Illinois’ employment drought and the oases next door

There are 170,000 fewer people working in Illinois since before the Great Recession.

“I feel like a dog whose owner has died.”

Rick Schock was among 800 Caterpillar employees in Aurora that heard news in March of mass layoffs affecting their jobs. He’s a local millwright union member. And he’s been obsessed with his trade ever since his neighbor fixed the drive shaft on Schock’s first car.

But now he feels lost.

“Everyone just looks very defeated,” he said.

Schock and his coworkers aren’t alone.

Caterpillar’s woes are a small, unique part of a larger jobs picture that includes flatlining wages and a shortage of opportunity in Illinois. There are still 170,000 fewer people working in the Land of Lincoln since before the Great Recession. Illinois is one of only a handful of states where the working population hasn’t recovered.

So what happens when there’s no opportunity? People pack up and search elsewhere. Multiple different data sources – including the Bureau of Labor Statistics, IRS and Census Bureau – show the parade of Illinoisans leaving to other states is led by working-age adults, not retired snowbirds.

People in their prime earning years are leaving Illinois fastest. That’s a big problem for the long-term prospects of the state.

And if workers like Schock are looking for a place to succeed, they don’t need to go very far. Wisconsin and Indiana have hit a new all-time high for the number of people working. Their combined employment is now greater than the number of people working in Illinois, a testament to those states’ rapid recoveries from the Great Recession, and a far cry from the landscape just 10 years ago.

In 2007, Illinois had 370,000 more people working than the Hoosier and Badger states combined. That lead has disappeared. And hundreds of thousands of Illinoisans have disappeared with it.

Unsurprisingly, the flow of Illinoisans toward both of these neighboring states has surged.

Indiana gained 20,000 Illinoisans on net in 2015, the most recent year of data available. From 2006 to 2015, Illinois lost more than 119,000 people to Indiana on net. That’s equivalent to Indiana annexing the entire city of Peoria.

Illinois also suffered a net loss of more than 11,000 people to Wisconsin in 2015, and nearly 86,000 people over the preceding decade. That’s almost as if the entire city of Waukegan moved 15 miles up the shoreline.

There is some good news for Illinoisans: The state now has more payroll jobs than ever, according to the Bureau of Labor Statistics. But it’s a question of where those jobs are being created that should concern political leaders.

Manufacturing workers like Schock, for example, are being pummeled.

Illinois has regained barely a sliver of the manufacturing jobs that evaporated during the Great Recession, and it’s lost 300,000 manufacturing jobs since the turn of the century.  There are now far more jobs in sectors such as state and local government, leisure and hospitality, and business and professional services than in manufacturing. It didn’t used to be that way.

Indiana and Wisconsin, however, are seeing strong manufacturing comebacks. Both states have recovered a larger share of their manufacturing jobs than Illinois, and manufacturing workers see higher wages than their Illinois counterparts, when adjusting for cost of living.

The policy differences between Illinois and these states are obvious. But Illinois state politicians seem hell-bent on ignoring them.

Wisconsin’s property taxes are at their lowest levels in more than 70 years, and the state cut income taxes in 2013 and 2014. Indiana voters added property tax caps to the state constitution in 2010.

Illinois has some of the highest property taxes in the country, and the costliest tax burden in the nation, according to a recent report from consumer finance company WalletHub.

Despite lower tax burdens, Indiana and Wisconsin have state budget surpluses.

Illinois has billion-dollar deficits each year.

Indiana and Wisconsin have passed sweeping reforms to collective bargaining and workers’ compensation.

Illinois is home to the highest workers’ compensation costs in the Midwest, and collective bargaining rules that have led to exorbitant pay and perks in local governments.

Wisconsin became a Right-to-Work state in 2015. Indiana became a Right-to-Work state in 2012.

Illinois is a forced-union state, and is now surrounded by Right-to-Work states.

These differences and more expose a glaring lack of self-awareness among Illinois’ political class. In ignoring the success stories just beyond their borders, state lawmakers ignore the plight of their own people.