In a WirePoints special report on demographics, Ted Dabrowski and John Klingner explore Illinois’ Demographic Collapse.
Since the turn of the century, Illinois has been in the midst of a perfect demographic storm. Residents are leaving the state in record numbers. The number of Americans moving into Illinois has hit new lows. Net foreign immigration has fallen by half. And the number of births has dropped by more than 20 percent.
These demographic forces have all combined into a single troubling fact: Illinois is shrinking. The state has lost population five years in a row. In 2018 alone, the state lost 45,000 people, the second-biggest population drop in the country.
According to U.S. Census American Community Survey data, more Illinoisans are leaving the state at the same time that fewer Americans from other states are coming in. (The American Community Survey’s [ACS] State-to-State Migration data differs from the full demographic data provided by the Census Bureau’s Population Division because they are based on different surveys. The ACS data says Illinois’ net out-migration equaled 144,000 residents in 2018 while the demographic data set says 114,000 net residents left. Wirepoints relies primarily on the demographic data’s out-migration because it also measures states’ total annual population change while the ACS state-to-state survey data does not.) The percentage of residents leaving Illinois jumped 28 percent between 2001 and 2018, to 340,000 from 266,000. At the same time, the number of people moving into the state shrank a total of 7 percent, to 195,000 from 210,000. Not only is Illinois driving more residents away, also it’s attracting fewer residents than it once was.
Illinois Shrinks
For 11 straight years, the change in Illinois population has worsened. For the last five years population growth has been negative and accelerating.
Illinois Lost 157,000 People in Five Years
This is not a Midwest or rust belt trend. Iowa, Kentucky, Wisconsin, Michigan, Missouri, and Indiana all gained population.
WirePoints Conclusion
Illinois’ problems with out-migration are deeper than the census numbers suggest. Illinois isn’t just losing its people, it’s losing its tax base as well. But that’s an issue for another report.
Illinois politicians are faced with an uncomfortable reality. The state is no longer the beacon it once was. It’s been tarnished by decades-long policies of mal-governance, increasing tax burdens and reform avoidance.
Without spending and structural reforms that make the state more competitive, Illinois will be trapped in a downward spiral. One where growing governmentdebts will fall on a continuously shrinking population.
Downward Spiral
Illinois is in a downward spiral that’s worsening. Illinois governor J. B. Pritzker’s only solution is to raise taxes.
Illinois News Network reports “A Southern Illinois University at Carbondale poll from 2015 showed that half of the Illinois residents polled would leave the state if they could. The No. 1 reason: Taxes.”
Is that believable? Sure. If the reason was weather or sunshine, Michigan, Indiana, and Wisconsin would not be gaining population.
Illinois just passed a massive corporate tax hike. Governor Pritzker now seeks a constitutional amendment for a “progressive” tax hike in the name of “fairness”.
Rest assured it will be a middle class tax hike followed by another, then another.
There is no stopping the downward spiral with Pritzker and House Speaker Michael Madigan running the show. Corruption in Illinois is second to none.
We expect to get out of Illinois in about 12-15 months. Our plans have been in place for a few years.
Get the hell out as soon as you can. Illinois’ downward spiral has no end in sight.
Mike “Mish” Shedlock
Glad to hear you’re leaving the giant tax suckhole.
I’ve known so many people in Chicago and Illinois, and I ask them… why? Why haven’t you left?
To be sure, I can’t really be talking. I live in New York and work in Connecticut. I’m definitely taxed more than y’all. I’m going to have to think -real- hard about continuing to work in CT, because I get taxed far worse by them than NY has ever done to me.
Mr. Pritzker, build that wall!
He could move a little north. A lot of people live in southern Wisconsin. Taxes and fuel are cheaper plus you are only a 40 minute train ride from downtown chicago if thats your thing.
we always wondered why you stayed so long. 12 months might be too late.
(retroactive taxes)
I noted a story recently that New York is aggressively auditing people that leave the state. Try leaving the state, and taking your income with you, New York is going to try to take one last bite. It would not be surprising if Illinois does the same.
California has been doing that for years. I litigated a case where the auditor stated during her deposition that in her 22 years as a residency auditor she never once found a taxpayer had actually left California. She didn’t think anything was odd about that fact either. It’s like the song Hotel California: you can check out, but you can never leave.
Illinois has a relatively low income tax rate (in comparison to NY and CA) so challenging residency won’t be as lucrative for the state unless they do get that progressive tax passed. Then it will be open season on people leaving Illinois.
There is a reason why the socialists built a wall in Berlin to keep people from LEAVING
East Germany was not socialist, it was communist (the last step down after socialism). I cannot think of any communist countries that have not used extreme measures to keep residents from fleeing.
Touche!
Won’t Boeing save them?
Didn’t the same kakistocracy in charge endlessly lecture us about the virtues of ZPG – Zero Population Growth – when we were young? Oops – soooo yesterday.
Looks like Carl_R nailed it. Leavers leaving $60k avg family incomes? In-migrants probably milking the welfare cliff? Do those lines cross by 2020? No need for 282 years.
What’s really amusing (or perhaps sad, depending on whether you give a toot about this dump at all anymore), is that the same dimbulbs who are lauding zero population growth, are generally the exact same ones who can’t get enough of running around, attempting to mock their marginally less illiterate peers, for not “believing in” “evolution..”
Florida is full. But I here Kansas has some pretty low taxes and plenty of land.
Yes Kansas and Oklahoma have definite economic advantages. They also have tornadoes.
The risk of tornadoes is greatly exaggerated. How many billions of dollars worth of damage have they caused in the last 50 years? Compare that to damage caused by hurricanes or flooding.
Advice: Don’t entice people to come here. We have enough now. Thx.
Losing 45,000 people a year isn’t enough to get the state government excited, so the obvious question is how many can they lose before the panic does set in? Springfield has 115,000 people, so would losing one Springfield per year in population be the alarm threshold?
If politicians insist on making up for fewer tax payers by squeezing the remaining ones ever harder, that trickle will eventually turn into a stampede.
Sad thing is, any such thing will lead the usual idiot pack to fall for yet another, as always imaginary, Federal level “tanks in the streets” hobgoblin: This time to “save Illinois” from “collapse.” “Pensioners are starving,” “for the children” blah, blah, blah….
Broader migration out of the midwest and northeast has been an issue for awhile. As the population ages they dislike cold winters and the life that comes with it. I’ve lived in all climates in the US and there is beyond economics that people are fleeing colder climates. The colder climates have to have something better than south or west. Higher taxes will only cause people to flee faster.
Personal Tax inversions will become all the rage 🙂
With a population of nearly 13 milllion, it would take 282 years for Illinois to be empty at the current rate, so a loss of 45,000 people a year is not critical. Yet, a better question is “what is happening to the tax base”. Do the people coming in have as high an income as those leaving? Or is the tax base falling much more rapidly than the actual population? I suspect the latter.
Also relevant is how soon the population loss starts affecting property values. Under normal circumstances the supply of apartments, the supply of homes, and the supply of commercial property all rise slightly every year, and the demand for them rises well, and that keeps prices stable. Remember, though, that price changes happen at the margin. If there are 1,000,000 homes in the state, and in a given year, 100,000 of those change hands, it is that 100,000 homes that set the value for the other 900,000. When you have declining population, the supply of apartments, houses, and commercial property will not fall .They may not build more, but existing homes will not be demolished in sufficient quantity to keep things in balance. As a result, you can expect to see fewer marginal buyers and more marginal sellers. The result should be a collapse in the prices of real estate. If the losses are higher income families, and the incoming people are lower income people, apartment prices should be stable, but higher priced homes may take longer and longer to sell, and the sellers may not realize nearly what they had hoped for. [Mish – if you are planning to leave in 15 months, consider putting your home on the market now. It may take that long to sell, and if you see it before you are ready to leave, you can always rent somewhere for the remaining time.]
As for Illinois raising corporate taxes, it is important to remember that corporations are fictions. Ultimately taxes are paid out of money that would otherwise have been used for consumption, and corporations aren’t consumers. Corporations, rather, act as tax collectors, making the taxes less obvious to consumers. Thus, if you buy a widget for $5, and $1 of that goes to pay taxes that the manufacturer paid, and $.50 goes to pay taxes that the distributor and retailer paid, the consumer doesn’t realize that he just paid $1.50 in tax, but he did. Now, the advantage of a state raising corporate taxes instead of individual taxes is that the corporations may well collect some of that tax from residents in other states. The disadvantage is that corporations that do business on a regional or national level may conclude it would be cheaper to do business elsewhere, and leave the state, leaving only corporations that only do business locally, and thus only collect tax from local residents.
I guess it is possible, at least for a while, for the indirect taxation that is rent and property prices, to fall fast enough to balance out increases in more overt forms of taxation. Keeping competitiveness and living standards stable.
Problem is, Madigan wouldn’t be Madigan if he didn’t go for it all. Any sign of sustainability, will be interpreted as more blood available for the squeezing.
2banana’s Law:
Democrat rule + public unions + free sh*t army = misery, ruin and bankruptcy
Here is hoping to those fleeing Illinois do NOT bring their progressive and liberal voting patterns with them and wreck the red states they are escaping to.
Colorado is an example of this.
Illinois has had plenty of Republican governance and there is no such thing as a “Democrat” party in the USA. There is a Democratic Party. Also, nobody told elected officials to cave to unions and promise them the moon or intentionally underfund pension plans.
Yes, I live here… the problem is Chicago/Cook County area. If you separate it from the rest of the state, you have a larger Iowa essentially. Even this report on demographics need to account for this issue of Chicago vs the rest of the state. Another issue is the same globally, that is rural areas out migration as the kids look for jobs etc. Illinois and other states are badly run, but following the same pattern of bad goverance, debt etc as the feds in DC, London, WallStreet etc… it’s the collapsing Western led dominance. The rot is everywhere and only total collapse will ‘fix’ it. The do-gooders are only fooling themselves as the OWO is outed in favor of the NWO… no, not China, who has the same problem demographically… like their ‘Eastern’ neighbors in Japan and Korea… it’s an industrialization/modernization issue at work as well… reproduction rates decrease as women obtain other options in life and men as well seek more to life than just the usual cycle of life. It’s a sign of our times.