As my colleague Greg Hinz reported, hospitality-related businesses had a good summer as visitors returned to downtown hotels. Guest counts reached 3.1 million room nights between June and August, 89% of the record bookings during the same period of 2019 before the pandemic. That’s according to Choose Chicago, the city’s tourism and conventions agency.
A rebounding hospitality sector is good news for area workers. The industry generates tens of thousands of jobs in hotels, restaurants, bars, theaters, sports and other businesses that cater to visitors. Choose Chicago says hospitality employment this summer rose to 94% of pre-COVID levels.
Even more encourage is the broader takeaway: Chicago still appeals to travelers, despite our well-publicized and undeniable problems. Don’t take my word for it, ask the readers of high-end travel bible Conde Nast Traveler, who this week voted Chicago the top US big city for the sixth year in a row. And why shouldn’t they? Chicago has unparalleled dining, architecture, theaters, museums and a host of other attractions, all set against a magnificent lakefront that few cityscapes in the world can match.
Another positive came in public finance, for decades a reliable source of bad news. Chicago Mayor Lori Lightfoot and Cook County Board President Toni Preckwinkle released 2023 budget proposals that address a primary cause of fiscal woes for the city and county: public employee pension funding shortfalls. The shortfalls stem largely from prior failures to contribute to pensions the amount of money that actuaries say is needed to cover the obligations.
But that’s starting to change. Under Lightfoot’s budget, city pensions would get actually required contributions for the first time, along with an additional $200 million that she says would save taxpayers $2 billion in long-term costs.
Over at Cook County, Preckwinkle reports that county pension funds now have 70.7% of the money they need to make future pension payments. That’s up from 56.7% in 2016, when Preckwinkle pushed through a 1% sales tax dedicated to funding pensions.
Both governments have a long way to go on pensions, and there’s plenty to criticize elsewhere in the 2023 budget proposals. Lightfoot and Preckwinkle haven’t turned into paragons of fiscal rectitude. But give credit where it’s due; both have taken meaningful steps to contain the greatest threat to city and county finances. If they keep at it, taxpayers will be the winners.
Now the bad news. In what’s starting to seem like “Groundhog Day,” another big company is pulling corporate jobs out of Chicago. Tyson Foods announced plans to consolidate all corporate activities in its Springdale, Ark., headquarters, costing Chicago 500 well-paid jobs.
Tyson’s announcement follows a series of body blows to Chicago’s standing as a headquarters town. Over two months this spring and summer, Boeing, Caterpillar and Citadel all announced plans to move their headquarters from Chicago.
Even though the Tyson decision likely has more to do with the giant poultry’s cost-cutting agenda than Chicago’s attributes as a corporate base, it reinforces a damaging narrative. Every corporate defection is now seen as confirmation that issues such as crime, taxes and a perceived hostility to business make Chicago a lousy place for a headquarters. Even Chicago’s recent wins, like the headquarters of Kellogg’s snacks business and Google’s planned move to LaSalle Street, haven’t changed perceptions.
That same narrative likely played a role in the week’s other noteworthy disappointments. Illinois was bypassed twice for high-tech manufacturing plants likely to create thousands of white- and blue-collar jobs. Micron chose upstate New York for a new $100 billion semiconductor factory that would employ 9,000. Then word came that Michigan will get an electric vehicle battery plant with more than 2,000 jobs.
These are the kinds of facilities and jobs Illinois needs to thrive in the 21st-century economy. Yet the state has lost out repeatedly as EV battery makers and others go elsewhere.
The week’s contradictory developments reflect the uncertainties of a city and state with great strengths and glaring flaws. Our challenge is to fix the flaws before they negate the strengths.