United States Steel Corp announced on March 25 that it would temporarily stop operations in Granite City, giving notice to 2,080 steelworkers. This comes just two months after U.S. Steel announced the permanent closure of its Granite City Works coke-making facility, which cost Granite City 176 jobs.
Located along the Mississippi River just east of St. Louis, Granite City has 30,000 residents. Total employment is just under 13,000 people, according to the U.S. Census Bureau. The loss of more than 2,000 jobs will have a devastating impact on the community, local finances and future opportunities.
U.S. Steel will maintain its operations in Michigan, Indiana, Alabama and Pennsylvania. State and local policymakers in Illinois should take action to protect the work opportunities of more than 2,000 workers in Granite City.
Hardworking, blue-collar residents of Illinois communities like Granite City have been losing out to workers in neighboring states for far too long. And policy has a lot to do with it. State legislators need to fix Illinois’ workers’ compensation system to help keep these 2,000 manufacturing jobs in Granite City. And local leaders in places like Granite City should enact local Right-to-Work ordinances to attract and retain manufactures like U.S. Steel.
Illinois’ broken workers’ compensation system leaves local manufacturers at a deficit to competitors in other states. Workers’ compensation premium averages in Illinois are the highest in the Midwest, and the costs are disproportionately higher in blue-collar industries like steel-making.
Another statewide policy that thwarts Illinois’ manufacturing potential is forced unionism. This is in contrast to neighboring Indiana and Michigan, where workers are empowered to choose whether or not to financially support a union. Former Indiana Gov. Mitch Daniels stressed the importance of worker freedom for attracting manufacturing jobs. When asked whether Right-to-Work legislation is important, Daniels said “A lot of companies that don’t really want to talk about it publicly are perfectly explicit about talking about it in private.”
The proof is in the pudding. Since enacting a statewide Right-to-Work law in 2012, Indiana has added 38,800 manufacturing jobs, while Illinois has lost 2,100. And that is before factoring in Granite City’s losses.
The same story played out in Michigan. Since enacting a Right-to-Work law in 2013, Michigan has gained 37,400 jobs, while Illinois has lost 1,000.
In fact, Michigan just recently passed Illinois for total manufacturing employment, despite the fact that Michigan suffered greater manufacturing losses during the Great Recession and has a workforce three-quarters the size of Illinois’.
With Wisconsin having enacted its own Right-to-Work law on March 9, and Kentucky countiespassing Right-to-Work ordinances, Illinois’ manufacturing sector is going to be under even greater pressure. The Land of Lincoln is being surrounded by states that are accumulating policy advantages and attracting opportunities away from Illinois.
Illinois municipalities that are tired of seeing their manufacturing base hollowed out can take action to end the exodus. Home-rule units of government in Illinois communities like Granite City can follow the lead of home-rule governments in Kentucky, and enact local ordinances to create Right-to-Work cities, towns and villages across the state. With 2,000 jobs on the line, Granite City has been saddled too long with Springfield policy errors that threaten to break the backbone of their community.
Michael Lucci is Director of Jobs and Growth for the Illinois Policy Institute.