ConAgra move to Chicago is bittersweet for Illinoisans
Downtown appeal and state-issued tax credits mask a discouraging jobs climate statewide.
Chicago’s historic Merchandise Mart will soon be home to the world headquarters of ConAgra Foods. But downtown glamour belies a longstanding, dismal jobs climate in Illinois, which makes giving out tax credits a tempting option for the state when a business like ConAgra considers investing in the Land of Lincoln.
ConAgra announced plans Oct. 1 to lay off 1,500 workers worldwide, and to employ 700 people at the new Chicago headquarters as part of a major restructuring effort. According to Crain’s Chicago Business, about 400 of those Chicago jobs will go to employees relocated from the company’s Naperville offices, which will close, and 300 will come from the company’s current headquarters in Omaha, Nebraska.
ConAgra President and CEO Sean Connelly said in a press release that the move to Chicago will “[enhance] our ability to attract and retain top talent with a focus on brand building and innovation.”
ConAgra is also one of the few businesses likely to receive incentives from Illinois’ largest tax-credit program for the remainder of 2015. The Chicago Tribune estimated that the tax credit could be worth $1.3 million.
Earlier this year, Gov. Bruce Rauner offered Economic Development for a Growing Economy, or EDGE, tax credits to ConAgra in exchange for bringing at least 150 jobs to the state and keeping those positions for at least 15 years, spokeswoman Lyndsey Walters of the Illinois Department of Commerce and Economic Opportunity, or DCEO, told the Chicago Tribune.
Rauner has since frozen the EDGE tax credit program, which former Gov. Pat Quinn used to shift headlines from the state’s poor economic climate to positive jobs news in the run-up to last year’s gubernatorial election. That poor economic climate has persisted in Rauner’s first nine months in office, as the major reforms necessary to foster opportunities in Illinois have been stonewalled in the Illinois General Assembly.
Ultimately, the state must continue the push to end its unfair practice of doling out special favors to select companies by extending Rauner’s freeze of the EDGE program indefinitely. The EDGE program undermines a fair and competitive economy for all Illinois businesses.
While ConAgra will bring white-collar jobs to the Loop to gain access to a highly educated workforce, Illinois continues to bleed blue-collar opportunities in Chicago and statewide.
Sadly, the jobs brought to Cook County by ConAgra are almost cancelled out by a major move out of Illinois announced in August by Hoist Liftruck, a Bedford Park forklift manufacturer that plans to move nearly 300 well-paying jobs to East Chicago, Indiana, by the end of the year. Hoist CEO Marty Flaska said that workers’ compensation reform and property-tax reform – two areas where Illinois manufacturers are subject to some of the highest costs in the nation – would have kept him in Illinois.
“Forget about incentive money, when you look at the pure cost for me to do business in Illinois, the choice is clear,” Flaska said.
Reforms addressing those two issues are part of Rauner’s legislative agenda, which has been met with inaction on the part of Democratic supermajorities in the Illinois House and Senate.
Illinois businesses such as Flaska’s looking to move out of state often contact economic development officials in Indiana, such as Karen Lauerman, president and CEO of the Lake County Economic Alliance. While Indiana often extends tax credits to businesses putting down roots there, “it’s not about incentives,” Lauerman said.
When it comes to enhancing opportunities in Illinois, Laureman observed, “it’s about fixing the house that happens to have a lot of broken windows and a few doors off the hinges.”
“[Indiana] is seeing an increase in manufacturing because of the cost of doing business.”
While ConAgra’s moving operations to Chicago is no hollow victory for those lucky enough to work at the new downtown headquarters, blue-collar Illinoisans watching their job prospects dwindle under the weight of poor policies may think differently.