I could hardly let the recent Wall Street Journal article, “What’s the Matter With Illinois?”, pass without comment. I’ve taken the liberty of sampling the graphic above from that article. As you can see, Illinois has fared far worse in the recovery than its neighboring states.
The WSJ attributes Illinois’s problems, essentially, to Democrats:
Democrats say Illinois taxes aren’t all that high and have room to grow
Democrats want to impose a progressive income tax because they don’t want to extend their “temporary” tax hikes on their low and middle income constituents
The real reason Democrats want higher taxes is the state’s exploding government-employee pension costs
Democrats in Springfield are also teeing up a bailout for Chicago’s pension funds
Taxes and public union governance aren’t the only policy differences in these states, but they have been the most notable since 2010. Judging by the record so far, nothing would make the four Republican Governors of neighboring states happier than for Illinois to keep soaking its millionaires.
I think that concluding paragraph begins to get to the heart of the matter but let’s do a more detailed comparison of the five states.
|State||Population (in millions)||Per capita GDP||Population of largest city (000)||State Gini||Percent non-white population|
or, in summary, Illinois is larger, richer, less equal, has a larger urban population, and has a larger percentage of minority and poor people than its neighboring states. It really isn’t as similar to its neighboring states as one might expect. It also has a higher state minimum wage than its neighboring states. Indiana can become Indiana just by competing with Illinois, tempting businesses to move across the state line, but it’s a lot harder for Illinois to improve its economy by attracting business away from Indiana. The numbers just don’t favor it.
What does Illinois need to do? Illinois isn’t a destination state like California or Florida and it doesn’t depend on natural resources as Texas does oil. The decline of the coal industry, largely a result of environmental regulations, has hit Illinois hard. Not only have thousands of working people been thrown out of work, many of those people headed to Chicago searching for jobs that proved elusive. Chicago’s Uptown neighborhood is still full of them.
Illinois needs to be more friendly to business, slowly reform its tax system to become less regressive, weed out government corruption, learn to live within its means, and recognize that it’s only by producing more that the state can prosper. Without business and industry Illinois will inevitably decline.