Illinois’ manufacturing industry, down 325,000 jobs since 2000, needs more than just platitudes and subsidies for favored industries. – Wirepoints

By: Ted Dabrowski and John Klingner

Illinois’ political leaders were in Glasgow this week promoting Illinois as a shining example of green manufacturing power. Their evidence? Illinois’ nascent electric vehicle industry and the hundreds of millions of dollars in taxpayer subsidies lawmakers have recently committed to it.

The prospects of a vibrant new car industry in Illinois might be enticing, but you can’t help but wonder what Illinois’ other manufacturing companies think of the subsidies while they continue to suffer under the state’s punishing taxes, over-regulation and corrupt governance.

Illinois’ manufacturing sector has yet to fully recover the nearly 120,000 jobs it lost in the Great Recession even as all of its neighbors have recovered their lost jobs and more, some significantly more.

Even worse, Illinois is still down more than 325,000 jobs since 2000.

That’s not something that can be fixed by throwing taxpayer subsidies at a few favored industries. Yet like the politicians before them, Illinois’ current leaders are more interested in propping up one “popular” and green-friendly industry than actually creating a business environment where all manufacturing enterprises can thrive.

Illinois’ manufacturing collapse

In 2000, Illinois manufacturing jobs totaled nearly 900,000. Today, the U.S. Bureau of Labor Statistics says the number of jobs is down to 552,000 positions. 

That loss in employment has made a mess of many communities around Illinois. It only takes a drive around the state to see how the decline in manufacturing has hurt populations, tax collections, home values, schools (smaller property tax base) and Illinoisans’ overall standard of living. (For a good example, see Wirepoints’ special report on our visit with the then-mayor of Danville, Scott Eisenhauer, back in 2017.)

For sure, outsourcing and poor federal policies helped jobs leave the country in recent decades, but Illinois stands out as the biggest loser of jobs among its neighbors. Since 2000, Illinois has lost 37 percent of its manufacturing jobs, beating out Michigan, which lost 35.5 percent.

Michigan arguably had the most to lose given its heavy reliance on one industry, but even they’ve played catch up far better than Illinois, especially since the bottom of the Great Recession.

In fact, every one of Illinois’ neighbors have recouped part of their manufacturing job losses since then. Michigan is up nearly 142,000 jobs (up 33 percent since June 2009), while Indiana is up 110,000 jobs, or 26 percent. Illinois’ other neighbors are up anywhere from 10 to 20 percent. In contrast, Illinois has shrunk by about 3 percent.

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Manufacturing has long been intertwined with Illinois’ economic might. It’s hard to imagine a vibrant Illinois without a recovery in that sector.

But a recovery isn’t going to happen just because Illinois politicians think they can pick a few winners in select industries. That’s never going to be better than an environment that encourages broad-based growth in which all of Illinois’ 16,000 manufacturers participate. And that means competitive tax rates, a slash in regulations – Mercatus puts Illinois at the 4th-most burdensome in the nation – reduced workers compensation costs, and a better overall business environment.

Lawmakers need to create a business environment so robust that companies can’t afford not to be in Illinois. Unfortunately, the only strategy they continue to deploy is bigger bribes so that businesses don’t go elsewhere.

Read more from Wirepoints:

• Springfield fiddles while Illinois cities burn
• Illinois lawmakers picking winners and losers again using taxpayer money. This time it’s electric vehicle manufacturers.
• The special interest smorgasbord inside Illinois lawmakers’ 800-page-plus green energy behemoth
• Location matters: Huge, new study by Tax Foundation and KPMG on state tax costs of doing business