... In a recent study, BMO Capital Markets examined why Illinois is being outperformed by neighboring states. The bank's economists predicted that the Illinois economy will continue to recover over the next two years, but the unemployment rate here will continue to lag behind Wisconsin and Indiana by a striking 2 percentage points.
Illinois has suffered a more severe real estate bust than its Midwest rivals, BMO found. In addition, the Illinois labor force is weighed down by long-term unemployed workers who lack the skills that employers are seeking.
Other problems BMO identified are self-inflicted: The state's fiscal woes and unfunded pension liabilities have hurt the business climate. Chicago, the state's most important economic engine, is fighting image problems related to violent crime and its own pension problems. "It's fair to say, Illinois has lagged its Great Lakes peers on many metrics," Michael Gregory, head of U.S. economics at BMO Capital Markets, told the Tribune.
These issues make it hard for Illinois to lure employers and good-paying jobs.
Keep that in mind as you hear political leaders talk about raising taxes and minimum wage rates — and as you hear about hiring gains in other cities and states. Full employment produces more tax revenue and raises wages. That's the missing key to Illinois' survival. Read the entire Chicago Tribune opinion piece.