The disappearance of Illinois’ manufacturing jobs

Illinois’ manufacturing sector has been hemorrhaging jobs for decades, and policy has a lot to do with it. Since 2004, Illinois has lost 125,000 manufacturing jobs. Most of these losses resulted from the Great Recession – a colossal 117,000 manufacturing jobs were shed from January 2008-January 2010 – but precious few have returned. In the...

Illinois’ manufacturing sector has been hemorrhaging jobs for decades, and policy has a lot to do with it.

Since 2004, Illinois has lost 125,000 manufacturing jobs.

Most of these losses resulted from the Great Recession – a colossal 117,000 manufacturing jobs were shed from January 2008-January 2010 – but precious few have returned.

In the four and a half years of recovery since then, Illinois has only regained 18,000 manufacturing jobs. Nearly 100,000 manufacturing jobs were never recovered.

That means Illinois has recovered a smaller portion of manufacturing jobs than all of its neighbor states and all the Great Lakes states – and it’s behind by a long shot.

Two business policy issues relate directly to a state’s ability to attract good manufacturing jobs: Right-to-Work policy and workers’ compensation policy.

Illinois is the worst in the region on both policy issues, while Michigan and Indiana are the best. Unsurprisingly, Illinois’ manufacturing recovery has been worst, while Michigan and Indiana’s have been best.

The lesson is clear: make your state attractive and manufacturers will locate there. Illinois manufacturers are constantly lured into bordering states, especially Indiana. Policy drives these decisions.

Douglas Oberhelman, CEO of Caterpillar, says that when he visits other states he is often asked, “Doug, what are you doing in Illinois?”

Oberhelman spelled out the problem clearly, saying, “I worry about Illinois because every state around us is much more competitive now than we are.” And he adds that for workers’ compensation costs, it’s not even close. “The Indiana plant’s workmen’s comp is five times cheaper than the same one in Illinois, for the same injuries.”

Currently, moving to the Land of Lincoln is nothing short of a bewildering choice for manufacturing businesses. Political leaders need to enact pro-growth policies to reform the state. Only then will business leaders be asking themselves, “Why aren’t I in Illinois?”