Report: Michigan still outpacing Illinois in manufacturing jobs
Michigan continues to outpace Illinois in manufacturing, adding thousands of jobs last summer, while Illinois has lost thousands, according to a recent report released by a Chicago-based think tank.
"Michigan surpassed Illinois for total manufacturing jobs in April 2015, even though Illinois’ economy is much larger, and Illinois typically had more factory jobs in the past," Michael Lucci, vice president of policy at the Illinois Policy Institute, said in the report issued by the institute. "Since passing Illinois, Michigan has added another 21,300 manufacturing jobs, while Illinois has lost 8,000."
Despite Illinois' past strength in manufacturing, the state continues to suffer the double hit of difficult global conditions and the state government’s anti-growth policies, Lucci said in the report.
"On top of weak global demand for products such as Caterpillar machinery, Illinois’ burdensome taxes and regulations make the state unattractive for new investments that would create more manufacturing jobs," Lucci said. "In contrast, industrial communities in other Rust Belt states are experiencing a revival. Michigan, in particular, is making a manufacturing comeback, aided by increased demand for automobiles and pro-growth state policies. Michigan crossed another recent milestone, with the state surpassing 600,000 manufacturing jobs in July."
Despite comments by Republican presidential candidate Donald Trump about Michigan's economic problems, particularly those in Detroit, Lucci said Michigan's recovery actually began in June 2009, during the Great Recession.
"Auto companies received short-term help from the federal government and made their cost structures more competitive," Lucci said, referring to Bush administration legislative action that occurred in the few months before President Barack Obama took office. "The state began to institute pro-growth policies such as Right to Work and cutting taxes. When global demand for automobiles revived, Michigan manufacturers were ready to meet it. Since its recession bottom, the state has added 170,000 manufacturing jobs out of a total of 560,000 private-sector jobs."
Things haven't gone so well in Illinois, Lucci said.
"Michigan’s bounce back from the recession was stronger than Illinois’, and the Wolverine State has sustained manufacturing jobs growth even as Illinois has slowed down," Lucci said. "Illinois had a weak bounce back from the recession, and has lost manufacturing jobs in three of the last four years.
"To get back on track, Illinois must have a better business environment for manufacturers," Lucci said. "When market conditions improved for auto manufacturers, Michigan had its taxes and regulations in order to help capture tens of thousands of new manufacturing jobs. Illinois can’t say the same."
Regardless of market conditions for manufacturers in the state, Illinois' less hospitable policy environment remains, Lucci said.
"Illinois needs to put its house in order to revive its industrial economy," Lucci said.
Among the policy solutions Lucci's report recommends that would prepare Illinois for a stronger future: workers’ compensation reform, spending reforms, a property tax freeze, removing sales tax on manufacturing and passing so-called "Right-to-Work" laws.
"Illinois’ beleaguered manufacturing communities deserve better from their state government," Lucci said in his report. "Not only do state policies thwart private-sector jobs growth in cities like Peoria, Decatur and Rockford, it also makes it more difficult for these cities to deal with overwhelming pension debts. However, if state government fixes its tax and regulatory environment, these communities can thrive again."