Monday, December 05, 2005

It's the Economy, or Maybe Not

cross-posted from Dome-icile

My friend Ralph Martire has in interesting piece in today's State Journal-Register discussing a new report on the state of Illinois' economy. The report, “The State of Working Illinois”, was produced by his organization, the Center for Tax and Budget Accountability, together with Northern Illinois University, with significant input from the Illinois Department of Employment Security. The study, funded by the Joyce Foundation, identifies Illinois specific job, wage, work force and industry developments over the last 15 years, and is available online at www.stateofworkingillinois.niu.edu/swil/index.html.

To be honest, I have yet to read the whole thing, but I found this excerpt highlighted by Ralph to be very interesting and troubling:

Over the last 15 years, economic growth in Illinois lagged both the nation and the Great Lakes Region. While overall employment grew, the largest job growth occurred in the low-paying service sectors.

Meanwhile, Illinois lost more than 222,500 well-paying manufacturing jobs. Most of the service sector jobs that replaced lost manufacturing jobs, paid 29.2 percent less than the jobs replaced. No surprise, then, that the report found inflation-adjusted median income for all Illinois households declined by more than 12 percent since 1999, the second-worst decline of any state in the nation. Concurrently, poverty in Illinois increased, while the number of jobs that provide health-care coverage and private retirement benefits declined.

For the next twelve months, Illinois voters are going to be simultaneously told that Illinois' economy is right on track, or not even on the track, depending upon who is doing the telling. And both sides are going to trot out facts and figures to support their position. But scholars aside, I think that it will once again come down to the question of "Are you better off than you were four years ago?"

Yet ironically, just as it was four years ago, I think that the bigger question on voters' minds will be "Do I trust this party to be in the Executive Mansion?" And rest assured, there will be plenty of debate on that subject as well. It's a sad situation indeed when ethics issues repeatedly trump other issues that should be the real focus of government.

7 comments:

Cal Skinner 10:13 AM  

So, shall we increase income and sales taxes, the way Martire has proposed?

This information was on the front page of the Chicago Tribune in mid-November. I posted a different view Nov.17 at McHenry County Blog.

Yellow Dog Democrat 10:31 AM  

John -

Martire raises a great point, and I can't wait to read the report.

As for the fall elections, we should keep in mind that neither the state legislature nor the governor has much say over how many jobs are created in Illinois. Except in extreme circumstances, our fate rises and falls with the fate of the nation, and our fate is really in the hands of the President, Fed Reserve Chairman, and Congress.

Since NAFTA, the U.S.'s #1 export has been manufacturing jobs, and as society becomes more stratified between rich and poor, the poor necessarily end up in service jobs for the rich. The middle class in America isn't extinct yet, but we are on the endangered species list, thanks to tax, spending and trade policies that benefit the ultra-rich.

Rep. John Fritchey 10:48 AM  

Excellent points gentlemen, thank you.

Anonymous,  3:15 PM  

Regretfully, it is the myriad of other taxes which have convinced companies to neither invest nor reinvest in the Illinois economy.

Martire wants to increase the burden of the corporate income tax well beyond the level which he posits are necessary to fund the early retirement programs and other misspending by local schools.

Just another boondoggle for those who believe that collecting taxes and passing them through the ever larger bureaucracy exacting its own tribute is the road to prosperity.

"Value added by manufacturing" used to be the gold standard of the State's economy. It provided a wide ranging multiplier throughout the State -- one which can not be matched by opening new stores. Why? Because manufacturing companies sold goods to many other states and overseas rather than just recycling local sales.

Toyota wants to build a new auto plant in the United States. Why is Illinois not in the running?

Indiana is developing a high speed rail system with Chicago as a branch line. Where is Illinois with Chicago as the logical hub?

Anonymous,  3:29 PM  

Ethics and the economy are interlinked when the people doing the stealing are hurting the economy.
The conbine is bad for the economy.

Making The Wheels Turn 3:38 PM  

" Where is Illinois with Chicago as the logical hub?"

We (IL) aren't in the game. Several years ago, Denny Hastert tried to get a Union Pacific railport setup directly adjacent to Cortland (just East of DeKalb, in DeKalb County). Way too much opposition, because of all the truck traffic in & out of the site on a daily basis. All our local pol's went 'thumbs down', so they moved what they could further West, and now are busy reworking the idea to work out bypasses around Chicago.

Understand, this is a big thing, because it's become a structural change in the rail transport business. It was "Workout a faster transit THROUGH Chicago" - it's changed to be "Workout a faster transit AROUND Chicago".

This could turn into a really nice bennie for downstate Illinois.

Extreme Wisdom 2:18 PM  

YDD,

Illinois has been exporting more jobs to other states than other countries.

Martire's Report should be proof that Martire's Platfrom is a bad idea.

His data (I read the trib article, but not the entire report) will be used to argue for some sort of "education" spending initiative, when what the state really needs is a tax cut (and concurrent spending cuts).

With all the un-met needs, where does the state get the money? From the massive education bureaucracy. But that goes against your party's biggest patron (which deserves to be thrown off the bus)

Provide a REAL tax swap. Cut all property taxes for education and fund each child equally from the state.

Send the bureaucrats home, and give the state a tax cut to boot.

It's all here.
www.extremewisdom.com/essays

Martire is half right, but the wrong half is a doozie.

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