By: Ted Dabrowski and John Klingner
Illinois’ constant bleed of residents to other states has been well documented by the Census Bureau, the IRS, U-Haul, United Van Lines and others.
Now the U.S. Bureau of Labor Statistics has released data that shows businesses are leaving Illinois, too.
Illinois lost a net 208 single-establishment firms to out-migration in 2021, the 3rd-worst loss behind only New York (-487) and California (-456).
The biggest winner was Florida, which gained, on net, nearly 400 businesses that year. North Carolina (149) was 2nd and Nevada and Texas tied for 3rd (103).
Wirepoints also calculated the business gains/losses per 1 million residents to take into account state size. Illinois ranked 2nd-worst nationally, with only New York experiencing a bigger loss. The full data table of all states is included in the appendix below.
The BLS report only tracked single-establishment firms, which likely underestimates the gains and losses from the movement of headquarters and other large firm workforces.
That means big HQ losses including those of Citadel, Boeing and Caterpillar are not captured in the data, nor are the losses from closures like those of Walmart, which shut stores in Illinois earlier this year.
Florida’s gains and Illinois’ losses were part of a larger trend where the South is winning the competition for businesses at the expense of the Northeast, the Midwest and the West. The West experienced overall losses due to California’s surge in business losses.
Cross-state migration across the country was led by small services companies including law, accounting and consulting firms, as well professional and technical companies. The Chicago metropolitan area’s diverse economy has lots such firms and they are extremely mobile, likely impacting Illinois overall numbers. From the BLS study:
“Firm migration has been higher in the professional, scientific, and technical services industry sector than it has been in other industries. Businesses in professional, scientific, and technical services conduct activities that require a high degree of training and expertise, such as legal advice and representation; accounting, bookkeeping, and payroll services; computer services; consulting services; and research services to clients in a variety of industries.”
In 1994, 16 percent of all migration was in this sector. In 2010, this share rose to 28 percent. In 2021, it reached an all-time high of 30 percent…most of the growth in firm migration occurred in this sector, causing the industry’s share of overall migration to rise. In 2021, firm migration in the professional, scientific, and technical services was 390 percent of its 1994 levels, compared with 145 percent for all other industries.”
Expect more information from the BLS in the future, but this preliminary data does prove one thing, that “as people migrate, so too does economic activity.”
So as Illinois continues to bleed people, it will also bleed jobs and opportunity.
Appendix
Read more from Wirepoints:
- New Census data: Illinoisans continue to flee, but not only to Florida. Many are moving just over the border
- No, it’s not just retirees leaving Illinois. Residents in every age and income group are fleeing.
- Illinois has been bleeding its wealthiest residents for years. Now it’s Ken Griffin’s turn to leave.
- Walmart’s flight from Chicago: ‘Corporate racism?’ Or crime, taxes and dysfunction?
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
Here’s a proposal from San Fran’s mayor. Tear down stuff and build new.
https://www.yahoo.com/finance/news/san-francisco-mayor-proposes-tearing-191455078.html
It’s Mr. Always Wrong here. Another article on the demise of San Fran based on cell phone activity. Chicago is not far behind. https://www.yahoo.com/news/san-francisco-faces-major-store-022110739.html Good news for Belvidere. Wal Mart will open a $1.2B over 1 million sq.ft. cold storage facility here employing 400-500 people on the low end at $55K by 2027. General Mills here in Belvidere is also making a major expansion of a new 1.3M sq.ft building. ps://www.growthdimensions.org/news-and-events/p/item/45387/construction-is-underway-for-general-mills-warehouse-and-distribution-center Lots of new construction at the Genoa road exit at the tollway. Hopefully the governor can stop expanding and get to work on the Stellantis factory. Lots of new… Read more »
…and how much are State taxpayers chipping in to pay for the actions you mention?
That’s the million $$$ question. Since Boone county is under PTELL jurisdiction any tax break or abatement can be passed on to taxpayers via a higher tax rate if they choose to. I will ask the mayor as soon as I can. The Lowes warehouse in Rockford received over $13M in property tax breaks years ago which was passed onto other taxpayers without anyone knowing about it. The same here may apply.
And what about State giveaways such as EDge Credits?
What other state can you chose to live in with more random and violent crime ? Is there a state in the union that can top Illinois ? Seems we can top any other in the nation for crime and corruption ! And where else can you go out for dinner, get car-jacked and mugged in the same night ?
If you live in a state where there are no jobs, you’re going to move to a state where you can find a job. Businesses can’t stay open because of Pritzker and all his rules and taxes. People can’t stay here because they can’t find a place to work, which they desperately need, so they can afford to live in Illinois. Oh yeah, let’s not forget, the Illinois murder rate. People are also leaving in droves because they dont want to die here.
This hasn’t been talked about much in a while – the brain drain of the youth raised in IL. In Central IL, nearly all the ‘best and brightest’ leave IL for college (IL colleges are expensive, mediocre, and ‘woke’) and then if they return end up in Chicago for awhile before leaving the state altogether. This has been happening for decades, and it has taken a serious toll on the economic viability.
Spot on JB. When Old Joe was at Michigan State in the 70s, Chicago area employment was a good place to land in….
Cue the trust fund baby to come out and blabber some doublespeak mumbo jumbo about how great things are going in Illinois and how he is responsible. And watch all the gullible lap up the blue Kool and. His partners the MSM will dutifully broadcast his good vibes.
Pritzker and Democrats driving up energy costs will hurt quite a bit.
Can’t imagine why businesses are dumping/avoiding Illinois — could it be: — the most business hostile laws/regulations in America — the most burdensome tax structures/tax rates in the US — a failing educational system at all levels — the worst fiscal basket case among all 50 states — out of control crime/soft on crime Democrats that have made law and order impossible — crooked and corrupt unions that have a stranglehold on government — the worst corruption of any state/one party misrule — a Democrat state energy suicide pact that will give Illinois 3rd world power blackouts and last but… Read more »
One change;
crooked and corrupt Dem unions that have a stranglehold on government
Surprised the number is not higher.
The whole country is growing, Florida and Texas are growing, what are they doing different?
Illinois is a very unfriendly state to do business in.
This can’t be a surprise to clear thinking people. Once again California, New York and Illinois are the worst performing states, and there is no end in sight. Those people and businesses that can leave will leave. I won’t hold my breath waiting for the Governor or the media to make mention of Illinois poor performance in yet another key metric. But I’m sure that another press release about the alphabet soup gang is just around the corner.
It was upper management of Caterpillar that left. According to an article I read a number of years ago CAT has manufacturing equipment that is impossible to move elsewhere. They are cranking out parts as fast as they can downstate.
Except by moving the domicile of the company, they avoid the corporate taxes of Illinois. If they still have manufacturing plants in Illinois, then the employees are certainly liable for their state taxes, and the company liable for employment taxes for those employees. But Caterpillar now has no liabilities on corporate taxes for Illinois.
JP MAGA – you are completely wrong about state corporate income taxes.
MAGA’s like John don’t operate with facts. Basic logic dictates that if companies could just locate C suite members to the most tax friendly state, every company would do it.
I wonder if states like Illinois would make corporations apportion and allocate their income to Illinois based on a formula that takes into account factors like sales, property, and payroll. But yeah, who needs to use facts or logic. Ignorant and proud MAGA baby!
Ask Adam shiff about facts pal.
PPF – corporations that move their headquarters from Illinois to a tax friendly state do save taxes, but it is on the margins for the very reasons you cite. Corporate income taxes likely are not the driver for a headquarters move. Being in a place which attracts talent does matter. My hometown has lost many white collar high paying jobs with the loss of several business, Walgreens and Baxter among them.
Regulatory environment is a really big deal. That’s one topic business leaders who leave blue states frequently cite as a reason for leaving – burdensome and corrupt regulation: “Chuck DeVore, former California state assemblyman and chief national initiatives officer at Texas Public Policy Foundation, said many corporations are moving to Texas because it is a central location, allowing for shipments to arrive across the U.S quicker. He said many corporations move because they’re motivated by costs. “Not just taxation of course, but also the cost for the lawsuit environment,” DeVore said. “The cost to comply with a multitude of different… Read more »