled from 1960 to 2015.

The problem really begins in high school and it cannot be explained by changes in demographics—the country’s racial and ethnic makeup. Gains that had been made K-12 evaporate in high school. Mr. Samuelson proposes getting the federal government out of education and allowing the states to rely on their own devices. That won’t work, either.

It not in our nature to spend our first quarter century of life preparing. By age 18 most people are ready to start building families of their own. Their energies aren’t devoted to their studies because they’re focused appropriately on the task of forming a relationship to promote that end. Nature didn’t intend for them to be in school in their mid-20s but to be rearing their children.

We need an educational, economic, and social system that’s conducive to human happiness. Forcing people educational, economic, and social systems that some people would like is a formula for unhappiness which is what we’re seeing. We’re spending four times as much to produce depression and suicide.

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There Are No Mountains

The subject of the day appears to be education, prompted, presumably, by the college entrance fixing scandals that have been in the news. In his New York Times column today David Brooks attempts to be profound but succeeds in showing us how crabbed and solipsistic his world is. He imagines life as consisting of two mountains:

On the first mountain, personal freedom is celebrated — keeping your options open, absence of restraint. But the perfectly free life is the unattached and unremembered life. Freedom is not an ocean you want to swim in; it is a river you want to cross so that you can plant yourself on the other side.

So the person on the second mountain is making commitments. People who have made a commitment to a town, a person, an institution or a cause have cast their lot and burned the bridges behind them. They have made a promise without expecting a return. They are all in.

I don’t believe he realizes that what he is describing is not life but an artifact of our educational and social systems, in particular of that tiny group of people in the elite elementary school-prep school-Ivy clique. Graduation, originally from Harvard or Yale but not from med school or a top business school, is the pinnacle of a mountain. That’s followed by an inevitable let-down. After 12 years of highly-structured existence you’re suddenly thrust into the much less-structured real world where, guess what? Even with maximum effort promotion isn’t automatic because there just aren’t as many positions as there are people seeking them. Some recover. Most don’t.

For most people life is much more quotidien and at its center are relationships. Relationships with your parents, siblings, neighbor kids, and then school chums. Then with your spouse and, likely, children. And so on. There are no mountains, no pinnacles. There are responsibilities and relationships. Just what used to be called “ordinary life”.

A life at school followed by the pursuit of self-gratification is lonely and unsatisfying. “Ordinary life” is becoming increasingly difficult because of a web of policies including educational, economic, and social which makes it that way. However boring “ordinary life” might be, it is what we have and how we’re built. Responsibilities are intrinsic to our happiness. The number of people who can live satisfying lives outside of olrdinary life is quite small.

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