Caterpillar layoffs a symptom of Illinois’ dire jobs climate

Caterpillar Inc., one of the dozens of companies to receive special tax breaks after Illinois’ record 2011 income tax hike, recently announced plans to lay off more than 460 employees this June at its plant in Decatur.

Ben VanMetre
Senior Budget and Tax Policy Analyst

Illinois’ February unemployment figure was a staggering 9.5 percent. That’s almost 2 full percentage points higher than the national average of 7.7 percent in February. Unfortunately, the state’s sad unemployment story is all too familiar to individuals living in Decatur.

Decatur’’s 13.7 percent unemployment rate is the largest among the state’s major metropolitan areas, followed by Rockford’’s 13.4 percent and Kankakee’’s 13.3 percent.

Making a bad situation worse, Caterpillar Inc., one of the dozens of companies to receive special tax breaks after Illinois’ record 2011 income tax hike, recently announced plans to lay off more than 460 employees this June at its plant in Decatur. According to the Associated Press:

Rachel Potts, a spokeswoman for the Peoria-based company, said Friday that Caterpillar is laying off the employees as part of an ongoing series of production cuts.

Caterpillar has said those cuts are in response to reduced global demand for mining equipment. The plant in Decatur builds products used in mining.

Cuts in some other locations have been temporary. Potts said the Decatur cuts are permanent.

Caterpillar has been concerned with Illinois’ business climate for some time now. In fact, after Illinois’ record tax hike in 2011, Caterpillar CEO Doug Oberhelman wrote Gov. Pat Quinn a letter, saying:

I want to stay here. But as the leader of this business, I have to do what’s right for Caterpillar when making decisions about where to invest … The direction that this state is headed in is not favorable to business, and I’d like to work with you to change that.

It’s a major disappointment to hear stories about how difficult it is for companies to compete and operate in Illinois. It’s even more disappointing to see how little Quinn and legislators have done to turn around this state since receiving that letter.