It’s not my imagination. The economy in Illinois really is crummy:
The dismal news reported Monday by the U.S. Department of Labor: Illinois still has the second-highest unemployment rate in the nation. Only economically hobbled Nevada has a worse job picture.
This state’s jobless rate ticked up 0.1 percent to 9.2 percent in July as the state added a modest 7,100 private-sector jobs last month. The national jobless rate is 7.4 percent, which looks pretty grim … except when it’s compared with Illinois’.
We are not creating many jobs here. We are not competing. We are being left behind.
The Trib editorial quoted above goes on to suggest that workmen’s comp laws in Illinois need further reform to bring them into line with those of the surrounding states.
When you look at the long-term trend it certainly looks as though Illinois, unlike the country as a whole, is just moving sideways:
Given the headwinds that the state is facing, it’s amazing the state is doing so well. Unemployment, as noted above, is the 2nd highest in the nation. We’re basically where we were at the end of 2010. The state legislature has steadfastly refused to deal with the state’s most pressing fiscal problem, public pensions. The state’s GDP is rising more slowly than that of nearby states or the country as a whole. Government corruption is so bad we’ve become a national laughingstock. State lawmakers have accomplished none of the things they promised when they enacted the whopping increase in the state’s personal income tax, which expires in 2015. The new strategy for increasing revenue in the face of economic doldrums is a graduated income tax, unlikely to encourage income earners to come here or stay here.
We’ve become California without the mountains, the ocean, the desert, the climate, or Silicon Valley. We’re Bakersfield all the way from the Wisconsin border to the Ohio River.
WE need to do more. We need to attract and foster businesses rather than driving them away.
We need to attract and foster businesses rather than driving them away.
That’s not going to happen, anytime soon, under an administration who caters to union demands, has given the EPA carte blanche to stick it to business, who divides the interests of the country into convenient voting constituencies, and who cares more about transforming social behavior and policies than about rectifiying economic conditions or maintaining leadership in the world at large.
After all, one fosters any relationship by working together and seeing that incentives to do business and regulatory oversight have
equal and reliable footing with each other. None of that has been present in this so-called ‘recovery.’
Its interesting that the unemployment rate appears to diverge btw/ state and national around January 2011, when:
Illinois began increase of personal income tax rate;
Federal government initiated a payroll tax holiday.
Really remarkable that the unemployment rate should go down in an election year, up in other years.
I totally agree with your sentiment, except that moving sidways, when digging a fiscal hole due to the pension mess, means we’re actually going backwards.
I don’t see an easy solution – “throw the bums out” might help, but too many bums to make it practicable.
Dave, I’d love to hear your thoughts on the upcoming gubernatorial race – and the candidates.
In Illinois are there fewer businesses per capita than in other states?
@TimH, not that you asked, but . . .
On the Democratic side, the interesting question is whether a credible African-American enters the race.
On the Republican side, the interesting question is whether Republicans prefer a candidate that supported driver-licenses for illegal immigrants, a candidate that supported same-sex civil unions, or a candidate that’s friends with the Rahm.
Illinois has about the same ratio of companies to people as California or New York (1:10). It has the largest number of independently taxing entities in the nation, however.
TimH:
Too early to tell. I’ve had lunch with Pat Quinn (as in across the table at a table for four in a diner). I think he’s a decent bloke, just not a particularly effective governor. Is what Illinois really needs a Daley governor who’s never run for elective office? What PD said about a black candidate. If Lisa Madigan running for governor meant that her dad would retire from politics, I’d vote for her in a heartbeat.
I have no knowledge of Republican politics in Illinois. I find it unfathomable.
In the past, I’ve supported amending the Illinois Constitution to permit progressive taxation of income. Many neighboring states have progressive taxation. Our income tax system is effectively regressive given the credits available to those with money to spend on more than food and rent.
… But I would be reluctant to agree to a referendum at this time because the government was irresponsible with the temporary tax increase; it was passed by lame duck legislators with grave promise that the revenue would be coupled with fiscal reforms that would right the ship of state. Instead, they have wasted time on pension reform and have increased spending in many new areas. And the employment situation is not good, perhaps not because of the tax increase alone, but the fear that the tax increases were insufficient and will continue and increase to an unknown extent.
I am very persuadable on this issue, but the proponents have lost my trust. What will they do about it?
My ignorance of Illinois an it’s politics is vast. Pretty much everything I know I learned from driving through the state and this blog.
I guess what I can’t understand is why the people of Illinois (excepting present company, of course) don’t demand better.
From an operations point of view…..
IN, IL MI and IA all have logistical access to advantageous truck routes (and train) to ship “big, manufactured stuff.” They also have plenty of people who know what a hammer is, can man a welder or run a milling machine. Living areas are sufficiently attractive to entice all the engineers, cost accountants and plant managers you need. But…………eastern MI and IL are floundering, while western MI, IA and IN are eating our lunch. Whatup with that?
As fate would have it as I saw this blogpost I’ve spent the last few business days in diligence sessions with a company headquartered just a hop, skip and jump from where I live. But operations with those hallowed “high paying manufacturing jobs” near Des Moines, IA. Didn’t used to be that way. They were here in IL. Several years ago they desired to expand their plant but basically, after surveying the total cost landscape and getting the finger from IL, moved.
I’ve previously cited a WI company that went to TN. A forger who moved to NW Indiana. There a million stories in the naked city. This is proceeding at an accelerating pace. This state is committing Detroit-style suicide with everything from current to prospective, as PD pointed out, taxation, incompetence, graft in permitting and so on.
I know there are those who will deny, declare business greed or old reliable: “damned Republicans.” (Heh. Kind of hard in a state completely dominated by Democrats.) But upon returning from a pleasant interlude in their respective opium dens they ought to ask if their ideology is really worth the selective harm they are doing to the unemployed in IL, and the implications for the nation as a whole.
Red,
Now that was a colorful comment! But, we all know that even in states dominated by dem orthodoxy, when the economy or culture starts to slip and slide it’s the R’s who are first on the list to blame.
Hmm, it seems that our California Democrats must be a better breed than those in Illinois, since our unemployment rate has dropped from 12% to 8%, our budget has come into balance, our bond rating improved and our real estate market heated up.
Here in Marin, which is not just run by Democrats but by Pot-smoking Commie Hippie Democrats, the unemployment rate is 5.3%. And the housing market?
Over across the water in San Francisco, which is not just run by Pot-smoking Commie Hippie Democrats but by Naked Gay Multicultural Pot-smoking Commie Hippie Democrats, the UE rate is 5.4% and:
Which makes me suspect that this. . .
. . . is kinda stupid.
Jan
One such commenter was chastising me recently citing the public equities market as evidence of a good economy. Well…….
http://www.zerohedge.com/news/2013-08-20/fundamentals-better-get-better-fast
I was also chastised about the improving Federal deficit. Unfortunately, the Federal deficit – 5 years on from the depths of the 2008 recession – stands as a % of GDP at the same level it did at the bottom of the 1982 and 1991 recessions. Great.
This reminds me of a basketball team being screamed at by their coach between to the 3rd and 4th quarters for being down 100 to 52 and a player retorting that things were actually great and they were on a roll………..having scored the last 8 points.
So. . . That makes Obama’s administration on par with the Reagan and George HW Bush administrations? Okay, if you insist.
Red,
I follow zero hedge as well, and it posits a very different analysis of the stock market and economy, in general, than Michael does. However, he wants to believe the current numbers, not looking at all the prevailing weakness behind them.
In the meantime, while Ca. may look rosie, on the outside, the UE did tick up a few tenths of a point – 8.6 percent, I think, even
though jobs were indeed added in July. The housing market is
blazing, especially along the affluent regions. But, the market doesn’t seemed backed by real growth in the economy. Bond strength and stock market heights seem bogus to me, with the latter pumped by the equally bogus QE. I am not at ease with between a 16-17 trillion debt, and no viable economic policies on
the horizon, except more taxes and business regs.
Furthermore, blaming the ‘other’ party for every problem encountered in office, gets real old after a while.
@jan
Whatever our politics, we can easily agree the national economy is in a terrible state. Over the last three quarters we’ve averaged growth of 1.07% and that’s before Q2 2013 is revised downward, which I believe it will be. 36% of Millenials are living at home due to lack of jobs and/or wages insufficient to actually run a household on; by letting them and everyone else languish we have damaged our economic performance for several generations to come.
I know a number of young people working multiple jobs to make ends meet and they feel increasingly hopeless regarding their futures. Even those that studied in the sciences can’t find work in their fields and are getting by in menial positions while their skills and knowledge deteriorate. They can’t buy homes, can’t get married and don’t see this changing in the foreseeable future.
Anyone who has come to Illinois for the scenery or the climate has been misinformed.
I don’t think it’s quite as simple as “Republicans—good;Democrats—bad” or vice versa. What is the role of California’s natural advantages in its recovery? California enjoys the longest coastline of any state in the lower 48, beautiful and varied scenery, and (in places) benign climate. Texas and now North Dakota have oil and gas. Wisconsin, Indiana, and Michigan have the advantage of not being Illinois. As long as Illinois is such a mess, they don’t have to be perfect—just better than Illinois.
There is probably no better place to live than California if you’re rich or a public employee (active or retired). But California now has a net outflow of residents and those who are leaving are the poor and the middle class.
Why has California’s housing industry bounced back while Illinois’s hasn’t? California’s natural advantages make California more attractive to the rich and to investors.
I rejoice in California’s good fortune but California’s success is no model for Illinois.
“I rejoice in California’s good fortune but California’s success is no model for Illinois.”
Which is really the point, not Michael’s, ahem, “analysis.” IL has to compete with the states I mentioned, plus OH, MN, TN. And, in point of fact, did for years. Then something changed.
Maybe, as all great economic thinkers will tell you, and Michael notes, IL needs to smoke more pot.
“So. . . That makes Obama’s administration on par with the Reagan and George HW Bush administrations? Okay, if you insist.”
You completely missed the point. Not unusual.
Whatever our politics, we can easily agree the national economy is in a terrible state.
Ben,
I not only agree with your opening statement, but the rest of your post as well. Also, as a side note, even though our politics, as you say, may counter each other, you have always, IMO, posted reasonable and well thought out discussions — which I always read and do seriously consider.