After the announcement last week that Whirlpool Corp. would close the former Maytag facility in Herrin, it seems the popular thing to do in some circles has been to demonize Whirlpool about the decision to leave Southern Illinois.
In fact, if you ran a popularity contest in Southern Illinois right now Osama bin Laden and Saddam Hussein would come in two and three behind Whirlpool in the reviled category.
Certainly, the first reaction that anybody has when being told they will soon be on the unemployment line is anger, and the second reaction is to look for somebody to blame. And since Whirlpool made the decision they're the obvious villain, right?
Well, not necessarily.
In fact, I say hold on just a minute before you pile on Whirlpool and blame them for the loss of 1,000 jobs and the $35 million annual payroll that will soon leave Southern Illinois. It seems to me that those who are taking a cheap jab at Whirlpool are looking in the wrong direction to point blame and there seems to be one angle to this story that's been missed.
Let me explain.
A story crossed my desk a few days ago that I believe shows clearly why the decision was made to close the Herrin facility. It's a decision that none of our elected officials or job experts have talked about, but then again it's an election year, so why let the truth get in the way of spin control?
The story detailed an announcement by Gov. Bob Taft that the state of Ohio had committed $29.2 million in assistance to Whirlpool as it consolidates Maytag operations in Illinois and Iowa to its Ohio facilities. According to the story the move will allow Whirlpool to expand its operations at each facility and create more than 1,100 new jobs to go along with 6,100 jobs that already exist.
In the story there was a quote by Gov. Taft that I believe explains exactly why the ranks of the unemployed in Southern Illinois will increase by 1,000 in the coming months.
"Whirlpool's decision to expand its operations and create more good jobs in Ohio is proof that our efforts to improve the state's climate for business are getting results," Taft said. "With our newly reformed tax code coupled with a variety of incentive programs, the state has leveled the playing field for Ohio businesses and created a climate in which companies can invest and succeed."
With that comment by Taft and the vision of 1,000 pink slips in your mind, let me toss out some interesting and quite contrasting facts.
In recent years the Illinois General Assembly has approved hundreds of taxes and fees on businesses creating one of the most unfriendly business climates in the nation. It's easy to point a finger at a business for pulling up stakes and moving to another state, but when the cost of doing business is cheaper and, as we all know, the bottom line is what matters, how can you blame them?
According to the 2006 Report on Illinois Poverty, Illinois has lost 222,500 manufacturing jobs since 1990. But, hidden in that statistic is that 156,000 of those jobs were lost between 1999 and 2005. Interestingly, those years correlate with the increases in taxes and fees, but I'm sure through the eyes of those calling the shots in Springfield that's just a coincidence, isn't it? Another alarming statistic shows that the loss of these jobs has caused the median household income to plummet at a rate three times the national average.
The report went on to point out that most of those 222,500 jobs have been replaced by low-paying service sector jobs. Additionally, nearly one-fourth of Illinois workers earn less than $9.28 per hour, which would put a single income family of four at the federal poverty level.
In most studies I've seen, Illinois ranks low in fairness to businesses and in legal fairness, both factors in driving businesses away. In short, a business in Illinois is at a competitive disadvantage with other neighboring states and that's exactly why businesses such as Maytag, Joy Manufacturing and others have cut and run.
Like the good folks at the former Maytag plant, I'm also angry about the loss of jobs and what impact it will have on the already dire Southern Illinois economy. But I'm not mad at Whirlpool. Instead I'm mad at our elected officials who would rather implement taxes and fees on businesses than make hard decisions about cutting "pork" and "get-re-elected" projects from a bloated $56 billion budget.
Instead of lashing out at Whirlpool, perhaps we need to take our anger with us to the voting booth next November.
JIM MUIR is a columnist for The Southern Illinoisan. He can be reached at writeon1@shawneelink.net
Posted in Muir on Tuesday, May 16, 2006 12:00 am
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