“Chicago sunrise 1” by Daniel Schwen – Own work. Licensed under CC BY-SA 4.0
The Chicago Tribune ran another scathing editorial denouncing the policies of the state of Illinois. Their claim? Indiana is sucking up businesses fleeing the Land of Lincoln.
Alas, it’s no longer surprising when an Illinois company leaves for Indiana. HMD is building a $6 million headquarters and depot in Gary, with plans to create 500 jobs by 2021. Alliance Steel of Bedford Park wants to build a $35 million plant in Gary. Hoist Liftruck and T&B Tube have jumped the state line. More will follow, taking jobs and investment with them. Why? Because Indiana is one of the best states in the nation for doing business, and Illinois is one of the worst.
To be sure, Illinois is a basket case in many ways. And the civic leaders of the state and even the city have been in denial for years about the problems.
But this sort of screed isn’t like to be effective. For several reasons.
First, if Illinois is so horrible and Indiana is so great, why are so many of Indiana’s college grads now living in Chicago? Large numbers of educated young people have rolled into Chicago from the rest of the Midwest. This would seem to belie things being as awful as advertised.
Secondly, while plenty of places in Illinois are like Indiana, most readers of the Chicago Tribune don’t live in them. Those readers are well aware of what Indiana is like, and don’t find it particularly appealing. If it were, they would already live there. Telling people in Chicago that Indiana is a lot better is an uphill sale to say the least.
Third, if Illinois is so awful, it makes you wonder why the folks at the Tribune are still there themselves.
Lastly, these kinds of critiques generally have to come from a place of at least some affection in order to be processed. I have noticed the same effect in other places. Some local entity or columnist is so unrelentingly hostile to the city or state in question that he gets tuned out. I already notice that the Tribune has gotten a reputation for writing these sorts of things. People just say, “There they go again.”
The realities of both Illinois and Indiana are more complex than simple stories about business climate. While Downstate is very comparable to Indiana, the bulk of the residents are in Chicagoland, which is very different from the Hoosier State.
The root of the Tribune’s frustration is that Illinois and Chicago’s civic perceptions are almost entirely driven by the Loop. As long as downtown Chicago is thriving, they are unlikely to be convinced there are fundamental problems. Conversely, if there were problems in the Loop, you can be assured they’d take action.
Right now the Loop is booming, with jobs at an all time record high and corporations streaming in from the suburbs and out of town. There’s also a residential building boom, restaurants are flourishing, etc. So long as that’s true, the underwhelming aggregate stats on the city, region, and state don’t register.
If downtown Chicago started losing HQs instead of attracting them, things would change real quick. It’s sort of like how nothing was ever done about union work rules at McCormick Place until the city actually started losing major conventions. As soon as that actually happened, McCormick Place got reformed almost instantly.
You do hear rumblings about recruitment problems and overseas business perceptions. But right now it’s under the radar and clearly isn’t affecting the overall Loop performance. Until some headline problems hit there, I’d expect the Tribune folks to remain very frustrated.
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A chunk of the Chicago metropolitan population (6-8% depending on whether you use MSA or CSA) lives in what we Hoosiers call “The Region”.
That’s enough people to be Indiana’s second largest metro area, which may prove your point: I doubt there will be major C-suite relocations to Gary anytime soon.
I think you’re missing the point Aaron. No one is saying people from Chicago, are fleeing to Indiana because Indiana is a better state. Small businesses and suburban homeowners are moving from Chicago suburbs to Northwest Indiana because prices and taxes are lower, and the commute to downtown is about the same. I live in Indiana but can drive to the Loop in roughly 40 minutes, and go to Chicago several times a week. My son just graduated from indiana Univ. and moved to Chicago for the job opportunities.
The purpose of the Tribune editorial is to support the Gov. Rauner “turn-around” agenda, which is based on lowering wages and worker benefits like comp and pensions. Democrats control the state house though so its very unlikely to happen. In the meantime state pensions and expenditures go unfunded because no one wants to raise taxes. Indiana clearly has a better business climate, plus the benefit of proximity to Chicago.
The population of Lake, Porter, LaPorte and Jasper counties has dropped by a collective 3,000 since 2010, which doesn’t exactly speak to people leaving Chicago in droves to move to Indiana. Even the business activity leaving for Indiana seems more anecdotal than a trend — and the ones that are leaving are low-paying jobs, for the most part. No doubt, Illinois as a state is an economic basket case, but Indiana is a long way from leaving its neighbor in the dust. As long as Chicago is Chicago, there are going to be truckloads of newly minted college grads — at least from Big Ten schools — dumped into northside neighborhoods. The only that way will change is if Indianapolis can ever succeed in separating its own identity from the state, like Austin in Texas.
Also, I’m not sure whether for a manufacturer Indiana is automatically the best place to be. Every time I read articles about low-wage manufacturers not being able to find enough people willing to do their job for peanuts, Indiana is front and center.
Chicago’s real rival is Dallas. Manufacturing jobs in the Southland that don’t want to leave Chicagoland cross over to Da Region fairly regularly but mainly keep their Illinois workforce until they replace them with locals through attrition. Traffic between Chicago and Indianapolis is negligible. Chicagoans who want to be in a Sun Belt-style economy and urban environment go straight for the real Sun Belt.
That said, Illinois is badly whipsawing between the vision of the last 25 years or so to turn half of Chicagoland into Boston while letting the rest of the state rust even harder, and the Rauner/think tank plan to gut the state’s education system and other services until we can compete with Indiana for warehouses. There’s no plan to grow both the “knowledge” and blue-collar manufacturing/logistics economies. Then again, there’s not a lot of resources to go around.
You’re right to focus on the bigger picture. Much of the industrial movement in America the last 30 years has been inter-regional, not intra-regional, and now, when civic leaders think about business attraction, they’re often focused on luring offices in from the suburbs, an intra-metro approach. Why the focus on white-collar work and college? Because that’s what most leaders know. Most people over 50 think of “manufacturing” as repetitive, labor-intensive assembly-line work, not the design preparation, multiple disciplines and problem-solving involved in≈ higher-value production. One key problem is that most people still think in terms of blue-collar and white collar work, when today most high-value design and production is simply “technical”. If we could focus on that, we might design new educational approaches.
Harvey, that is also the dirty little not-so-secret of the Wisconsin economic growth under the Walker administration- a large number of it is firms that skip just over the border into Pleasant Prairie (not even old Kenosha) and retain their largely-Lake County IL work forces for now. Expect the same with Foxconn.
That said, outside of pharmaceuticals, I do worry that the resulting office park/light industrial vacancies in Lake County will start to approach levels seen and described by our host in Connecticut.
Chicago’s sheer size as a metro area makes in unique in the Midwest. And it’s absolutely true that Chicagoland’s elites are so enamored by the continued growth and success in the Loop. Bursting with highrise construction, a growing population of educated and affluent professionals, and new amenities catering to the tastes of this rarefied group (Divvy bikes, Whole Foods, etc.).
But while the Loop and its environs are thriving and resemble a slice of Manhattan or San Francisco in terms of amenity and desirability, the key difference is that the regional economic mix of Chicagoland is different than the High Cost Talent Magnets on the east and west coasts in that it lacks glamor/presige industries that attract the global elite. Chicago has historically been both a headquarters town for a diverse array of industrial concerns, from agricultural products to foodservice to retail, and a blue-collar industrial and manufacturing hub. And while the Loop has succeeded in retaining corporate offices, the region has absolutely not retained the operational and back-office jobs that provide opportunities to the middle class. The fact that when considered as a whole, the Chicagoland region resembles other stagnant Rust-Belt regions like Cleveland and St. Louis and Detroit, with little-to-no population or job growth and little prospect for attracting significant business concerns that provide middle class salaries.
The fact that the Loop is so divorced from the reality of the rest of the region is evidence of the limits on relying on gentrification by the affluent as a revitalization strategy. Those high-paying jobs in the Loop are essentially off-limits to the vast sea of unemployed and underemployed folks on the South Side (or Gary). They may be better off relocating to Dallas, or Nashville, or Raleigh, or any of the other countless Sunbelt metros where jobs are plentiful and living is affordable.
-Philamazoo