Newly Disclosed Data on State-Subsidized Development Deals
Shows Need for Higher Wage Standards and Healthcare Disclosure

February 6, 2006 -- Good Jobs First today released an analysis of recently disclosed data on Illinois economic development deals. It reveals that state agencies have frequently subsidized low-wage jobs that would not support a bare-bones family budget. The report also notes that the disclosure system-- making Illinois the fourth state to disclose such data on the web--fails to report on healthcare, suggesting the system can be improved so that taxpayers can better judge the quality of jobs they are subsidizing.

Good Jobs First finds that about 60 percent of jobs pledged for creation or retention are slated to pay less than is needed for family self-sufficiency in urban areas outside the Chicago metropolitan region ($38,000) and rural areas ($34,000). Based on research by Wider Opportunities for Women, these self-sufficiency standards represent a "no frills" minimum needed to live without public assistance.

The report also found more than a third of the jobs (35 percent) were to pay below $27,040 annually, only twice the state minimum wage. Some (3.6 percent) were approved even at less than $20,000 yearly. By comparison, the federal poverty line for a family of four in 2004 was $19,307.

The analysis covers 25,278 jobs at 90 companies that received one or more economic development subsidies from Illinois during 2004. The data, which is on the web in raw form, was required by the Corporate Accountability in Tax Expenditures Act of 2003. Each company reported its progress on job creation or retention to the Illinois Department of Commerce and Economic Opportunity in December 2004. DCEO collated and disclosed the data on the website in July of 2005. The reports are not currently required to include health insurance data.

"Despite some minor technical flaws," Good Jobs First Executive Director Greg LeRoy noted, "Illinois should be commended for creating one of the most comprehensive and accessible subsidy disclosure systems in the nation. However, given the nation's healthcare crisis, taxpayers want to know if subsidized employers are providing healthcare benefits. Since low-wage jobs often create hidden taxpayer costs in the form of social safety-net programs such as Medicaid, we suggest the disclosure system be modified to include healthcare coverage."

Good Jobs First is a non-profit, non-partisan resource center promoting corporate and government accountability in economic development. Its Illinois project is a partnership with the Center for Tax and Budget Accountability.

The full report, Subsidizing Low-Wage Jobs: An Analysis of the First Economic Development Deals Disclosed Under Illinois' New Accountability Law, can be accessed at http://www.goodjobsfirst.org/pdf/DCEO_subsidy_database_report.pdf.