The Broadband Boost Small-Town America Needs

They are mostly towns you’ve probably never heard of, places like Sandy, Ore., Leverett, Mass., Lafayette, La., and Longmont, Colo. Yet these smaller communities, and hundreds more like them, have something even the techiest big cities such as New York, San Francisco and Seattle don’t have: widespread, fast and well-priced broadband service.

Big cities usually have the edge in the traditional drivers of economic development. They have the universities, the sports teams, the big airports, the interstate highway access, the ports. But in arguably the most forward-looking part of the economy, some smaller localities have the edge. They made it for themselves by developing their own broadband networks, typically employing the latest fiber-optic technology. “I believe over the next three to five years people are no longer going to be surprised that some small cities have much better internet access than big cities,” says Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, whose national map shows more than 500 communities with some type of publicly owned network.

Private providers like Verizon or Comcast also build broadband networks in both big cities and smaller towns. But the technologies used vary, and if fiber-optic lines are used, companies don’t always extend them into the home. For understandable reasons, private companies tend to be stingy with their services, minimizing costs and maximizing revenues. For the customer, this can mean uneven and expensive service.

Publicly owned broadband networks, on the other hand, exist for one purpose: to give the most people the best service at the lowest possible prices. They do this because they know it benefits their residents’ quality of life and incomes. Chattanooga, Tenn., one of the larger cities with a public broadband network, has been called “an internet boomtown” because of all the businesses moving into the city or springing up there.

It’s similar to how municipalities operate a street system, a water department, or a cooperatively owned telephone or power company. Local leaders know they can get booted out of office, or off the board of the co-op, if they don’t satisfy their voters. So it shouldn’t be surprising that public broadband networks tend to provide cheaper, better and more comprehensive service, as has been documented in a study, “Community-Owned Fiber Networks: Value Leaders in America,” by Harvard University’s Berkman Klein Center for Internet & Society.

While theoretically a big city could set up a municipal broadband network, it’s generally the smaller communities that have done so. “You see this in Seattle and San Francisco, where they have been talking about municipal broadband for years, and you see little progress,” Mitchell says. “In smaller towns, you can make things happen.”

Not that the smaller towns have it easy. Verizon, Comcast and other big internet providers don’t like localities encroaching on their business, and they have gone to court to stop public broadband networks from being established. They have lost these cases, but defending them costs governments time and money. More successfully, the private companies have persuaded state legislatures to pass laws restricting municipalities from setting up community networks.

I believe that the political climate is getting better. With the increasing attention given to internet access as an engine of economic development, it’s getting harder for a state legislator to argue with a straight face that it’s in the public interest to stop towns or smaller cities from providing it, particularly when the big private-sector companies have been so slow to wire them up. Most such laws were passed years ago, but today there are efforts to repeal or bypass them.

When it comes to public broadband, even seemingly unfavorable political events can have unintended consequences. Open-internet advocates, for example, have been roundly critical of the Federal Communications Commission’s party-line vote in December to end the policy of net neutrality, which required internet service providers to charge all customers equally for similar services. Ironically, however, the FCC’s action may help efforts to start public broadband networks, which would be free to continue to observe net neutrality. In late December, The Denver Post headlined an article this way: “Net neutrality vote emboldens advocates for public broadband in Colorado.” In that state, more than a hundred municipalities have voted by referendum to opt out of a state law meant to stop them from setting up their own networks.

These political fights are not new. We are repeating the 1930s, when private power companies sued unsuccessfully to prevent the establishment of the giant publicly owned Tennessee Valley Authority, and by extension to block the establishment of the city- and cooperatively-owned power companies that grew out of the authority and similar efforts. It’s no accident that today so many of the towns and cities that have public broadband networks do so through their public or cooperatively owned power companies — products of those Depression-era battles.

Yet while providing good internet service publicly has the whiff of socialism, at a local level such efforts don’t divide neatly into red-blue political categories. Plenty of publicly owned broadband networks are located in Republican-leaning states and counties. Good internet service can cut through ideological lines.

Alex Marshall – “Governing” Columnist

How Automation Could Impact the Public Workforce

Automation has already altered several industries, and it’s only a matter a time before it transforms more of them. Given that many governments continue to grapple with tight budgets and suppressed staffing levels, it’s worth considering whether they might one day rely more on automation and technology to carry out tasks performed by humans.

Recent studies have shed some light on what this might look like, particularly in the public sector.

Automation has already made some forays into government. Kirke Everson, a KPMG intelligent automation consultant, cited “chatbots” utilized in call centers as an example. He suggested that automation could soon replace personnel who perform repetitive back-office tasks, such as eligibility checks and other procedures following a defined set of rules.

“Government is ripe for automation,” Everson says. “But if it requires a large amount of judgments or human interaction, maybe you don’t start there.”

In the U.K., an estimated 861,000 public-sector jobs could be automated by 2030, according to an analysis by Deloitte and Oxford University. “Administrative and operative” roles, which account for 27 percent of the public workforce, were identified as having the highest probability of being automated. These types of jobs are already declining, and the report projects their numbers in the U.K. to fall further from 87,000 in 2015 to only 4,000 by 2030.

A separate Oxford University study examined U.S. job occupations, deeming about 47 percent of total employment in both government and the private sector to be “at risk” of computerization. Some public-sector roles considered most vulnerable included library workers, postal service clerks and transportation inspectors — all positions with highly repetitive tasks. Many of the other occupations researchers identified were especially common in transportation. These included bus drivers and subway or streetcar operators, as well as highway maintenance workers.

But does this mean large numbers of public employees will one day be out of work?

Historically, industrialization and improvements in technology haven’t caused higher long-term unemployment. It’s unknown whether this time will be any different, though, with economists offering different predictions for automation’s effects.

Neil Reichenberg, who heads the International Public Management Association for Human Resources, views it more as a shift. “It’s not so much cutting staff as it is moving people to more strategic, higher-level work,” he says.

While technology has already reshaped countless occupations across just about every segment of the economy, it hasn’t yet prompted the complete elimination of many types of jobs. Consider teachers, who employ greater use of educational software programs in classrooms. These and other types of public employee positions haven’t vanished, but they do require greater tech skills than in years past.

Although some might associate automation with armies of robots, it’s computers that are most responsible for redefining work these days. A recent Brookings Institution report assessed “digitization,” or the degree of computer skills and related knowledge typically required of various occupations. Several public-sector jobs that required few digital skills in 2002 now mandate at least mid-level proficiency of computers or other devices.

Parking enforcement workers and compliance officers, for example, might have relied entirely on paper records not long ago. Today, the Brookings data suggests digital skills for these occupations have jumped considerably over the past decade.

In some ways, automating various aspects of jobs could prove to be more difficult in the public sector than in the private sector. Unions, Reichenberg says, will likely oppose efforts expected to result in job losses. Last year, the union membership rate for government workers was more than five times that of the private sector.

Still, if automation offers governments ways to cut costs without sacrificing quality of services, they’ll likely consider it. Resources remain limited. Revenues aren’t expected to grow much, and total state and local government employment is still below levels reached a decade ago. In some jurisdictions, automated processes or technologies could enable governments to provide services that otherwise wouldn’t be available.

“It’s inevitable,” Reichenberg says. “If you look at the way we do work today, technology is going to play a major role.”

 

Mike Maciag  “Governing” Data Editor

Rethink Local Economic Development…Again

In 1990, Michael Porter, a Harvard University Business School Professor, published The Competitive Advantage of Nations, an examination of how prosperity is created and maintained in the modern global economy. This book shaped how national policy was established across the world. Despite its age, this publication is a must read for any local government looking to create wealth and grow a sustainable local economy for the future.

While this well-known work did create a major shift in economic development across the world, it has not found its way into the hands of a majority of rural communities, it seems. Rather than discuss each and every concept Porter puts forth in this publication, there are two basic concepts in particular that should “hit home” for many rural local government entities striving to increase the economic well-being of their community.

First, a move away from solely utilizing the “tactical” approach of development and instead emphasizing a “strategic” method is a sure-fire way to spur new ideas and techniques to revitalize a fading business sector. The table below illustrates the central characteristics of each development method:

TACTICAL_001

Too often rural economic development is focused solely on chasing. A never-ending quest to find and “steal” that big industry or business and bring it into town. Efforts can be made to achieve this goal, because in reality, if achieved, this endeavor can have an enormous positive impact on a local economy very quickly. Nevertheless, achieving sustainable development occurs when we think “strategically” rather than “tactically”. It takes constant collaboration among both the public and private sectors of an entire region to achieve sustainable growth, this becomes even more necessary for rural communities. The strategic method also necessitates us to focus more on how we can grow what we have, rather than just search for the next big business. Big business attraction can create fantastic newspaper headlines, but rarely does aid in sustainable development on its own.

Similarly, concept two follows this discussion through the description of three stages of business competitive advantage. The stages are as follows:

  1. Factor-Driven Stage – In this state competitive advantage is based exclusively on the endowments of labor and natural resources of the community. This stage on supports businesses providing relatively low-wage.
  2. Investment-Driven Stage – This stage can be identified when efficiency in producing standard products and services become the source of competitive advantage. The economy is focused and concentrated on manufacturing and on outsourced service exports. These economies do achieve higher wages than the first stage, but are very susceptible to financial crises’ and external, sector-specific demand shocks.
  3. Innovation-Driven Stage – This final stage can be described as an economy that has the ability to produce original and/or other innovative products and services with the most advanced technological methods. The business environment is such that multiple sectors and clusters have deep roots in the community, growing and building with and from one another. Companies also tend to compete globally rather than regionally or state-wide and develop their own unique strategies for intelligent investment, growing with and alongside technology innovation, as well as having the capacity to innovate within.

After reading and thinking for a few minutes about each one of these stages, it will become quite obvious to those individuals who understand basic economics, which stage your particular community currently sits. In rural areas of the nation and State of Illinois Stage 1 economies are quite common, Stage 2 economies may occur in one or two communities per county, and Stage 3 economies may only appear once or twice regionally. However, while this may be the case generally, it does not have to be the rule.

Any community of any size can create a “Innovation-Driven” economy. The biggest mistake that a community can make is try to 100% mimic the stages of success a neighboring community followed. While a collaboration on strategy may be appropriate, the makeup and progression of the growth will differ. One community may have a location advantage, another a labor advantage, and even yet another with a community college. The essential piece of the puzzle is finding your community’s unique advantage and continually feeding this advantage until blossoming. An additional article that may help trigger ideas related to this discussion is “The Economy of Creativity”.

For more information from the Harvard Business School, please go to their website by clicking Harvard Business School

If you are interested in putting Michael Porter’s The Competitive Advantage of Nations on your bookshelf, you can find it here:

 

What’s dragging down the Illinois Economy?

Illinois is home to a well-documented people problem. The state’s population has been shrinking for four consecutive years, and its labor force is declining as well. At the same time, Illinois’ economy is lagging the nation in terms of growth.

Analyzing the component parts of economic growth shows how these two unfortunate realities are connected. And how state and local tax hikes in Illinois are making things worse.

Illinois’ slow growth

Analyzing economic growth in Illinois requires deconstructing the state’s growth in real gross domestic product into its primary contributions: labor inputs and labor productivity. The production process transforms labor, capital and technology into output (real GDP). That means if Illinoisans work fewer hours, or more Illinoisans leave the state or retire earlier over time, labor input in the production process will grow more slowly or even shrink. Declining labor input can easily cancel out any improvement in productivity growth, leaving real GDP growth unchanged or even lower than before.

Labor productivity growth and employment growth declined in Illinois relative to other U.S. states.

Illinois' economic growth lagging the nation

These results highlight that Illinois’ low population growth (including negative population growth since 2014) and declining labor force are mostly responsible for the decline in the growth rate of civilian employment. It is also obvious that Illinois would have grown faster than the rest of the U.S. economy if the state’s workforce had grown on par with the rest of the U.S. economy.

What’s behind sluggish employment growth?

Growth accounting deconstructs the growth rate of an economy’s total output into that which is due to increases in the contributing amount of the factors used in production – capital and labor – and that which cannot be accounted for by observable changes in factor utilization.

An analysis of Illinois’ expansions suggests that the growth rate of the capital stock (the crucial ingredient that makes labor more productive) has declined much more than the decline in labor. The state has experienced a serious decline in investment, and that is causing weaker wage growth. As a result, fewer people want to live and work in Illinois, fueling a decline in the growth rate of employment.

From 2010-2015, private nondurable goods consumption and government spending in Illinois increased to 70 percent of the real economy, compared with only 67 percent during the 1992-2000 economic expansion. Although the growth in all factors declined relative to the 1992-2000 expansion, declining growth in the capital stock was the main culprit. The slowdown in the growth rate of the capital stock is consistent with a decline in investment.

Weak growth in capital stock is behind Illinois' weak expansion

The large decline in the growth rate of Total Factor Productivity is common to most U.S. states. However, a larger decline in investment expenditures is the chief culprit in explaining why Illinois is experiencing its weakest economic expansion in the post-World War II era.

Tax hikes likely reduced investment in Illinois

In 2011, then-Gov. Pat Quinn praised the decision of state lawmakers to raise the individual income tax rate by 66 percent as necessary to address the state’s “fiscal emergency.” The plan raised the individual income tax rate to 5 percent from 3 percent, and raised the corporate tax rate to 7 percent from 4.8 percent. The tax hikes placed Illinois among the top four states in the United States for highest state corporate income taxes, and among the top four in the industrialized world for the highest combined national-local corporate income taxes.

In 2017, two years after the partial sunset of the 2011 tax hikes, the Democratic majority in the Illinois General Assembly, along with a group of Republican state representatives and one Republican state senator, broke the state’s two-year budget deadlock by overriding Gov. Bruce Rauner’s veto of a hike of individual and corporate income taxes. The Illinois income tax rate for individuals went up to 4.95 percent from 3.75 percent, which, added to an increase in the corporate rate, resulted in a $5 billion hike.

Income tax revenues are expected to increase, but at what cost? Although economists are divided as to whether tax cuts always stimulate economic activity, they agree unanimously that tax hikes lead to significant reductions in income and employment. Experts also agree that tax cuts enacted in periods of low or negative economic growth boost real GDP.

Not surprisingly, the share of income attributed to capital in Illinois – investment income – declined, according to Bureau of Economic Analysis data. Lower after-tax returns to investment reduce investment flows, thus slowing the growth of the capital stock and ultimately reducing real wage growth. A real wage decline has negative implications for employment growth and real GDP growth. Even with a highly educated workforce – as Illinois enjoys in the Chicago metro area, for example – a sharp reduction in the after-tax value of employment opportunities and Illinoisans’ purchasing power will fuel Illinois’ outmigration crisis.

The economic impact of tax and spending policy is not trivial. On one hand, higher income taxes penalize labor and capital income, therefore discouraging investments in productive capital. This reduction in productive capital causes labor to become less productive, thus causing the real wage to decrease. Declining real wages have a negative effect on labor supply. On the other handa lower after-tax income raises the need to work, save and invest in order to maintain the same living standard.

The first effect lowers economic activity – economists refer to it as the substitution effect – while the second effect raises activity through the income effect. The impact of the tax hike depends on which of these effects dominates the other in magnitude. Essentially, good tax policy implies a tax change that minimizes any reduction in the size of the tax base.

As evidenced by a decline in investment and employment growth, the 2011 income tax hikes were not good tax policy. And there’s little reason to think the 2017 tax hikes won’t have the same effect as Illinoisans look ahead to 2018.

The right policy prescriptions in Illinois should aim to stimulate investment. Policies that lower the cost of doing business and lower barriers to entry into the marketplace would result in higher demand for capital, thus making investment in Illinois more attractive. Illinois will not diverge from its path of poor growth until lawmakers realize the failures of recent tax hikes, and opt for more economic growth instead.

 

Source: Illinois Policy

The Economy of Creativity

The Millennial generation has been dealt a difficult hand, especially with regard to finding work and keeping it for any duration of time. Coming of age after the last recession, the Millennials entered a job market much different than the one they were born into.  The outsourcing of jobs, continually diminishing benefits, stagnant wages and the emerging gig economy, based on short-term and temporary work, is all this generation knows.

However, it may be those same forces making it difficult to find and keep a job that create an opportunity for Millennials to utilize their generational talents and qualifications to be excellent entrepreneurs. Millennials were born into an ever-growing technology based environment and economy. They are excellent at multi-tasking and desire independence from traditional office culture and the 9-5 workday. They tend to prefer to use their inherent variety of skills in a variety of different ways.

Not only do these traits fit the aforementioned growing gig economy, but also exhibit the essential traits of strong entrepreneur. While some have termed Millennials as lacking necessary communication skills and work ethic, it can be argued that they simply do not fit “traditional” norms established by Baby Boomers and Generation X’ers, but rather create their own individualized path toward personal and professional success. The uniqueness of the Millennial generation has created an economic environment full of creativity and boundless opportunity.

Statistics also tend to fall in line with the assessment that Millennials are primed to be successful entrepreneurs. According to America’s Small Business Development Centers:

  • 62% of Millennials surveyed said they dream of starting business;
  • About 50% have specific plans to do so within the next couple of years; and
  • 61% of Millennials say that they think that their best job security will come from owning their own business.

Other entrepreneurs started their own business for different reasons. They included creating a more stable financial foundation for their family, the desire to be one’s own boss, having and developing a great idea, and the desire for work independence. However, job security has almost never been associated with entrepreneurship…until now.

Interestingly, this fits almost perfectly with the Millennial creative mind and versatile skill set. For a generation that for the most part has never really known job security, it only makes sense that they realize that the best boss they can have is themselves.

Furthermore, Millennials tend to predominantly make up a region’s or community’s creative class. Often times Millennials themselves do not even know they are a part of this creative class, and therefore need their specific talents drawn-out into the forefront. This creative class of Millennials has given the long-standing dictionary definition of creative industry new life. While this industry has been around for some time, it has in the past 5-10 years taken on more prominence in both urban and rural community settings.

This creative industry is made up of several generalized categories of work, Marketing, Architecture, Visual Arts & Crafts, Design, Film & Media, Digital Games, Music & Entertainment as well as Publishing. While some of these sub-industries are obvious money makers, many Millennials tend to produce these goods and services as a hobby alongside their part or full-time job at the local fast fast food restaurant or cubicle office job. Unfortunately these talents often go unnoticed to community business and government leaders who can help encourage and grow these talents into new business start-ups.

Undoubtedly, it takes some guidance to turn a hobby digital game developer who works at the local Wal-Mart full-time into a professional game developer, just as an example, but with proper guidance, creative Millennials can achieve goals and objectives that far outweigh the expectations of many. This is thanks to their willingness to take what many would call “unnecessary” risks, their inherent ability to adapt to new environments and learn quickly, as well as the unending Millennial endeavor for independence and self-sufficiency on their own terms.

So, without question, the community you live in has numerous individuals working within the creative class that simply need to be found and given the opportunity to express themselves in whatever they do. They can be found at local craft fairs and festivals, Wal-Mart’s electronics department, or sometimes working in their parent’s basements (only partially a joke). They simply need to be sought after, found, and allowed the space to create. In the end, like it is in all walks of life, some will make it and some won’t. The important thing to remember is that Millennial’s are risk takers. One or two failures will not stop them from trying a third time. This is the beauty of the Millennial generation that is often taken for granted. Provide these creatives with the setting to show of what they do and honestly, anything can happen.

Source: USA Today

Illinois K-12 Education Funding

The state of Illinois politics has been and appears like it will continue to be in utter disarray for the foreseeable future. As of the publication of this article, and barring a budget miracle by June 30th 2017, Illinois will have been without a budget for almost exactly 2 years. This has resulted in, as of June 10, 2017, over $14.6 billion in unpaid bills. According to Reboot Illinois, this number could rise to approximately $25 billion in FY-2019, if the current path continues. The issues surrounding the continued budget impasse are innumerable and include issues surrounding state pension system reform, higher education funding, medicaid payment backlog, and raising the minimum wage. The continued impasse, and furthermore lack of state funding, has also prompted substantial layoffs across nearly every sector of state government operation.

While the issues noted above are critically important, I specifically want to touch on Illinois K-12 education. On June 30th, 2016 a stop-gap spending bill for K-12 education was passed by the Illinois Congress and signed by Illinois Governor Bruce Rauner. This was a great win for K-12 education, but has since become big problem number 1. The money promised by the state government to school districts across the has not arrived for a majority of school districts. In sum, the issue is while they did pass a k-12 education spending bill, the State simply could not afford to do so. To illustrate this point for fiscal years 2016 and 2017, it promised to pay $1.76 billion each year, but this year has missed three of its four quarterly payments. The total owed to schools is at least $1 billion, according to the comptroller’s office.

This backlog of payments is due most notably to Chicago area schools rather than the more rural south, which rely more heavily on local property tax revenues than than their northern counterparts. However, that is not to say that rural school districts are unaffected by any stretch of the imagination. Intensifying the problem further, a recent federal court case decision obligates the State to prioritize the $2 billion currently owned to medicaid providers, likely pushing obligations such as education further back in line.

Luckily for rural school districts that depend on a combination of local property tax revenue and General State Aid, the State has continued to keep current with its General State Aid payments. However, now comes the biggest potential problem yet for local taxing bodies throughout the State, but most notably the southern half, a proposed property tax freeze.

While the specifics of a property tax freeze may include ways for municipal governments and local taxing bodies to opt out, there is not way to predict exactly what a property tax freeze bill would look like. It is however fairly easy to predict the detrimental impact it would have on school districts who rely heavily on consistent property tax revenue annually. So what exactly would this mean for public schools?

“In one word, death!” exclaims William Phillips, a professor of  Educational Leadership at the University of Illinois Springfield “No new tax money assumes that all a district’s bills are going to stand still… I can’t believe they’re thinking along those lines. It’s really horrible. I don’t know how school districts can survive with the forces aligned against them,” says Phillips.

According to Monticello Community Unit School District 25 Superintendent Vic Zimmerman, “School districts” expenses increase,” he said. “The property tax is a stable revenue source … If they take away our one stable revenue source, how do they want us to continue to function? Tighten our belts? That’s been going on because of proration over the last several years.”

Without a doubt, a property tax freeze of any sort would be detrimental and in many ways unthinkable for school districts who rely heavily on these local revenue streams. A freeze would undoubtedly lead to measures that reduce the teaching force, special education  programs, extra curricular activities, etc. I dare to suggest that in many cases, it would simply be a fight to keep the doors, which may already be a serious problem for many school districts across the State this coming Fall.

What makes the whole issue of a property tax freeze even more difficult to digest, is the simple fact that these savings in property tax, while great for landowners’ and business pocket books, does absolutely nothing in terms of providing the State with more financial stability. Simply stated, these are local funds and the State does not share in these revenues at all. It can be argues that several areas of the State economy would receive a “boost” from a freeze, but at what cost to the local service providers such as municipalities,  police and fire districts, park districts, and of course, school districts.

While impacts of the State budget impasse have been felt by millions of Illinois residents, Illinois Congress and Governor Rauner have so far avoided catastrophe through stop-gap spending bills and last minute deal making. Unfortunately for all of us residents who have so far not felt the direct impacts of the impasse, the time is coming. In sum, our State government is too politically polarized. There is no better time than today to put politics aside and  find places of compromise for the current and future well-being of the State and its residents.

The Illinois Unemployment Misconception

About one year ago, we published an article called “The Illinois Wage Misconception” briefly detailing Illinois’ appearance of a strong average wage statistic. In reality, the high average wage was a false generalization. The finding’s foundation was built on the fact that the small percentage of high-end wage earners simply averaged more wages than other regional states’ high earners did. This specific finding balanced and further hid the usually low wages of a majority of Illinois workers. This wage dichotomy, or conflict, created an “illusion” of a high average wage for all of Illinois Workers.

This article discusses another Illinois economic misconception that is easily hidden by broad statistical generalizations. This misconception, or “illusion” is the State of Illinois’ lowest unemployment rate in nearly a decade of 4.6%. On face value, this record low unemployment rate would likely equate to an increase in both employment opportunities as well as employed individuals throughout the State. However, in Illinois, this is unfortunately not the case.

What is seemingly a state economic success is actually an indication of a deeper issue. The out migration of the Illinois labor force. The path towards low unemployment has not been unemployed workers seeking out and finding new jobs, but rather giving up on finding work altogether. So, simply stated, as unemployed workers quit looking for jobs altogether they are no longer included in the unemployment statistic. Therefore, as motivated job seekers go down, so does the State’s overall average unemployment rate. So the central statistic missing from this equation is the State’s active labor force. If the active labor force goes down alongside the unemployment rate, it becomes easy to surmise that decreasing unemployment signals economic distress rather than success.

Over the last ten years, from May 2007 to May 2017, Illinois has a total of 230,000 individuals leave active labor force and completely end their search for work. Interesting, over the same time frame, neighboring Wisconsin’s labor force is up 70,000 and Indiana’s labor force is up 130,000. Although not regionally adjacent, Texas has seen a labor force increase of 2 million over the last ten years. So it seems three basic conclusions can be made from these labor force statistics, (1) Illinois’ political quagmire has created an unmotivated workforce that is likely causing them to simply give up on searching for work, (2) those individuals who are motivated to work are moving elsewhere to find employment (neighboring states such as Indiana and Wisconsin), and (3) until Governor Bruce Rauner and the Illinois Congress can solve it’s budget crisis and began to dig itself out, these trends are more likely to continue than they are to dissipate.

While problems are easily identified, solutions to those problems take a certain type of courage by politicians that is not based on political leanings, but rather on what is best for the citizens of the State, despite which side of the aisle you sit at. The financial and social burdens are only growing, and to this point, the solutions being proposed are simply not keeping up.

While local leaders and economic stakeholders cannot control or often even predict the actions taken in Springfield, they do have the ability to make a difference in their community, no matter how small it may appear. First, it is absolutely critical to maintain regular contact with community employers. Engaging in economic development retention techniques allows the community to understand the needs of  local business and industry, and help both the community and the business plan for the future.

In some cases,  local business and industry may be planning an expansion of operations that could range from an additional 1-2 employees all the way to a multi-million dollar expansion and 20-40 new employees. With this type of information in hand, local stakeholders can reach out to area community colleges and universities to engage in curriculum discussions to help fill the future needs of the communities employers. While I am simplifying these often arduous conversations down to a few sentences, making a difference can happen locally, you simply have to take the first step.

Source: Illinois Policy Institute