When Tyson Foods Inc. announced Nov. 19 plans to close its longtime Ashland Avenue plant, nearly 500 Chicago workers found out they’ll be losing their jobs come 2016.
But the most disheartening aspect of these layoffs might not be the pink slips themselves, but that such losses have become the norm in the Windy City.
Nearly half of Chicago’s manufacturing jobs have disappeared over the last 15 years, according to data from the Illinois Department of Employment Security, or IDES. The city now sits at an all-time low for manufacturing employment.
The manufacturing sector in the larger Chicago area within Illinois’ borders has fallen on similarly hard times. Bureau of Labor Statistics data show the Chicago-Naperville-Arlington Heights metro area has fewer manufacturing jobs today than it had in the worst months of the Great Recession.
Manufacturing opportunities are a crucial component of economic mobility, especially for individuals without a college education. A lack of manufacturing jobs and inflated housing costs are likely major contributors to the city’s middle-class exodus.
Meanwhile, Chicago has seen relatively healthy gains in white-collar employment since 2009, despite a flatlining city population. Jobs in professional and business services have grown 16 percent over the last five years, according to IDES data.
It’s easy to chalk up these dramatic changes to global competition, but many of the city’s neighbors in Indiana and Michigan have avoided Chicago’s fate over the last five years, and are growing manufacturing opportunities.
Take northwestern Indiana, for instance. Chicago real-estate services provider NAI Hiffman wrote the following about the region in its first quarter industrial report for 2015:
Indiana has historically held significant economic advantages over Illinois, such as lower property taxes, utility costs, labor rates, and soft costs (workman’s compensation and unemployment insurance). Most companies new to Northwest Indiana migrate from South Cook and Will Counties, but existing Northwest Indiana firms rarely move across the state line to Illinois.
High property taxes and regulatory burdens in Chicago, Cook County and Illinois in general are poisonous for creating manufacturing jobs.
Just ask Marty Flaska, owner of Hoist Liftruck Manufacturing Inc. in southern Cook County, who will move 300 manufacturing jobs to East Chicago, Indiana, next year. The two biggest reasons he cited for moving his forklift-manufacturing business? Property taxes and outsized costs for workers’ compensation insurance.
Those Hoist workers will make an average salary of $55,000 a year, but they’ll be doing so in the Hoosier State.
Improving Chicago’s anti-worker manufacturing environment will require major changes at City Hall and in Springfield. Demolishing barriers to well-paying manufacturing jobs such as a hostile lawsuit climate for employers, high costs for workers’ compensation insurance and high property taxes should all be on the table.
The future of Chicago’s ailing middle class depends on it.
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