Illinois’ July WARN report shows nearly 1,500 mass layoffs
The collar counties were hit hardest by mass layoffs in July.
In July, Illinois companies announced 1,482 mass layoffs, with 816 coming from manufacturers. July’s report showed job losses across the state, but mass layoffs in the collar counties made up two-thirds of all mass layoffs announced by large employers in Illinois. And job cuts by manufacturing companies made up more than half of July’s mass layoffs.
Monthly mass layoff reporting is mandated by the Illinois Worker Adjustment and Retraining Notification, or WARN, Act. While WARN reports are not a perfect indicator of economic trends, they are a useful gauge for studying the month-to-month trends among large employers.
Despite the fact that Cook County has a higher population than all of its bordering counties combined, the collar counties had more mass layoffs in July. Will County had the most mass layoffs of any county in the state, with two large employers announcing a combined 363 jobs to be cut; Medtronic, a medical device manufacturer and wholesaler, announced 185 permanent mass layoffs at its Joliet facility, which will close due to company restructuring. Kane Warehousing Inc. announced 178 layoffs at its Romeoville location and listed a lost contract as the reason.
Medtronic spokesman Fernando Vivanco told the Chicago Tribune in an email, “This shift will ensure our operations are flexible and scalable in a way that is efficient and cost-effective – and continue to meet our high quality standards.”
Other manufacturers that sent out pink slips include:
- Newell Brands Inc., a consumer goods manufacturer with an office in Downers Grove, announced 134 mass layoffs.
- Pace Industries Inc., a wood kitchen cabinet and countertop manufacturer in Chicago, announced 120 mass layoffs.
- Amcor Rigid Plastics USA LLC, a plastic bottle manufacturer with a facility in Batavia, announced 110 mass layoffs.
- Standard Refrigeration LLC, a power boiler and heat exchanger manufacturer with a plant in Wood Dale, announced 102 mass layoffs.
- CORPAK Medsystems Inc., a surgical and medical instrument manufacturer in Buffalo Grove, announced 81 mass layoffs.
- PPG Industries Inc., a flat glass manufacturer in Chicago, announced 55 layoffs.
- Pacific Coast Feather Company, a curtain and linen manufacturer in Des Plaines, announced 29 layoffs due to being bought out.
Unfortunately, manufacturers were not the only ones hit. Sears announced 116 mass layoffs at one of its department stores in Chicago. This comes despite the company’s history of inking state and local tax break deals worth millions.
Though some of the collar counties’ layoffs were unrelated to state and local economic policies, such as the Westmoreland Nursing Center, which laid off 84 workers due to flooding, it is understandable why companies would want to leave Chicagoland.
The collar counties have the highest property taxes in the state and some of the highest in the nation. Will County, where a significant number of the layoffs occurred, has the sixth-highest property taxes in the state and the 34th-highest in the nation. Property taxes, while devastating to homeowners, also affect businesses that either own or rent highly taxed properties. In many cases, municipalities in the collar counties and other high-property tax areas have wooed companies through local abatement and incentive deals, which ultimately pushes the companies’ share of the property tax burden onto homeowners and other businesses that don’t have special deals.
Illinois’ July tax hike has not helped either. In addition to raising the state’s individual income tax rate to 4.95 percent from 3.75 percent, lawmakers also raised the corporate tax rate to 7 percent from 5.25 percent, making Illinois even less competitive.
Workers’ compensation costs also drive up expenses for Illinois companies, especially manufacturers, making it even harder to compete with out-of-state companies. Illinois has the highest workers’ compensation costs in the region, and manufacturers have cited this as a key reason for leaving the state. Hoist Liftruck Manufacturing LLC, one of the largest forklift manufacturers in the country, left its original Illinois facility for northwestern Indiana due to the high cost of workers’ compensation and property taxes.
Thanks to these factors and others, the Prairie State continues to have sluggish jobs growth and is still far below its 2007 peak of employed workers. With all of the costs associated with doing business in Illinois, there’s little wonder.