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* Adam Pollet, director of the Illinois Department of Commerce and Economic Opportunity…
“You can go back 10 years; the net change in employment due to relocation is less than one-10th of a percentage point,” he said Thursday. “We can get caught up in a lot of ‘How do we compete with other states?’ for a zero-sum gain.’’ […]
According to an Illinois Innovation Index report issued last year, the state had a net gain in employment in 2012 through relocation but lost slightly more companies than it attracted. Companies that relocated to Illinois were larger on average than those that left, resulting in a net increase of more than 1,400 jobs in Illinois — relatively small compared with the state’s employment base of nearly six million, the report said.
A total 275 businesses with a combined 7,957 employees moved to Illinois in 2012, while 283 companies with a total of 6,542 employees left the state.
That same year, entrepreneurs created 22,351 new businesses in metropolitan Chicago; but the share of new enterprises, 0.048 percent of the 470,096 businesses overall, was slightly below other metro areas, the report said.
(The Houston area had 22,521 business starts out of 352,764 businesses – 0.064 percent; the Dallas area had 19,521 business starts out of 316,981 businesses – 0.062; the New York area had 29,125 starts out of 526,104 businesses – 0.055; and the Los Angeles area had 35,984 starts out of 578,008 businesses – 0.062.)
posted by Rich Miller
Tuesday, Jun 17, 14 @ 9:53 am
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So the tax breaks we offer to those companies are essentially very expensive ribbon cutting ceremonies. Would be great if policy actually followed from this insight.
Comment by not so simple Tuesday, Jun 17, 14 @ 9:59 am
One thing of note here is he is discussing relocation of business itself, not really a focus on relocation of people (individuals).
Numbers here seem pretty decent, but I would love to see of the number of businesses that started how many were still in business 12 or 24 months later.
Comment by RonOglesby Tuesday, Jun 17, 14 @ 10:01 am
We all know that Illinois can do a better job in attracting jobs, but the folks who push “other states are better than us” have ulterior motives, such as lowering taxes and stripping unions.
It’s nice to see their talking points blow up when presented with facts.
Comment by Grandson of Man Tuesday, Jun 17, 14 @ 10:03 am
A money quote in the article is right here:
““The vast majority of net new job growth comes from new business, and new business comes from people already in the state,” he said. “Relocation is not where job growth comes from. It’s a bit of a loser game. If Illinois gets 500 jobs from Wisconsin, you can bet that three months later, Wisconsin is going to take 300 jobs from Illinois.”
cool. That means stop spending tax money giving breaks to the big guys and instead create a friendly env. where bus can thrive. Startups will come, and survive.
Comment by RonOglesby Tuesday, Jun 17, 14 @ 10:04 am
–cool. That means stop spending tax money giving breaks to the big guys and instead create a friendly env. where bus can thrive. Startups will come, and survive.–
I’ll second that. Those multi-million-dollar press releases are a scam, a nasty alliance between big business and politicians that serves only their selfish purposes.
But that’s what you get when you have a large portion of the population under the delusion that it is the responsibility of state government to “create jobs.”
As far as start-ups thriving, who knows? Most new businesses fail. That’s the way it works, everywhere.
But small business could use a real voice in Springfield to counter the Fortune 500 types constantly feeding at the trough.
Comment by wordslinger Tuesday, Jun 17, 14 @ 10:10 am
Well SB2776 would be a good place to start, if it ever got out of rules…
http://www.ilga.gov/legislation/BillStatus.asp?DocNum=2776&GAID=12&DocTypeID=SB&LegId=78630&SessionID=85
Comment by OneMan Tuesday, Jun 17, 14 @ 10:14 am
@word
“As far as start-ups thriving, who knows? Most new businesses fail. That’s the way it works, everywhere.”
Very true. which is why I said it would be interesting to see data on the % of new bus that survive in the state 1, 2, 3 years later. Easy enough to look at Sec. of State data on Corp/LLC yearly renewals.
If we are below normal in that it could tell us about about the bus env. compared to other states.
Comment by RonOglesby Tuesday, Jun 17, 14 @ 10:16 am
Is there any data about Illinois companies that chose to EXPAND in other states? We didn’t lose the companies…just the jobs. I’m told that is a significant factor in the overall picture.
Comment by Just Saying Tuesday, Jun 17, 14 @ 10:28 am
RonO: has it just right.
Most of the moaning and handwringing about businesses leaving this state are hot air.
The key is the right environment for growth of the smaller companies.
Comment by walker Tuesday, Jun 17, 14 @ 10:33 am
Excuse me, but that figure is meaningless without knowing the TYPE and SALARIES of the jobs lost/gained, regardless of whether the equilibrium is zero. Nationally we are seeing the same thing: we have (finally) the same number of people working as before the Great Recession, but the jobs don’t pay as well.
Tax breaks for corporations may or may not be good policy, but I’d ask wordslinger and the like to find some of those Toyota workers whose jobs just went from California to Texas how meaningless they are.
Comment by lake county democrat Tuesday, Jun 17, 14 @ 10:37 am
This has been well documented before. In order, job creation is driven by start-ups, then expansions, then relocations. But relocations are certainly the sexy thing to talk about.
Start-ups and expansions aren’t happening in Illinois. Caterpillar, ADM, etc have been doing their expansion elsewhere, and start-ups are growing elsewhere, just not in IL.
Comment by Johnny Utah Tuesday, Jun 17, 14 @ 10:44 am
LCD
-we have (finally) the same number of people working as before the Great Recession,-
unfortunately the population has grown by just under 12 million from New Years 2008 to New Years 2013. Long way to go yet.
Comment by Mason born Tuesday, Jun 17, 14 @ 10:53 am
So essentially DCEO has no reason to exist.
Comment by Cassidy Tuesday, Jun 17, 14 @ 10:55 am
“Tax breaks for corporations may or may not be good policy, but I’d ask wordslinger and the like to find some of those Toyota workers whose jobs just went from California to Texas how meaningless they are.”
When the big picture is considered, it’s quibbling. Other states beside Texas are gaining jobs, and these are states with probably higher tax burdens than Texas. Why focus on Texas and omit mentioning the other states?
By the way, it’s been reported that Obamacare cut Minnesota’s uninsured rate by 40%. There is also a town in Texarcana in which the Arkansas side has more health insurance than the Texas side. Say it with me: Thanks, President Obama.
Since we’re back on Texas, how about its governor, who equates homosexuality with a disease? How about its lieutenant governor and candidates for that job, who want to teach creationism in public schools? How about the GOP state party platform, in which “reparative therapy” for gays is supported?
Comment by Grandson of Man Tuesday, Jun 17, 14 @ 11:00 am
== That means stop spending tax money giving breaks to the big guys and instead create a friendly env. where bus can thrive. ==
Count me in on that as well.
With all the other needs in our state, any money spent “buying” jobs and corporate relocations would be better spent in other areas that impact everyone and our overall state. Infrastructure, education, etc.
Comment by Formerly Known As... Tuesday, Jun 17, 14 @ 11:38 am
Rauner has so far proven himself incapable of understanding or commenting on the state budget.
However I would love to hear him say:
– how we should do all that DCEO is tasked to do for businesses in the state
– how we involve all the Civvies, and all the biggies and hedgies, in selling Illinois as a place for business, (rather than badmouthing it)
– how we improve the environment for start-ups and small business growth
– how we better link our education system to provide workers with the skills we dearly need.
Now that’s an area Rauner could well have some expertise and dramatically new ideas.
He would be speaking from strengths, and many would pay close attention to such a Plan.
Rauner has already confirmed that he’s not a strong analyst (budgeter), but could prove he’s a strong salesman (business developer).
Comment by walker Tuesday, Jun 17, 14 @ 11:38 am
Mason: The US has recovered its job levels from pre-recession, but IL hasn’t. Still down about 200k.
Cassidy: I’d say that’s about right. But they still get $500mil from Gen Rev every year. There’s a good place to cut.
Grandson of Man: Toyota left Cali because of the terrible biz environment and high taxes. The mayor of Torrance himself said it was a no-brainer.
Texas probably gets the most mentions bc it is growing more jobs than anywhere, gaining people from every state, etc.
Take TX economic policy and IL’s more liberal social policy and Colorado’s substance policy and we’ve got something going here!
Comment by Johnny Utah Tuesday, Jun 17, 14 @ 11:44 am
The labor participation rate is at the lowest level since the Carter years. The U6 unemployment figure is more than 12% nationally. Probably North of 14% in Illinois.
Comment by Wally Tuesday, Jun 17, 14 @ 11:57 am
Johny Utah
The problem isn’t the gross number the problem is the percentage of adults employed. As for il even the gross numbers don’t add up to a bright picture. We have added 12 mil people to the population yet have the same number of jobs we had 5 years and 12 million people ago. Not a good sign. May 14 BLS report shows only 62.8 % Civilian Labor force participation not good.
Comment by Mason born Tuesday, Jun 17, 14 @ 11:57 am
Mason born: agree with you entirely.
Comment by Johnny Utah Tuesday, Jun 17, 14 @ 1:19 pm
Pollet has the tough task of putting lipstick on the pig.
Comment by 1776 Tuesday, Jun 17, 14 @ 1:43 pm
Competition is good.
Comment by VanillaMan Tuesday, Jun 17, 14 @ 1:58 pm
“Take TX economic policy”
Meh. Since we’re going to play the game of comparing other states to Illinois (again!), I’ll take Massachusetts over Texas. Massachusetts has higher per capita income, better education and the highest number of people getting health insurance–far better than Texas, which is near the bottom. Massachusetts residents consistently support their state health insurance.
http://news.yahoo.com/support-massachusetts-health-law-unscathed-website-woes-poll-170229728.html;_ylt=AwrTWfyfkKBT0ngAAj7QtDMD
Massachusetts’ unemployment rate is 6%, which is not much worse than Texas.
Comment by Grandson of Man Tuesday, Jun 17, 14 @ 2:08 pm
–The labor participation rate is at the lowest level since the Carter years.–
The Baby Boomers are retiring.
Comment by wordslinger Tuesday, Jun 17, 14 @ 2:12 pm
Toyota wouldn’t pay a dime in corporate income tax for any car manufactured in Illinois sold outside the state.
Comment by wordslinger Tuesday, Jun 17, 14 @ 2:14 pm
The Baby Boomers are retiring. If only the answer was that simple.
Comment by Wally Tuesday, Jun 17, 14 @ 3:17 pm
Grandson of man:
MA has created 170k jobs in the last decade. TX has created 1.85 million. Texas has 4x the population.
Real annual gdp growth for the last decade has been 3.43 for TX vs 1.49 for MA.
Wordslinger: Toyota wont pay corporate tax in Texas for a much larger internal market. Nor will they pay in other states.
Comment by Johnny Utah Tuesday, Jun 17, 14 @ 3:50 pm
Per a Forbes article from earlier this year—
Since 2000 the labor force participation rates of workers 55 and over have been steadily rising and the labor force participation rates of workers between 16 and 54 have been declining.
Since 2003, 65 and older have seen their LFR go from 13.99 to 18.7 percent. Those 55-64 from 62.44 to 64.36%. Those 16-24 have dropped from 61.56 in ‘03 to 55.05% in 2013 and for those 25-54, it dropped from 82.98% to 82.01.
So, older workers have helped the LPR, not lowered it.
Comment by Wally Tuesday, Jun 17, 14 @ 4:04 pm
Wally, look at the hard numbers and get back to us. All you did was put up a jumble of statistics. That elderly population is growing at a huge rate because boomers are getting older.
Comment by Rich Miller Tuesday, Jun 17, 14 @ 4:06 pm
Hard numbers—-Population of those aged 25-54 increased by 1.12 million but its labor force shrank by 1.53 million, a net loss of 2.65 million.
2.53 million people in the 16-24 group failed to enter the labor force compared to the rate in 2003.
Comment by Wally Tuesday, Jun 17, 14 @ 4:25 pm
“Real annual gdp growth for the last decade has been 3.43 for TX vs 1.49 for MA.”
With due respect, for all that, Texas still has a lower per capita income and far fewer people getting health insurance, as well as more people earning below or at the minimum wage.
Again, Texas has “gooberville” politics. I mean really, wanting to teach creationism in public schools? I thought we were past that a long time ago. Supporting gay conversion therapy is practically medieval. The medical community has long-since moved past calling homosexuality a disorder.
I want to talk up Illinois and praise the state for the good that happens here. I see that eBay is expanding in Chicago, as well as a tech hub. A company took the tax incentives that we offered it and will not move to Wisconsin. I often complain about taxes, but I’m not against offering corporations tax packages to keep them here. I feel ambivalent.
And in a major hat-tip to wordslinger, here is a quote from an article about states being responsible for job creation:
***”There’s no credible evidence that anything state governments do intentionally to create jobs actually work,” said McGee.***
http://seattletimes.com/html/politics/2023863809_apxwisconsinwalkerspledge.html
Comment by Grandson of Man Tuesday, Jun 17, 14 @ 4:48 pm
So Adam, maybe we should just give up trying to compete, eliminate all of your programs and see what happens. Is that what you are advocating?
How many of those companies that relocated subsequently added more jobs than originally planned? How many made greater investments than originally announced?
How many Illinois companies have simply made all of their new investments in other states without saying a word?
Comment by Jimmy Tuesday, Jun 17, 14 @ 5:03 pm
Grandson of Man:
No argument about TX goober politics. It is a shame that they can do so much well to grow jobs for their own people, immigrants from Mexico, and migrants from every state in the US, but they still advocate things like gay therapy.
Comment by Johnny Utah Tuesday, Jun 17, 14 @ 7:11 pm
Reply to: RonOglesby - Tuesday, Jun 17, 14 @ 10:01 am:
Numbers here seem pretty decent, but I would love to see of the number of businesses that started how many were still in business 12 or 24 months later.
According to the SBA:
“About half of all new establishments survive five years or more and about one-third survive 10 years or more. As one would expect, the probability of survival increases with a firm’s age. Survival rates have changed little over time.” Source: Bureau of Labor Statistics, BED.
http://www.sba.gov/sites/default/files/FAQ_March_2014_0.pdf
Comment by Skeptical Wednesday, Jun 18, 14 @ 8:10 am