Economic Policy Impacts: Comparing Illinois to Texas and Indiana

In the all important “Jobs Bowl”, far more important than the “Super Bowl” Illinois is losing out to Texas and Indiana.

Via email from the Illinois Policy Institute:

“The common refrain made against Texas by those who defend the status quo in Illinois is that the jobs being created in the Lone Star State are lower-paying and less-rewarding opportunities.

But not anymore. Texas is now unquestionably besting Illinois in providing for the middle class.

According to the Bureau of Labor Statistics, in 2012 the inflation-adjusted median household income for Texas surpassed that of Illinois for the first time since 1984, when the statistic first started being recorded.

That means the household making the median income in Texas is taking home a bigger paycheck than the household making the median income in Illinois.

Not only is the pay higher, but Texans also get to keep more of it. After taking the standard deduction for three household members, the median Illinois household pays $2,287 in state income taxes. The median Texas family pays no income tax, as work is not taxed in Texas.

And not only is work not taxed in Texas, but there is also a lot more work to be had. Since 1984, Texas has created nearly 5 million new employment opportunities. Illinois created less than 1 million.

This story isn’t a simple comparison; it’s also a transfer. From 1995-2010, Illinois had a net loss of nearly 33,000 households representing just less than 80,000 people to net out-migration to Texas alone. In terms of dollars, Illinois lost $1.98 billion in taxable income to Texas, or $60,500 per household lost.

Ironically, Illinois’ anti-business, anti-success policies can take partial credit for Texas’ success.”

Illinois vs. Indiana

Let’s also compare Illinois to Indiana.

“The story of Illinois’ steady out-migration problem is well known, but just where are Illinoisans moving to? Is the outflow driven entirely by retirees and beach-goers moving to Florida? Not according to the U.S. Census Bureau, which just released its 2012 American Community Survey of state-to-state migration flow data. These data use census surveys to make estimates of migration flow between the states.

The No. 1 destination for Illinois out-migrants: Indiana.

The data show that in 2012, Illinois had a net loss of residents to each of its neighboring states, and that Illinois had a greater net loss to Indiana than to any other state in the union.

Indiana doesn’t offer the warm climate of destinations such as Florida and Texas. Illinoisans cross the border because of policy failures.

Wisconsin Gov. Scott Walker and former Indiana Gov. Mitch Daniels, along with former Chicago Mayor Richard M. Daley correctly predicted that raising the corporate tax rate to the fourth-highest in the nation would drive residents and business across the border.

Workers’ compensation costs in Illinois are also the fourth-highest nationally, while Indiana has the second-lowest rates. Indiana, Wisconsin and Iowa are Right-to-Work states, and ending forced-unionism is becoming a hot issue in Missouri.

Illinois’ overall regulatory burden ranks it 42nd-best nationally, and residents pay the ninth-highest tax burden of any state.

In short, Illinois stands out from its neighbors as the state doing the least to create opportunity for its

citizens through common-sense economic reform.

The census data align with the United Van Lines moving data to show that the pace of outflow is high. On net, Illinois lost 69,198 residents to other states, with 33,099 of those net losses flowing to neighboring states. The most significant neighborhood losses were to Indiana (11,529, first overall), Missouri (8,737, third overall) and Wisconsin (7,871, fourth overall).

Neighboring states have made changes to better accommodate business growth and personal opportunities. Massive out-migration from Illinois shows that an increasing number of residents have become exhausted with business as usual in Illinois, and have cast their final vote with their feet.”

About the Author:  Mike Shedlock is the editor of the top-rated global economics blog Mish’s Global Economic Trend Analysis, offering insightful commentary every day of the week. He is also a contributing “professor” on Minyanville, a community site focused on economic and financial education.