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Some economic development food for thought

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Illinois

Back in 2009, urbanist Aaron Renn wrote about new kinds of economic development that don’t involve things that move on trucks. Pointing to New York City, he noted that there are good reasons why the deal-makers of the big banks and investment houses have to be in Manhattan. However, their back-office operations, where is done the essentially clerical work that cleans up the mess made by traders every day, don’t have to be there. That work can be outsourced to lower-cost cities that also offer workers affordable housing and better quality of life. And that’s what the finance industry has done, sending jobs to Florida, North Carolina, Delaware and the like.

Several kinds of work lend themselves to this separation of functions. One of them is the law. By “offshoring” prep work for big cases to branches in places outside the Loop, Renn argues, the big Chicago firms could tap a pool of lower-cost lawyers. “Chicago,” he wrote, “might be the only elite city in the country where you can get access to a far lower cost point just by going beyond the immediate metro area.”

Renn argues for Milwaukee and Indianapolis as bases for such operations, but might similar possibilities exist for Springfield lower on the food chain? The city has a white-collar workforce, many of whom at the moment haven’t much to do. It also offers some lifestyle advantages to young lawyers. including a quick drive home to a relatively cheap house. That would seem to make it a good place to open what amounts to legal back-office operations, linked with the state’s economic engine via genuinely high-speed public transportation and super-fast broadband. Springfield would have a bright future as, not a branch office, but a branch city.

Thoughts?

posted by Rich Miller
Thursday, Jan 19, 17 @ 12:50 pm

Comments

They will move them to Florida, Texas, Arizona and the like. Low taxes, low cost of living and cheap commercial real estate.

Comment by Doug Thursday, Jan 19, 17 @ 12:55 pm
Why go that far? Naperville already has those advantages. There is a reason it eclipsed Springfield in the last century despite the efforts mentioned in the article.

Comment by ChrisB Thursday, Jan 19, 17 @ 1:02 pm
I think that’s unfortunately chasing a rainbow. Springfield is not known for having a “white-collar workforce”. Also finding cheaper workers even lawyers is a repugnant and detestable practice. The profit would only go straight to the partners.

Wages to workers, profits to the people

Comment by Honeybear Thursday, Jan 19, 17 @ 1:04 pm
I read a HIP proposal doing this at the Federal level.

Pull all the bureaucracies not dependent on Congress or the White House and relocate them to Cleveland, St. Louis, Milwaukee, Detroit any struggling Midwest city needing an economic boost.

Putting all the health care in Cleveland with the Cleveland Clinic, for example. It would relocate 1000000s of Federal jobs into struggling cities.

Comment by VanillaMan Thursday, Jan 19, 17 @ 1:05 pm
Springfield has been home to back office operations for mortgage companies, legal research, and home to various insurance companies. It was also home to a major provider’s cell phone call center before that company moved to a lower labor cost state. So the idea has merit … but it is only a partial solution.

Anything that can be offsourced downstate can also be outsourced out of state or even offshored out of the country.

Comment by RNUG Thursday, Jan 19, 17 @ 1:06 pm
It is an easy commute between Chicago and Springfield (and the outer suburbs). It makes sense to resource support needs this way.

Comment by Fairness and Fairness Only Thursday, Jan 19, 17 @ 1:07 pm
Meh, corporate hqs are moving from their suburban campuses to the expanding Greater Loop because that’s where the whiz-kid talent wants to be.

McDonald’s and Google have relocated to areas that 15 years ago you’d have had a better chance at finding a dressed-hog for sale then you would a Caffe Mocha.

And if you’re an upcoming young lawyer, you want face time at the firm to climb the ladder.

Comment by wordslinger Thursday, Jan 19, 17 @ 1:10 pm
Good point. What is the quality of local schools, though. Many of these workers are raising kids. With the best will in the world, many smaller cities and, of course, rural areas can’t match the education options in and near large urban areas like NYC, LA, and, yes, Chicago.

Comment by Cassandra Thursday, Jan 19, 17 @ 1:11 pm
Why stop at the border? Legal prep work is eventually going to be offshored to India and China like everything else.

Comment by Angry Republican Thursday, Jan 19, 17 @ 1:15 pm
The problem arises in talent acquisitions in outlying areas. Bloomington and Rockford are already listed as some of the highest rates of compensation, for attorneys, when compared to the CPI. I could count on one hand how many of my classmates moved those areas after bar passage.

In addition 4 of the State’s 7 ABA accredited law schools are in the Chicago Metro, and 2 of the three outside produced less than 100 attorneys. Not to mention that one is close to having its accreditation pulled due to poor bar performance by graduates.

Report after report lists Millennials as wanting a “more urban” lifestyle, which includes expansive public transit. I would only consider Milwaukee a viable alternative to Chicago, but would need to retake the bar.

Comment by Younglawyer Thursday, Jan 19, 17 @ 1:23 pm
Springfield could be amazing. Home prices look low, but the property taxes are so dang high and the schools are not great. Good luck trying to match state benefits while recruiting. So long as those are out of whack with private sector, the private sector isn’t going to go to Springfield.

Comment by SPRI Thursday, Jan 19, 17 @ 1:25 pm
Not sure there is much long term economic development potential. Many of these back office jobs are being automated/digitized out of existence.

Comment by CCS312 Thursday, Jan 19, 17 @ 1:34 pm
” 4 of the State’s 7 ABA accredited law schools are in the Chicago Metro”

It’s actually 6 out of 9. Which 2 did you forget?

UC; NW; Loyola; Depaul; IIT-Kent; John Marshall

Comment by Chris Thursday, Jan 19, 17 @ 1:55 pm
Chris, sorry you are right. I think I forgot Loyola and DePaul

Comment by Younglawyer Thursday, Jan 19, 17 @ 2:03 pm
Springfield is not well positioned for this:

1. Low traffic airport means most travelers must go to St Louis or Chicago (travel a long distance) to enjoy cheap fares.
2. High real estate taxes and poor school quality (Chatam and Rochester do not match Chicago suburb schools.
3. Few ammenities (high quality grovery stores, restaurants, or natural attractions).
4. No mountains and no ocean. (see city survey citing lack of scenery).
5. Houses are cheap which is a plus except that the cheap houses have tremendous deferred maintenance and historically low appreciation. High quality housing is cheaper in the South East.
6. Springfield is surrounded by factory farming and associated pollutants, including airborne and waterborne pesticides, considered by many countries to be a carcinogen.
7. Lack of gyms and public pools (likely due to a poor history of race relations).
8. Road rage inducing traffic light system:

Comment by Black Top Hat Thursday, Jan 19, 17 @ 2:14 pm
There - fixed it for ya:

Springfield is a better place for families because:

1. Low traffic airport means we can park for free and fly to Chicago or STL for the price of O’Hare parking…or drive to STL almost as quickly as a Chicagoan can drive out to O’Hare and hope their car is still intact when they get back.
2. ChatHam and Rochester are excellent school districts, as are most of the smaller districts surrounding Springfield.
3. Plenty of amenities it you take the time to look.
4. No mountains and no ocean - just like Chicago.
5. Houses are cheap which is a plus because more young families can afford a home close to work.
6. Springfield is surrounded by farmland which produces a lot less pollution that the typical major metro area, and constantly changing scenery.
7. Lack of gyms and public pools due to more conservative public spending, resulting in lower overall tax rates and cost of living.
8. Road rage inducing traffic light system, but no traffic to speak of, therefore this is not an issue.

Comment by DGD Thursday, Jan 19, 17 @ 2:56 pm
** There is a reason it eclipsed Springfield in the last century despite the efforts mentioned in the article **

Yes there is, its called geography.

Comment by Cornfield Thursday, Jan 19, 17 @ 3:01 pm
What if IL only had one choice for a Capital, Springfield. Been commuting for 35+ years with my Legal eagles based in Springfield and business at the Sangamo club for all those years. It is what you make it and who you KNOW and how you deal!

Comment by BEAR 3 Thursday, Jan 19, 17 @ 4:49 pm