AFL-CIO legislative director points to untraceable data

More people are leaving Illinois than any other state in the country.

Recently released data from the U.S. Census Bureau shows Illinois experienced the biggest mid-year population loss of any state between 2015 and 2016. In the past year, 37,508 people left Illinois, making it one of seven states that saw a population drop.

Does that mean businesses are leaving, too? According to the Illinois AFL-CIO’s legislative director Jason Keller, businesses are actually sticking around.

Keller countered a claim often made by business groups that businesses and jobs are leaving Illinois and perpetuating the overall population loss. Keller said:

"I would like to challenge something one of the members here spoke to, that businesses are leaving Illinois. I think, statistically, that can be proven to be false through the Bureau of Labor Statistics. No net businesses have left Illinois."

We investigated whether this Bureau of Labor Statistics data existed and could support Keller’s claim.
 

The context

The cost of workers' compensation insurance for businesses in Illinois has been one of the lightning rod issues in Illinois politics since Gov. Bruce Rauner took office two years ago.

Rauner, business groups, and Republicans in the General Assembly say Illinois' system is slanted heavily against businesses and has contributed to an exodus of businesses to neighboring states with lower workers' compensation insurance rates.

During a debate on a workers' compensation reform bill, Rep. Dwight Kay, R-Glen Carbon, cited Illinois' No. 8 ranking in a study of state's compensation premium index rates from the Oregon Department of Consumer Business Services.

Kay linked it to recent population loss figures and suggested the state might continue to see people, and eventually businesses, move out of state.

"How many employees are going to be left because employers leave?" Kay asked one witness.

When it was Keller’s turn to speak, he tried to dismantle Kay’s assertion that businesses are leaving Illinois, citing Bureau of Labor Statistics data and saying there was no net loss of Illinois businesses.

Digging into BLS data

We asked Keller where he obtained this BLS business data. We also asked him to clarify the time frame he was referring to. At the time of the hearing, he said no net businesses left Illinois, but he did not say when.

He responded that it’s on the BLS website and instructed us to "run the reports."

When we couldn't find BLS data on business departures, we contacted the bureau's economist, Drake Gibson. Gibson said BLS doesn't track interstate relocations of businesses.

"We track things like business deployment dynamics, net losses and jobs, closures and openings. But we don’t show businesses leaving from one state to another," Gibson said.

Gibson suggested we contact the Illinois Department of Employment Security. We contacted IDES along with several other public and private organizations. None of them track when businesses leave the state.

Is this data even available?

Keller’s claim raises another question: Does anyone track the movement of Illinois businesses when they cross state lines?  

Darren Lubotsky, associate professor with an expertise in the American labor market at the Institute of Government & Public Affairs at the University of Illinois Urbana Champaign, said the data Keller referred to is loosely available, but no organization actually cobbles it together into a comprehensive report.

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For example, Lubotsky said if someone was interested enough they could use U.S. Census Bureau data to find this information. Or, if they had the means, someone could track Social Security or tax identification numbers to see where businesses were located over the course of time.

Lubotsky said that information isn’t neatly packaged. An interested party would have to check each business individually by year.

Lubotsky said he’s always skeptical when people make claims similar to the one Keller made.

"People like to use the latest population estimates kind of like a score," Lubotsky said. "Using population numbers or businesses figures are the types of things people cherry pick to make their point. I’ve never seen any serious analysis of these sort of things."

Even if Illinois was losing a net number of businesses, he said it’s more important to view Illinois’ economic landscape as a whole.

"We always hear about manufacturing jobs leaving the state. Maybe that’s the case, but maybe they’re being replaced by IT firms," Lubotsky said. "The net number of businesses might be lower, but the businesses might be higher in productivity."

Lubotsky makes a point. While no known organizations track when a business moves across state lines, BLS does track the net number of businesses in each state. According to employment and wages data, Illinois businesses were growing for nearly a decade before declining in 2015. These figures, however, indicate only the total number of businesses year to year. They offer no insight on business departures to other states.

Our ruling 

During a House Labor & Commerce Committee meeting, the Illinois AFL-CIO’s legislative director Jason Keller said, "I would like to challenge something one of the members here spoke to, that businesses are leaving Illinois. I think, statistically, that can be proven to be false through the Bureau of Labor Statistics. No net businesses have left Illinois."

We reached out to the Bureau of Labor Statistics, where an economist told us BLS does not track when businesses move in and out of state. We contacted several other private and public organizations we thought might track this data. What Keller said would be at BLS was neither there nor anywhere else we checked.

Someone wishing to track and compile business moves would need individual business records or tax identification numbers to do so, Lubotsky said.

Based on the lack of evidence and the impracticality of compiling the numbers Keller said could be found at the Bureau of Labor Statistics, we rate his claim False.

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"Businesses are leaving Illinois. I think, statistically, that can be proven to be false through the Bureau of Labor Statistics. No net businesses left Illinois."

Jason Keller

AFL-CIO legislative director

Illinois House committee hearing on workers' compensation

Monday, November 28, 2016

-11/-28/2016

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