Soaring crime, a hostile business climate, and clueless leaders are driving businesses out of the Windy City.
Soaring crime, a hostile business climate, and clueless leaders are driving businesses out of the Windy City
B oeing, the world’s third-largest defense contractor and a famous maker of passenger jets, is moving its headquarters from Chicago to Arlington, Va.
The move comes as Chicago is increasingly ravaged by crime and random drive-by shootings in the middle of downtown. In recent weeks, the theater district in downtown Chicago has had to shut down plays because the area has become so unsafe at night.
Crime in Chicago is up 35 percent this year compared with the same period in 2021. Theft is up by 67 percent.
The business climate is dismal, the result of punishing tax and regulatory policies that make Illinois the third-most unfriendly state for job creation in the nation. So it’s no surprise that the state’s unemployment rate is the sixth-highest in the nation.
Democratic governor J. B. Pritzker has proposed a record $46.5 billion budget, with extra cash for everyone from state legislators to households, with the latter slated to receive direct cash benefits.
Chicago’s wealthiest resident is Ken Griffin, the founder of the $38 billion Citadel hedge fund. He says he’ll probably move his operation to Florida. The National Football League’s Bears franchise is considering pulling up stakes as well and moving to the suburbs. United Airlines did just that last December, when it moved a quarter of its workforce — 1,300 workers — out of downtown Chicago.
The reaction of Illinois political leaders to the exodus ranges from defensive to delusional. Chicago’s Mayor Lori Lightfoot insists, “We have a robust pipeline of major corporate relocations and expansions, and we expect more announcements.” But the only one that’s publicly known is a $1.7 billion Bally’s casino — not exactly what a thriving city would have as first choice for a source of jobs.
Senator Dick Durbin, who has served Illinois in Congress for 40 years, decided to blame the victim: “Boeing’s decision to leave Illinois is incredibly disappointing — every level of government in our state has worked to make Chicago and Illinois the perfect home for Boeing’s headquarters for the past 20 years.”
Whatever the city’s virtues, to call Chicago a “perfect home” for a business is out of cloud cuckoo land. The combination of unsafe streets and an increasingly hostile business-tax environment has been chasing away city businesses for years.
Virginia, by contrast, is lowering taxes and reducing regulations. In his announcement that Boeing was moving, Boeing CEO Dave Calhoun went out of his way to “especially thank Governor Glenn Youngkin for his partnership.” The Wall Street Journal reported that Youngkin had been in talks with Boeing since the day he was inaugurated in January.
In 2001, Boeing had moved its headquarters to Chicago from Seattle, fueling hopes that the Windy City would once again become a magnet for business. Chicago paid dearly for the Boeing prize, offering $60 million in property-tax abatements and other benefits. But the subsidies ended last year, and Boeing began planning its exit. There is no substitute for sound tax and regulatory policies to attract businesses on a permanent basis.
Jonathan Williams of the American Legislative Exchange Council told me that the Boeing move is “great news for Virginia — especially if all of those incoming residents are reminded why their take-home pay and standard of living will be greater in a state with lower taxes.”
As for Chicago, more-objective observers are using the news of Boeing’s departure to issue warnings about the direction of America’s third-largest city. “It could be the wake-up call that Lightfoot and City Hall need to make the Loop’s resurgence a top-line task. But that requires heeding the alarm,” the Chicago Tribune editorialized last week.
But few expect any course corrections in the short term. “Everyone and everything in life serves a purpose,” sighs Grover Norquist, the head of Americans for Tax Reform. “In Chicago’s case, one of its current purposes is to serve as a bad example warning others not to do the same things.”