Target's decision highlights Chicago's, state's poor policy decisions
By Dan McCaleb
Guest columnist
Picketers rallied outside a Chicago Target store this week, protesting the retail giant's decision to close two stores on the city's South Side.
That's their right, but perhaps these picketers also should have rallied outside of City Hall - and the state Capitol in Springfield - to protest the types of poor policy decisions that make it difficult for businesses in Illinois to succeed.
The South Side stores will close in February despite efforts by Mayor Rahm Emanuel and other city officials to persuade Target to do otherwise. Corporate officials said the decision was "difficult" but came after years of declining financial performance at the two stores. At the same time, Target continues to expand in Chicago's more affluent downtown and North Side neighborhoods.
Many South Siders are understandably upset at losing convenient shopping options, particularly when the company is growing nearby.
It doesn't seem fair.
Politicians used the opportunity to blast greedy corporate America - specifically Target - for caring only about profits and not about poorer neighborhoods.
Yes, businesses should be good corporate citizens. They should make every effort to pick up poorer performing stores in less affluent neighborhoods with profits from successful stores elsewhere. But elected officials who are spewing political rhetoric by exclusively blaming "bad" corporate America for decisions such as this purposefully ignore the realities of the business climate they've created. Target and other businesses don't operate in a vacuum. There are financial pressures placed on these job creators other than where their stores are located.
Chicago is a notoriously high-tax, high-regulation city, just as Illinois is a notoriously high-tax, high-regulation state. While the federal minimum wage is $7.25 an hour, Chicago's is $12 an hour now and will increase to $13 an hour on July 1, 2019. Consumers pay the highest combined local and state sales taxes in Chicago at 10.25 percent. Property taxes are among the highest in the nation and continue to climb. Illinois has the highest workers' compensation costs in the Midwest, and the city and state governments have among the strictest business regulations anywhere.
Yes, the minimum wage is the same on the North Side of Chicago as it is on the South Side, just as the sales tax is. But when a company weighs all of these factors, including a store's overall performance, it has to make difficult decisions. Now imagine the struggles downstate businesses face with the same high property taxes, workers' compensation costs and regulatory burden. Imagine if Chicago's minimum wage hikes were forced on job creators in the more rural parts of Illinois, as some state lawmakers support.
The fact is, policy decisions have consequences. The city of Chicago's and the state of Illinois' policy decisions have been markedly anti-business. And they don't help companies like Target when they have to make tough decisions about store closures and jobs.
Illinois Chamber of Commerce CEO Todd Maisch, in response to this week's announcement that Amazon was passing over Chicago in favor of two East Coast cities' bids to host its new headquarters, told Illinois News Network that the state's business climate has to be fixed.
"Simply jacking up taxes and continuing to spend how we spend is not the answer," Maisch said. "It goes to the old notion that if you're in a hole, stop digging. We are continuing to dig."
Gov.-elect J.B. Pritzker takes office in January. Will he be bringing a shovel with him?
Dan McCaleb, dmccaleb@ilnews.org, is editor of Illinois News Network and the digital hub ILNews.org.