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Illinois Economy

Illinois Issues: Left Behind

When Maytag closed its Galesburg plant, it took $61 million from the local economy.

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Who has been hurt the most by shifts in the Illinois economy?

Chad Broughton, then a sociologist at Knox College, watched closely when Galesburg’s major employer, Maytag, shuttered its factory in 2004, taking $61 million out of the western Illinois city’s economy. He compares the impact to a circulatory system becoming anemic.

“Restaurants and hotels and small businesses — really everything that is tax base — it starts to shrink, and it is diminished. And housing values go down, and people’s equity shrinks.” Many of the middle-skill earners halfway through — or near the end of — their careers are paid perhaps 50 percent or less of what they had earned in the factory, says Broughton, now a University of Chicago professor whose observations in Galesburg fed into his 2015 book, Boom, Bust, Exodus: The Rust Belt, the Maquilas, and a Tale of Two Cities. The situation in Galesburg in some ways is a microcosm of economic trends throughout the state and the nation. 

Rubble remained at the site of the old Maytag plant in Galesburg
Credit Chad Broughton
Rubble remained at the site of the old Maytag plant in Galesburg

“That's a profound experience of dislocation … because they’re in a country that extols the American dream and upward mobility. And you’re not just seeing your income stagnate like the rest of America, or most of America at least, but you're seeing an actual decline in your income and your standard of living. And so, you can’t go to Disney World anymore; you can’t buy a new pair of shoes for your kid. And that’s a profoundly disorienting experience.’’

Enter Donald Trump and an overpowering sense of discontent among voters who saw their paychecks shrink even as the economy improved. Post-Great Recession unemployment is down, but mainly for those who are well-educated. Manufacturing shed more than 107,000 jobs in Illinois between 2007 and 2015. There’s been a bit of a manufacturing resurgence, but the jobs now are predominantly automated, creating less need for the assembly-line work that drove the economy at mid-century. As Broughton writes, plants such as Maytag shifted from Illinois and elsewhere to Mexico, largely in response to the North American Free Trade Agreement, a three-country pact signed in 1994. Anger brewed among Americans feeling they had lost their shot at that American dream. 

Campaign sign stating the silent majority stands with Trump
Credit Gage Skidmore / Flickr

“I know a lot of the narrative was about working class white men in particular who feel like they’ve been left behind — it’s true, their wages have been stagnant. But to the extent that their wages have been flat, if we were to look at African-American men at the same earnings point, or earnings level, their wages have actually been negative,’’ says Valerie Wilson, who directs the Washington, D.C.-based Economic Policy Institute’s (IPI) Program on Race, Ethnicity, and the Economy.

Looking at statistics about unemployment, poverty and wage gaps reveals that those left furthest behind are racial minorities, particularly black men. And the numbers are worse in Illinois than any other state.

For four quarters running, the African-American unemployment rate in Illinois — at 14.2 percent for the most recent figures available — has been the highest in the nation, according to the EPI. That compares to a 5.6 overall rate of unemployment in Illinois in November. And there are Illinois-specific reasons why numbers are so high, including an inequitable and underfunded school system, weak public transit systems and a shortage of second chances for criminal offenders, some experts say. 

Chart of Illinois unemployment for working-age males 2007-2015
Credit Heartland Alliance
Heartland Alliance
Some races were left out from the comparison because of being too small for comparison. Analysis of U.S. Census data.

Robert Bruno is director of the Labor Education Program at the University of Illinois at Urbana-Champaign’s School of Labor and Employment Relations. He is co-author of a study to be released in February that he says delves into what policies could ease unemployment issues for African-Americans in urban areas. Illinois, he says, “has done about the worst when it comes to creating employment opportunities for blacks.”

Marcus Butler, a 43-year-old Springfield resident, says he believes he and fellow African-Americans are likely to have experienced employment discrimination. “We don’t make as much. We come in at a starting level even with the education, or the background, they still kind of hold us to a spot where ‘Ok, you are going to make this,’” he says. “It’s covert or overt racism where it’s like how in the world can we both have a bachelor’s degree in engineering, but he’s … making this much more and I’m not?”

Marcus Butler photo
Credit Maureen Foertsch McKinney / NPR Illinois | 91.9 UIS
NPR Illinois | 91.9 UIS
Marcus Butler, 43, of Springfield says he believes all African-American men have experienced employment discrimination.

The situation is not in his imagination, says Kimberly Drew, who deals with economic security policy for the Chicago-based Heartland Alliance. “Between identically qualified white and black applicants applying for the same entry-level position, white applicants are twice as likely as black applicants to be called back or offered a job. And when white applicants with criminal records apply for jobs, they were as or more likely than black applicants with no criminal histories to be called back or offered a job.”

The hourly wage gap between whites and blacks grew from $1.74 in 1980 to $5.18 in 2014, a 197 percent increase when adjusted for inflation, according to Chicago-based Center for Tax and Budget Accountability’s analysis of U.S. Bureau of Labor Statistics.

“Discrimination clearly impacts the labor market in Illinois,” says Ralph Martire, executive director of the nonprofit think tank, which promotes economic justice. “You see that with the historic trend of African-American unemployment with the rates consistently more than double, and now approaching triple, the rates of whites.

“You can’t explain that at all with neutral labor market factors,” Martire says. “You really have to acknowledge race is playing a role and, in particular, discrimination by race. But the growth in the wage gap also has something else going on in it which is uniquely Illinois-centric and is predicated on Illinois policy. That is the way Illinois has elected to pay for public education.”

55 percent of the African-American children in Illinois live in the 5 percent of school districts that have the greatest poverty and lowest property value

Martire says, “Illinois has consistently made the policy decision now for generations to push the primary responsibility for funding K-12 education from the state down to the local level.” Illinois, he says, is 50th in the nation in the portion of education paid for by state and first in the nation in the portion that is paid for by local property tax.

That means that high-wealth school districts are able to spend significantly more per student, creating what Martire says are some of the best schools in the world. “These communities are really wonderful places for a child to receive their K-12 education, but as you start moving to communities with lesser property wealth, you see the quality of the education diminish and diminish substantially in Illinois.”

The “incredibly inequitable funding system,” he says, is “the result of two policy decisions at the state level … to put the primary obligation for funding education in local property taxes, and the reason behind that is the other policy choices at the state level in Illinois to be artificially low-tax.” The state is one of the lowest-taxing states even though it has the fifth-largest population and fifth-largest economy of any state, which means the state has less funding to support education and “has pushed that obligation down locally.”

Illinois poverty rates by race and gender for 2015
Credit Heartland Alliance
Heartland Alliance
Some races were left out from the comparison because of being too small for comparison. Analysis of U.S. Census data.

The result is that 55 percent of the African-American children in Illinois live in the 5 percent of school districts that have the greatest poverty and lowest property value, Martire says. “That’s a really big gap in education funding, which has certainly meant lower-quality education for minority students than for their white peers.” 

State Sen. Kimberly Lightford, a Maywood Democrat who is chair of the Illinois Legislative Black Caucus, calls the state of education “a missed opportunity.” Students in much of Chicago and neighboring suburbs deal with overcrowded classrooms, outdated texts and a lack of support staff such as nurses and counselors.

“They’re growing up in a system that says we devalue you,’’ she says.

Bruno’s upcoming report suggests several ways that African-American employment can be improved in Chicago and other urban areas. In addition to better funding for schools, they include boosting public sector employment, putting more resources into public transportation and relaxing zoning laws.

Meanwhile, Republican Gov. Bruce Rauner recently created a program called Advancing the Development of Minority Entrepreneurship, which is aimed at the economic climate for minority and women-owned businesses in Illinois. In its first year, the program to be overseen by the Illinois Department of Commerce is expected to serve minority communities in Chicago, Peoria and Rockford and may later be expanded to the rest of the state.

Larry Ivory, president and CEO of the Illinois Black Chamber of Commerce, says, “I’ve experienced countless times, and I’ve seen it more times than I can imagine, where firms are more than qualified, more than capable, but somehow never win the bid, despite the fact that they are even better than the firm that wins the bid. And all that is institutional racism when it comes to procurement.”

Lightford says one of the ways the state can make a difference is to support job-training programs for youth, including one funded for $6 million in Illinois’ so-called stopgap budget, which expired earlier this month. She hopes a budget settlement will produce another $6 million in jobs for 16- to 26-year-olds.

Job-training programs for low-income minorities would help those who have to work two and three jobs to get by, says Teresa Haley, who is president of the Illinois chapter of the National Association for the Advancement of Colored People.  And offenders in the so-called school-to-prison pipeline need to be given a second chance at a job once they are released, she says. 

Teresa Haley in office
Credit Maureen Foertsch McKinney / NPR Illinois | 91.9 UIS
NPR Illinois | 91.9 UIS
Teresa Haley is president of the Illinois chapter of the National Association for the Advancement of Colored People.

Butler, the Springfield resident, was homeless and hungry and using drugs and drinking in Rockford when he committed retail theft. He spent seven years in prison in the Jacksonville Correctional Center. After his release to a half-way house in Springfield, he got a job as a medical screener for a plasma center. Eventually, he trained to be a phlebotomist. Five months ago, he was dismissed after an altercation with another employee. Now, he says, he wants to obtain a waiver that will allow him to do medical-related work such as drug or alcohol counseling. Meanwhile, he serves as a youth mentor and an Americorps volunteer.

Among the lessons he imparts: “We are kind of the low men on the totem pole. So we have to do extra — we have to do a little bit more. When I go to work, I have to be there earlier, and I leave later. I have to be an example to the people that I work with. I have to be a little more stern, because I don’t want to be looked as ‘oh he’s being lenient.’ We kind of come into these situations at a disadvantage, and so we work harder just to meet the minimum standard. … We are just trying to meet the bare minimum requirement to stay there and then try to move up.’’

These are measures his white peers have the luxury to not worry about, he says. But that’s part of the economic situation for African Americans in Illinois.

Haley says, “It is terrible. It appears we continue to go backwards instead of moving forward. I felt that having our first black president that we would make more progress in terms of equal pay for equal work and so on. We have a lot of work to do.”

Illinois Issues is in-depth reporting and analysis that takes you beyond the headlines to provide a deeper understanding of our state. Illinois Issues is produced by NPR Illinois in Springfield.

Maureen Foertsch McKinney is news editor and equity and justice beat reporter for NPR Illinois, where she has been on the staff since 2014 after Illinois Issues magazine’s merger with the station. She joined the magazine’s staff in 1998 as projects editor and became managing editor in 2003. Prior to coming to the University of Illinois Springfield, she was an education reporter and copy editor at three local newspapers, including the suburban Chicago Daily Herald, She has a bachelor’s degree in journalism from Eastern Illinois University and a master’s degree in English from UIS.
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