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* During a House Revenue Committee hearing last week, CME Group Executive Chairman Terry Duffy said “people follow jobs,” and pointed to Texas as an example where people are moving in droves to find work. Duffy made the comment to explain the dangers of treating businesses poorly.
Gov. Pat Quinn has said time and time again that businesses tend to locate where they can find educated, trained people.
Both are probably right to an extent.
* The Question: Who is more right, Duffy or Quinn? Take the poll and then explain your answer in comments, please.
posted by Rich Miller
Thursday, Nov 17, 11 @ 11:33 am
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I think including Quinn’s name in this poll skews the results.
Comment by jk Thursday, Nov 17, 11 @ 11:46 am
Particularly with the ever-increasing proliferation of high-speed communications technology, the strategic advantage of centralized urban centers is diminishing. This is obvious in offshore services, but also true within the US. With little manufacturing remaining the advantage of ports and railroads matters less as well. Service-based companies are portable, which comes down to operating costs. Duffy is right.
Comment by Anonymous Thursday, Nov 17, 11 @ 11:48 am
I have read that Texas leads the nation in the percentage of jobs that are minimum wage, with no benefits. Also, a strong energy sector (natural gas production) accounts for much of the Texas growth.
Comment by Bill White Thursday, Nov 17, 11 @ 11:51 am
I heard or read that Texas has many low-paying jobs and very low health insurance per capita. I voted for Quinn’s way. From April 2011-September 2011, Texas’ unemployment rate has increased (U.S. Department of Labor statistics), so Texas apparently has nothing to brag about.
Comment by Grandson of Man Thursday, Nov 17, 11 @ 11:51 am
I also believe “-jk-” is right
Comment by Bill White Thursday, Nov 17, 11 @ 11:52 am
Texas’ growing unemployment rate reflects the national trend. I realize it’s early to ask administrations like Scott Walker’s in Wisconsin where are the jobs, but it’s something to definitely keep in mind. It was very recently that collective bargaining for public workers was reduced in Wisconsin (after the court ruling), supposedly to create jobs, but that state’s unemployment has crept upward.
Comment by Grandson of Man Thursday, Nov 17, 11 @ 11:57 am
It almost certainly depends on what kind of jobs, doesn’t it. Low-skill, medium skill, hi-tech? Probably not many (though I would guess some) software engineers moving to work on an oil rig.
Comment by steve schnorf Thursday, Nov 17, 11 @ 11:58 am
Put quinns name on top of the poll,the results should flip flop
Comment by foster brooks Thursday, Nov 17, 11 @ 12:03 pm
Those people moving droves to Texas to find work are mostly from Mexico.
Also, ports and railroads aren’t important anymore? When they move manufacturing to China, how else do they get the products back to America?
And the strategic advantage of urban centers is not diminishing. What’s the last large company to move from an urban area to a rural area, or to grow in a rural area without moving to an urban area? Why is the population of America urbanizing at an unprecedented rate if urban centers aren’t important anymore? Why are populations of small towns aging so much? It’s because so many of the young kids go to college and move to a city to find a job, never to return.
The idea that cities will lose importance because everyone can work from home over the internet has not proven accurate.
Comment by chi Thursday, Nov 17, 11 @ 12:03 pm
For me the question boils down to: How many people, particularly educated people, move someplace without the prospect of a job? Relocation to an area that may not have your kind of work is a risky venture. Accountants are not comedians. They do not move to Chicago to wait on tables and hope to get discovered (or hope that somebody builds a commodity exchange in the neighborhood).
Historically, much of the urban centers in the Midwest grew up this way. As capital-intensive (mechanized) Agriculture drove much of the rural labor force to urban centers in the hopes of securing the burgeoning number of manufacturing jobs, the factory was built first (or at least was planned first). Even if they did not move because they already had a job, they moved because the prospect of jobs was greater than their home area.
Not that quality of life issues are not important, particularly for those higher on the disposable income scale, but without a job to provide that income they mean quite a bit less.
Comment by McLean Farmboy Thursday, Nov 17, 11 @ 12:04 pm
I suggest people read the Political Math blog post on Texas before one jumps on the anti-Texas jobs bandwagon.
http://www.politicalmathblog.com/?p=1590
Comment by GOB Bluth Thursday, Nov 17, 11 @ 12:05 pm
“in droves”. Sorry.
And discounting the importance of urban centers also overlooks the discussion the past few days regarding the internet infrastrcuture here in Chicago that only exists in 5 other places in the country; all of which, obviously, are huge urban centers.
Comment by chi Thursday, Nov 17, 11 @ 12:07 pm
Both, but I lean towards Quinn’s opinion. Also, definitely skewed because Texas energy sector accounts for much of their economic growth.
Depends on what type of workers a company needs, junior people will follow jobs but senior people in greater demand will not. Ultimately I think it is not about a business advantage as much as a higher social standard. A lot of highly educated, mobile people will not settle for living outside where there is great entertainment, culture, access to restaurants/bars, etc. Austin is great - but its still not Chicago.
From personal experience I have taken a job in a mid major city out of state in a “business friendly” state and 90 percent of my coworkers and myself were angling how to get back to New York, DC, Chicago, etc from the moment we arrived. We all followed the job and saw it as a stepping stone rather than a destination.
Comment by Anon Thursday, Nov 17, 11 @ 12:09 pm
PQ wins this one.
Unless Duffy is planning to hire a bunch of swamp rats as traders
Hmmm maybe he did and that is why MF Global is out $600 million
Comment by CircularFiringSquad Thursday, Nov 17, 11 @ 12:09 pm
Over the weekend I drove close to 300 miles in Alabama. I can tell you I saw a lot of large fairly new to very new manufacturing plants.
Comment by steve schnorf Thursday, Nov 17, 11 @ 12:09 pm
In terms of new graduates with education that we hire, we only recruit out of perhaps two schools in Illinois. We move them here primarily from out east and out west.
Comment by OneMan Thursday, Nov 17, 11 @ 12:10 pm
Duffy’s not entirely wrong, but that doesn’t mean he isn’t blowing smoke. Some people will move for some jobs. But he’s not looking for people whose options are working in a Wal-Mart in Illinois or working in a call center in Texas. The young, well-educated professionals with the background Duffy needs are not going to move to Kansas to work for him because their next best offer is from one of the financial powerhouses in New York or Boston.
CME isn’t in Chicago because of Duffy’s loyalty to the state. CME is in Chicago because Chicago helps draw employees. It’s as simple as this: If Duffy were sure he could get the workforce and infastructure he needs to run his run his business while paying lower taxes somewhere else, he would be using his time ordering business cards that say Idaho Mercantile Exchange instead of going back and forth with Quinn.
Comment by HiFi Thursday, Nov 17, 11 @ 12:12 pm
I think they are both right, but I voted with Duffy, because Illinois does not have a monopoly on well trained workers so perceived or actual treatment of business becomes key.
Comment by downstate hack Thursday, Nov 17, 11 @ 12:12 pm
===I think including Quinn’s name in this poll skews the results. ===
I considered that, but there’s been so much hate spewed at Duffy in comments over the past several months that any “anti” effect likely evens itself out.
Comment by Rich Miller Thursday, Nov 17, 11 @ 12:17 pm
Also, let’s please stick to the hypothetical arguments rather than relitigating the CME tax cut stuff. There’s another post for that topic. Thanks.
Comment by Rich Miller Thursday, Nov 17, 11 @ 12:18 pm
Texas has a diverse economy, it isn’t all gas and oil rigs. It has a large sector of it’s economy based on High Tech (TI, Verizon, Dell, HP, EDS, Perot Systems and the list goes on and on) It is also home to a lot of bio tech companies and large pharma companies.
If the CME decides to move, I would bet money they would end up in Texas, and more than likely Dallas. Why? Because the tech infrastructure they need is here, it is in the Central Time zone, DFW airport is one of the easiest airports to catch a non stop flight anywhere in the world, and Texas has the ability and the experience to integrate huge corporate relocations. In fact they would probably move to a little town called Westlake, has about 1,200 people that actually live there but is home to IBM, Deloitte, Fidelity, Sabre and a few others that escape me right now. They also have a very low property tax rate, have a publically funded International School, and enough land to build million dollar houses and corporate headquarters for the next two generations on the old Hunt Brothers Ranch.
If you think the traders wouldn’t happily move to Texas where they would keep a lot greater share of their income, be able to live in a much nicer house, have less traffic, easier winters and don’t have to pay to park or deal with the corrupt Chicago machine, think again.
Comment by Doug Thursday, Nov 17, 11 @ 12:19 pm
When I examined the question, visions of dust-bowl Okies loading up the Model A truck and moving to California to pick grapes with Tom Joad danced in my head, and then visions of black migrants from Mississippi riding the IC up to Chicago to escape the cotton fields and find work in the steel mills appeared. I couldn’t quite conjure up a vision of a mass nationwide exodus of geeks with pocket protectors moving to Boston or the Silicon Valley, so I sided with Duffy.
That being said, my thoughts are about like your current poll results. I am high tech but I am also telecommute friendly. It’s easier to work around a collegial bunch if you are doing brain work, but I could probably do 75% of my work from a ranch house in the Rockies if I didn’t have to socialize and go to meetings. When you have an empty stomach, it will tell you to go to where the food is.
Comment by Six Degrees of Separation Thursday, Nov 17, 11 @ 12:20 pm
Both are right to some extent. People want to be where they can get good jobs. Businesses want to be where they can get good people. Both people and businesses are more mobile than ever before - technological, societal, and demographic factors all play a role. Both people and businesses want to be where they can have a high quality of life and an ability to make money. I believe Illinois does provide that, but our prospects for the future are less certain.
Comment by Foxfire Thursday, Nov 17, 11 @ 12:22 pm
Both are right, but ultimately Duffy may carry the day. I lost two good neighbors in the last three years when their jobs moved to another state. (Kansas, Texas) They were both given the option of moving to keep their jobs and took it.
Comment by Louis G. Atsaves Thursday, Nov 17, 11 @ 12:33 pm
I voted Quinn. You’ve got to have good people in order to have a successful company.
In Duffy’s favor, if you’re a company recruiting for highly paid positions you can recruit nationwide and get people to relocate. I guess it depends on what socioeconomic world you’re living in.
Comment by Earnest Thursday, Nov 17, 11 @ 12:35 pm
In this economy people follow the jobs. They can’t wait for a job to come to them. Duffy is correct.
Comment by Lefty Thursday, Nov 17, 11 @ 12:40 pm
I do think Quinn is correct. ( though that shocks me to say that.) yes, it is true that many jobs can be done with e commute. but many companies prefer workers to be together, and some of the most successful ones also have nifty work environments, like Zappos in Vegas, Groupon to some extent here. they need smart workers. growing smart workers attracts all sorts of good things. as the north realizes the need, and figures out the financing for infrastructure rehab, we will also grow jobs. in texas it is one giant road project and lots of low wage jobs.
Comment by amalia Thursday, Nov 17, 11 @ 12:41 pm
Duffy is right up until about 1980; since then, Quinn’s statement is true.
Comment by Wensicia Thursday, Nov 17, 11 @ 12:53 pm
I would not want to move to a very rural area just for jobs and lower taxes. I would also not like to live in a very socially conservative environment. These two factors are very important to me, and I would choose the Chicago metro area over either of these, if I had a choice.
After working for DHS for many years and seeing wage stubs with no health insurance, which means many low-income people have no insurance without government help, a strong public safety net is important to me. I’m obviously not a big fan of the anti-government crowd.
Comment by Grandson of Man Thursday, Nov 17, 11 @ 12:56 pm
(Gov. Perry) “We’re growing a TON of jobs here in Texas!”
(Single Mom) “Yep, and I’m working THREE of ‘em.”
Okay, that’s a re-tread of a Bush joke, but it gets at the heart of the matter. A lot of the growth Perry claims for his state is that low-skill, lower wage, low-benefits stuff where your labor is basically commoditized. If you want Illinois to go backwards a century and be China, I guess that’s the way to do it.
Quinn’s line is the same as Illinois governors before him, and I think he’s right about access to the workforce. Part of that is just thanks to our population density, you automatically get a larger pool of potential good applicants. But if you look at the quality of the schooling the workforce gets, we have it all over Texas, where they still aren’t sure how Jebus put those dino bones down in the rock layers to test our faith.
Quinn’s been on a kick to send more education dollars into Illinois community colleges and technical schools, because there’s a lag in the number of those kinds of educated machinists and such coming out of the system, due to fluxes in the birth rate and other statistical factors. There are, as he says, a number of well-paying steady and stable middle-class jobs in the manufacturing sector gong unfilled right now for lack of qualified and pre-trained applicants. The trade schools and community colleges are where those people come from. Not everybody must or should plan to do internet bubble jobs where you dress like a hipster and count shifting virtual pixels around a screen as making something. We need people that actually MAKE stuff that we then export.
The social and cultural attractiveness of Chicago is also not to be understated. The executive types like to live in a business and cultural nexus, and that is Chicago, since forever. Our mix of high tech, ag, finance and manufacturing is world class.
Comment by Newsclown Thursday, Nov 17, 11 @ 1:00 pm
=== Our mix of high tech, ag, finance and manufacturing is world class===
But not uniquely so.
Comment by Rich Miller Thursday, Nov 17, 11 @ 1:14 pm
They are both right. But it’s also more complicated than both are making it seem. People do follow jobs. Job’s also follow people. We do have a lot of competition among states and a very mobile society. The internet is reducing the size of the planet and people can work from anywhere. You have to have a good place to live and a good business environment. Illinois needs to work on its business environment; we have a higher cost of doing business than vast majority of states. This can be corrected by additional workers comp reform, action to limit lawsuit abuse and some regulatory reforms.
Also, it’s not like our schools are the greatest in the nation, we can use some work and we could use another Tier 1 University… or two.
Comment by Ahoy Thursday, Nov 17, 11 @ 1:17 pm
I’m thinking pretty much along the lines of Six Degrees. History shows that people do follow jobs.
Accordingly, I voted to side with Duffy.
However, I vehemently disagree with Duffy’s concocted premise that people move because businesses are treated poorly.
At times, businesses treat EMPLOYEES poorly when they pick up and leave. And yet — people still move out of state to follow their employers.
A recent example? General Motors.
“At GM, for example, laid-off workers have absorbed all of the about 5,000 jobs GM has added since its bankruptcy. Thousands have transferred from shuttered plants, creating entire shifts of disgruntled workers who spent months on layoff, only to have to move out of town or out of state to take their next GM job.” http://www.freep.com/article/20110904/BUSINESS01/109040416/UAW-deal-may-hard-sell-rank-file
And for all those fixated on Texas as being some sort of employment nirvana, well, think again.
The new jobs-capitol-du-jour is — ready? — North Dakota.
North Dakota. I kid you not.
“From the Red River Valley in the east where the unemployment rate approaches 4 percent, to the oil-rich Bakken Shale formation in the west where less than 1 percent of residents are without work, North Dakota is the state the recession forgot.” http://www.iptv.org/mtom/story.cfm/feature/8885/mtom_20111110_3711_feature
Comment by Scott Summers Thursday, Nov 17, 11 @ 1:33 pm
Newsclown makes a valid point. Case in point, Caterpillar is about to invest over 600 million dollars in central Illinois. Guess what types of jobs are going to be created by far? Skilled labor: pipefitters, welders, etc. From what I have heard the biggest problem Cat has is not finding people, it’s finding people that have the skills that can do the work. And these are skills that you do not acquire in upper level universities. Community Colleges maybe. Trade schools definitely. OJT for this kind of work is no longer the norm.
Comment by Springfield Skeptic Thursday, Nov 17, 11 @ 1:35 pm
The overwhelming majority of the jobs created in texas are low paying jobs.
Add lots of people living at or below the poverty level just creates greater burdens on social sevices etc.
Texas shows the problem of trying to drive form over substance. Gowing poverty is not something I would trumpet.
http://money.cnn.com/2011/09/18/news/economy/poverty_perry_texas/index.htm
http://www.huffingtonpost.com/2010/06/21/texas-future-threatened-b_n_619997.html
http://www.dallasnews.com/news/community-news/prosper/headlines/20100917-Texas-seeks-answers-to-rising-poverty-9894.ece
Comment by Ghost Thursday, Nov 17, 11 @ 1:37 pm
People follow jobs, but would prefer for jobs to grow in the communities where they already have social networks.
Business choose to locate based on a myriad of factors. If you’re in the petroleum industry, you should probably go where the oil is. Lots of businesses relocate to chase tax breaks and sweetheart deals.
Comment by Carl Nyberg Thursday, Nov 17, 11 @ 1:38 pm
Duffy is more right than Quinn. It takes DECADES to build up an educated citizentry, and at the end of the day the citizenry can pick & move out of the area over a weekend. Conversely, jobs are far more fluid and the fortunes of a geographic area can rise in fall over a period of just a few years if a particular industry is hit hard and the area doesn’t have a diversified, robust economy otherwise.
We can have a world class education system all we want, but if this doesn’t remain an attractive place to stay, live, work & raise a family, all we’ll end up being is a net exporter of brainpower with nothing to show for it.
Comment by John Galt Thursday, Nov 17, 11 @ 1:42 pm
US Median household income, 2009: $50,221
Texas Median household income, 2009: $48,286
Illinois Median household income, 2009: $53,974
So, it’s not like Texas is Mexico wagewise. Below average, but not horrifically so. Indiana’s median household income was $45,427, well below Texas.
In other words, move along.
Comment by Rich Miller Thursday, Nov 17, 11 @ 1:57 pm
Also, a big reason for Illinois’ high median income is the impact of CME.
Comment by Rich Miller Thursday, Nov 17, 11 @ 1:57 pm
According to corporate executives surveyed by Site Selection Magazine, Quinn is right.
The educational level and job skills of the available workforce is critical.
Worth noting: there is a distinction to be made between Intellectual Capital and Creative Capital. Relatively speaking, Innovators add much more value than Inventors.
One of the catastrophic mistakes made by Rahm Emanuel and Bill Clinton was not recognizing the human capital of Mexico when it came to NAFTA. Mexican workers were believed to be too lazy or too ignorant to assemble high end electronics or automobiles. Oops.
A brief footnote on Texas: nearly one million unemployed, one in six on food stamps, a structural budget deficit of $27 billion and overall budget hole of $388 BILLION. Corporate America has led a tremendous p.r. Campaign selling the Lone Star State as some sort of Eden because of its pro-business, anti-worker, anti-consumer laws, but thats not my idea of paradise.
Comment by Yellow Dog Democrat Thursday, Nov 17, 11 @ 1:59 pm
Americans were willing to move a lot more before the Wall Street boys and GOP laissez-faire economic policies catered the housing market. Labor mobility is at fifty year lows, less than 1.6% in 2009. So Duffy’s underlying premise is not supported by the facts.
Comment by Louis Howe Thursday, Nov 17, 11 @ 2:10 pm
When my grandfather’s landed here from Italy they
moved to Chicago to get a job.Wisconsin Steel made
steel, by and large they made lot’s of it along with lots of money. People relocate for jobs,not to pay attention to guys like Quinn.Between those
2 son’s of Ireland Duffy is a lot smarter.
Comment by mokenavince Thursday, Nov 17, 11 @ 2:13 pm
Where does Duffy own a home? There was a study by one of the business mags or profs that the strongest indicator of business locations was where the CEO owned a home. That said, it depends on the nature of the business–irrationally, CEO’s are so stupid that they go to where they can get the cheapest workers even though research shows going to the smartest workers proves to be the best strategy and is followed by the best companies.
Comment by D.P. Gumby Thursday, Nov 17, 11 @ 2:19 pm
I was not happy with the likes of Chris Christie and Scott Walker launching brazen campaigns to take Illinois jobs. I thought the unemployment problem was a national problem, and how do you solve the national problem if you just shift jobs from one place to the next?
Comment by Grandson of Man Thursday, Nov 17, 11 @ 2:39 pm
North Dakota reminds me of the (supposedly) true story of the DoD pressuring military recruiters that they were short of meeting its diversity goals in attracting minority recruits in some states, including ND. At one of the local internal seminars, a ND Army recruiter stood up and stated: “If I find a young black man in this state, I will attempt to recruit him”.
Comment by Six Degrees of Separation Thursday, Nov 17, 11 @ 3:05 pm
Rich, you moved from Chicago to Springfield. Were you following jobs or people? You, of course, took your job with you. So from your perspective, is Duffy or Quinn more correct?
Comment by Anonymous Thursday, Nov 17, 11 @ 3:06 pm
===Were you following jobs or people? ===
It’s complicated.
Comment by Rich Miller Thursday, Nov 17, 11 @ 3:28 pm
I would agree that Duffy (& Lefty) are “more right” on this one. People will move to where the jobs are, and take their Congressional representation with them. I would prefer if Quinn were right, however.
Comment by Das Man Thursday, Nov 17, 11 @ 3:46 pm
Messrs. Duffy and Quinn are equally correct, I think. Business people start businesses where they think they can make money. They move to where they believe the best location is to do so, if they don’t already live there. Non-business people also want to make money and will move to where they believe the best location is to do so, if they don’t already live there. I personally believe that the differences between those two sets of people are the levels ambition AND tolerance for financial risk. If Mr. Duffy believes he (disguised as CME) can make money outside of Chicago and is willing to take the financial risk of moving, then he will do so. If his employees believe they can make money following Mr. Duffy, they will do so.
If Mr. Quinn (disguised as Illinois) believes there are enough non-business people with the necessary skills in Chicago, or the rest of the state, to attract business people, then business people will move here.
But moving ain’t easy for either set of people, because money per se is not the sole motivation to move.
As far as the tax breaks for CME, my gut says let any bill that offers such a break head for the “Hospice Committee” (ack. Emil Jones, Jr.). Let Mr. Duffy make the decision, not Illinois.
Comment by Nick Name Thursday, Nov 17, 11 @ 4:06 pm
They are both wrong. Most businesses don’t “locate” anywhere. They start up at a specific location and most stay either in that location or at least in the region.
Only a relative handful of businesses have the option to move.
What Quinn doesn’t get and never will is that this isn’t about keeping an Illinois business from moving to another state, this is about creating an environment that allows an Illinois business to make more profit than their competitors in Texas, Indiana or China.
The real threat isn’t that John Deere (for example) is going to leave Illinois. It is that if John Deere’s cost of production is consistently higher than Kubota’s then John Deere will shrink and Kubota will grow.
Quinn has never been in business or even had any close association with the private sector. He thinks making a profit is evil. But, the fact is, Illinois under Blagojevich-Quinn has consistently made it more difficult for Illinois companies to turn a profit.
The danger is not that those companies are all going to pick up and leave the state (most don’t have that option). The danger is that most companies have competitors and if costs are less for those competitors, they will take profits away from the Illinois companies, and ultimately drive them out of business. The marketplace is all about beating your competitors and whether we are talking about CME, Caterpilar, Sears, Deere, or Joe’s Soup and Sandwich Shop, if a business is handicapped by its environment, it can’t survive.
Comment by Fair and Balanced Thursday, Nov 17, 11 @ 4:53 pm
I’m not a Quinn fan in the least, but his position is closer to reality, I believe. Richard Florida has written a lot on this topic. He argues that talent, technology, and tolerance are the keys to attracting the creative class of today. The places that prosper in the future are going to be those places that can attract those people. A physical job site is going to become less and less important in the years ahead.
Comment by Sarge Thursday, Nov 17, 11 @ 5:17 pm
Hearing that a security guard had moved to Florida because there were more employment opportunities there and lower taxes convinces me Duffy is more correct.
Comment by Cal Skinner Thursday, Nov 17, 11 @ 9:01 pm
Rich
Your 1:57 post on median income was interesting. I wonder if there is any data on the correlation between hours worked and household median income.
I wonder because I chased work to Texas in the 80s. Wages were lower but the locals made up for some of it by working more hours.
Not real good for family life.
Comment by Bemused Thursday, Nov 17, 11 @ 10:04 pm